(Bloomberg) -- Agriculture Minister Carlos Favaro said Brazil should join China’s Belt and Road Initiative to counter protectionist measures from the US and European Union, an idea that has divided President Luiz Inacio Lula da Silva’s government as it seeks to attract new investment to Latin America’s largest economy.
The idea of joining China’s flagship global trade and infrastructure program has caused debates within the leftist Lula government, with some ministers arguing it is necessary to attract massive new investments while others fear the partnership could dent existing relations with the US and EU.
But speaking at Bloomberg New Economy at B20 in Sao Paulo on Tuesday, Favaro argued that the country could join the initiative without “creating disputes with anyone.”
“We need to have a great relationship with the United States and the European Union, but also some protectionist measures must be fought with an expansion of the range of trading partners,” he said, adding that strengthened ties with China and other nations offers an “opportunity to overcome trade barriers” that have been imposed on Brazil.
Lula has increasingly found himself at the center of an intensifying global competition between the world’s two largest economies as he seeks to attract outside investment to bolster Brazil’s economy, spur infrastructure development and support his green transition plans.
Favaro has played a frontline role in Lula’s attempts to deepen ties with China, in particular: Last year, he led a delegation of agribusiness executives to China with the aim of expanding farm ties between the two nations, and Brazil has inked agreements to export more beef and other products to the Asian giant since.
The agriculture minister said later that Brazil is in talks to gain Beijing’s approval for more meat plants to export to China.
Negotiations are currently under way to obtain clearance for another 10 to 15 beef, chicken and pork facilities, Favaro said in an interview. An announcement could come as early as next month, during the Group of 20 meeting in Brazil, he said.
The US and Brazil, meanwhile, have long battled over protections for ethanol and other products, as the two nations compete for global supremacy in the exporting of farm goods like soybeans, corn and cotton.
Speaking at the same event, White House Deputy National Security Adviser Jonathan Finer acknowledged the intensifying competition with China but pushed back on the idea that the US is losing ground in its own backyard.
“This is a region that’s going to make its own decisions, its own economic decisions, its own decisions about trading partnerships, about security partnerships,” Finer said during an interview with Bloomberg Editor-in-Chief John Micklethwait. “And the United States very much respects the sovereignty of the countries in the region and their ability to make their own decisions about what’s best for their future.”
Under President Joe Biden, Finer said, the US has “reversed” a narrative that the country was “on the verge of being passed by China as an economic power, that the United States’ influence was waning in the world, that China’s influence was on the rise.”
A landmark European law meant to tackle global deforestation has more recently generated friction between Brazil and the EU, with the South American nation among the agricultural powerhouses that have criticized the plans over concerns that they will hurt farmers and exports.
The European Commission moved to postpone the law earlier this month amid pressure from commodity-producing nations and industry leaders. But Favaro maintained Brazil’s steadfast opposition to the law during the event, saying it was done “unilaterally” and in a manner that disregarded the “sovereignty of other nations.”
Brazil will “never agree” with the law, he said.
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--With assistance from Michael Heath.
(Updates with China talks on more meat plants in seventh, eighth paragraphs.)
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