Harper aims at warmer relations on Brazil trip

Prime minister Stephen Harper has come to this burgeoning economic powerhouse in South America, determined to turn the page on sometimes shaky Canada-Brazil relations and forge a solid trading relationship for both countries.

After arriving in the capital city on Sunday evening, Harper was set for a series of high-profile public events in this country as he kicks off a week-long tour of four nations in Latin America.

On Monday, Harper meets in Brasilia with president Dilma Rousseff, who took office earlier this year. On Tuesday, in the sprawling financial centre of Sao Paulo, Harper will publicly outline his vision for stronger trade ties in a keynote address at a gathering of politicians, businessmen and academics.

In the past, while both countries have worked well together at key international forums such as the G20, a tension has existed because of industrial rivalry.

Trade relations were sometimes stormy. The countries battled in the late 1990s over whether the other was providing an unfair subsidy to its jet manufacturers, Bombardier Inc. of Canada, and Embraer of Brazil.

A decade ago, Canada infuriated Brazil when it imposed a ban on that country's beef over safety concerns.

Relations have been gradually warming since then, and the Harper government is intent on ensuring it doesn't get left on the sidelines as Brazil — which traditionally embraces trade protectionism with high tariffs and restrictive controls on investment — opens up its markets in the future.

Brazil is seen by experts as one of the world's most important growing economies. It is currently the world's seventh largest economy and is expected to move into the fifth-place slot by 2015.

"Of any major emerging economies, Brazil presents Canada with the most opportunity for export, as well as for companies that are looking at doing business in that country," said Jayson Myers, president of the Canadian Manufacturers and Exporters, in an interview.

Myers said he is encouraged by Harper's trip — the prime minister's first such journey to Brazil — and hopes for improved trade relations.

He said Brazil has extremely high tariffs and strict conditions on foreign companies that operate in the country. Still, he said, Canadian companies are increasingly looking on Brazil as a place to do business.

"What's happening with the recession and the weakening of demand in the United States is companies really are looking at opportunities outside of the United States," said Myers.

"Brazil has a very strong economy and I think Canada does not bring a lot of that political baggage that businesses from other countries do. It's a market that businesses now are beginning to find is a very lucrative opportunity for them."

Indeed, with so much of Canada's economic prosperity hinging on trade, the federal government is keen to broaden this country's global trading reach. The need for that strategy is particularly relevant as the United States — Canada's largest trading partner by far — experiences major economic setbacks that could spell trouble for future decades.

The Harper government is engaged in free trade negotiations with the European Union and India. The prospects of a formal bilateral free trade deal with Brazil are dim because the country can't strike such an agreement without the consent of three other South American countries — Argentina, Paraguay and Uruguay — that are members of a common economic bloc known as the Mercosur.

But Canada still believes trade can be increased with Brazil, which is already Canada's top trading partner in South America.

Dimitri Soudas, Harper's director of communications, said that Brazil has weathered the recent global economic crisis well.

"Its economy grew by 7.5% in 2010 and its continued economic growth will translate to an abundance of new opportunities for Canadian businesses," said Soudas.

Bilateral merchandise trade with Brazil totalled $5.9bn in 2010, an increase of 37.4% from 2005.

Canadian exports to Brazil were valued at $2.6bn and include fertilizers, mineral fuels and oils, machinery, pharmaceutical products, and paper and paperboard.

There are more than 400 Canadian companies operating in Brazil. Soudas said Harper will publicly underscore the "opportunity for partnerships" in areas ranging from trade to health and education.

He noted that with Brazil preparing to spend billions as it hosts the FIFA World Cup in 2014 and the Olympics in 2016, Canadian companies with expertise in infrastructure construction and "event management" are eager to participate.

In June, International Trade minister Ed Fast led a delegation of Canadian businesses to Brazil to set the stage for Harper's trip.

In a speech during the trip, he called for more trading partnerships and said he is taking "every opportunity to tell our Brazilian partners about key Canadian strengths like energy, mining, telecommunications, and oil and gas."

(Published by Leader Post - August 7, 2011)