by Mike McCallister
Brazil will never agree to “free trade” agreements that will result in the annexation of the global South to the North, a prominent trade unionist and representative of the Brazilian government told Milwaukee unionists on May 1.
While workers around the world marked International Workers Day with demonstrations and other actions, a representative of the Workers Party (PT) government came to the Midwest to discuss the Brazilian experience with trade unionists.
Marcelo Cereno, described as “chief of staff of the chief of staff” to Brazilian President Luis Inácio “Lula” da Silva, spoke to students at Milwaukee Area Technical College and unionists at meetings organized by the Milwaukee County Labor Council. His visit to the U.S. was organized by the AFL-CIO International Affairs Department.
Lula, a lathe operator and trade union leader, was elected president of the most populous nation in Latin America last October in an electoral rebellion against decades of military and neoliberal rule. In his third run for the presidency, da Silva carried 61% of the vote against the incumbent’s choice, José Serra.
Cereno briefly outlined the history of the Workers Party in his talk. The party was founded in 1980, when the country was still under military rule. The nationalist regime of João Goulart was overthrown in 1964. In 1983, the CUT trade union federation was founded. Five years later, the dictatorship agreed to turn power over to an elected regime.
“The Workers Party and the fight for democracy in Brazil are intertwined,” Cereno said.
Economics and the IMF
Brazil's foreign debt currently stands at $250 billion, which amounts to 55% of the country’s Gross Domestic Product (GDP). Lula was faced with both the legacy of neoliberal rule and the potential for massive capital flight, Cereno said. To confront the economic crisis, the PT government raised interest rates to cut inflation. This measure was successful, where inflation is now at 2.8%, he said.
In response to a question, Cereno said that the interest rate hike was one way to avoid an increasing dependence on International Monetary Fund (IMF) loans. In the wake of a currency crisis some years ago, the former government borrowed $30 billion from the IMF, with the option of another $10 billion this year. The government is still considering taking the loan, but without the interest rate hike, this probably would not have been an option.
Cereno said the central priority of Lula’s administration was to end hunger in Brazil. To that end, land reform would be crucial. He said that in Brazil, land reform would go beyond just handing land over to the landless peasantry. Too often in other countries, without financial aid, the small farmers would be forced to sell the land to others to survive. “We are trying to build stronger small producers,” he said, “with a strong internal market.”
Lula is also supporting a national Value Added Tax (VAT) to replace individual state VATs. Much as in the US, the 27 states in Brazil compete for industry by offering VAT subsidies to plants that would move to their state. A national tax would help keep jobs stable, Cereno said.
Of course, it remains to be seen how any of these measures may affect the majority of Brazilian workers in the informal sector, who don’t have real jobs—public or private.
The “Free Trade Area of the Americas”
Brazil is a key player in negotiations to expand the North American Free Trade Agreement (NAFTA) throughout the Western Hemisphere. Lula’s election may throw a wrench into the process. Brazil intends to participate in the negotiations for a “Free Trade Area of the Americas” (FTAA) treaty, but Lula has said that it will not be a party to an agreement that will result in the annexation of the South by the North.
Cereno amplified this stance further, saying: “We don’t want to free the movement of goods without freeing the people.” He also said that the NAFTA side agreements, allegedly protecting workers rights and the environment, were toothless. “Labor and the environment must be (addressed) in the main treaty,” he said.
Democracy and Alliances
Cereno talked much of the coalitions and alliances the PT has built to govern effectively. The PT has 92 members of the 513-member Chamber of Deputies, Cereno said. Add in the other left parties with representation and that covers about 150 members. So Cereno said that the government has made alliances with several “center” parties so that Lula has a working majority of over 300 deputies.
“We’re not going to change everything in one day,” Cereno said, “but we are trying a new way of doing government in Brazil.”
The long-term question becomes what sort of compromises Lula will have to make to maintain that working majority. Massive pressure will be applied by the U.S. government for Brazil to sign the FTAA treaty, and that pressure will certainly be reflected within the Brazilian governing “coalition.” Once you begin compromising with the center, one discovers sooner or later that the center cannot hold.
Brazil and U.S. trade unions
The AFL-CIO International Affairs representative who introduced Cereno noted that because of its foreign debt, Brazil may be targeted by the U.S. government for Venezuela-style economic strangulation. He said that while no decisions have been made, the AFL-CIO is considering applying some economic counterweights in solidarity with Brazil. He alluded to the economic weight of union pension funds that could be brought to bear against economic attacks on Brazil.
Cereno said that one reason he was in the U.S. was to support working people in struggle. “A change in the world is not possible without a change in the United States,” he said. “We need you.”
Asked whether U.S. workers should follow the PT’s example and build their own political party, Cereno sidestepped.
“You put me in a difficult position,” he said. “I am here as a representative of the government of Brazil, and cannot interfere in internal affairs. I am also here as the guest of the AFL-CIO. But let me tell you this: Workers in the United States must learn their own way of doing politics.”
He said the fight for direct presidential elections in Brazil was critical to their success. Referring to the 2000 elections, he said that perhaps a fight to abolish the Electoral College would be a positive step.