October 15, 2002
The notion of an interregional free trade strategy toward the US by SA and Brazil might be billed as south-south pre-emptive defence for mutual economic security. It is informed by Latin America's economic turmoil. The region's economists say the problem is a lack of unity in approaching international trade and economic matters. Thus the southern common market, Mercosur, which SA wants to lead the Southern African Customs Union (Sacu) into forging links with, has been greatly weakened by Argentina's economic meltdown.
The US, meanwhile, could be pursuing a divide-and-conquer strategy; one that in effect isolates the region's main power, a clearly ailing Brazil, while forging bilateral trade links with Chile and offering duty-free access for farm exports to Andean countries. It is during this very moment of Latin American vulnerability when Washington is gearing up its push for a Free Trade Area of the Americas.
Brazil had hoped to bargain a free trade area from a bloc-to bloc position of strength between Mercosur and the North American Free Trade Area. Now, however, much to Washington's competitive advantage, Mercosur's weakness resulting from US failure to back a bale-out of Argentina (while helping Brazil and Uruguay), has slowed down an agreement between Mercosur and the European Union (EU).
This is why Brazil's presidential frontrunner, Luiz Inacio Lula da Silva of the Worker's Party, billed the Free Trade Area of the Americas as a US "attempt at annexing Latin America". In southern Africa, meanwhile, the US has always been wary of the EU's trade agreement with SA.
Hence Washington's interest in parlaying the African Growth and Opportunity Act (AGOA) into its own free trade area with SA and Sacu. Which is all to southern Africa's good in terms of diversifying trade and developmental linkages. Also, SA would come to the table from a relatively stronger position compared with its Latin American counterparts.
The rand is still vulnerable to "emerging market" volatility but careful economic management has kept SA out of the clutches of the Bretton Woods regime. And fortunately for SA, Zimbabwe's self-induced economic meltdown takes place outside Sacu confines, thus not affecting it as Argentina's woes have negatively affected Mercosur.
Apart from the possibly negative effects of Sacu member Namibia if President Sam Nujoma is seriously bent on outdoing Comrade Bob across the Limpopo, SA seems well set to navigate an international trade environment in which it is in its strategic interest to forge a counterpoise to the EU and the US by building south-south linkages with groupings such as Mercosur.
A co-ordinated MercosurSacu approach to what appears to be an emerging south Atlantic geo-economic strategy by Washington could strengthen their own search for an eventual preferential trade agreement between their respective subregions. Global trade has nothing to do with sentiment and everything to do with each country's national security interests. In the afterglow of the "rainbow miracle", Pretoria found this out soon enough when negotiating its trade agreement with the EU.
US long-term national security interests, as defined by a fanatical neoconservative minority, is to retain US superpower primacy. This translates into oil regime change via Iraq and in overcoming what may become an unsustainable trade deficit by way of free trade expansion in the south Atlantic; a strategy that also factors in access to west African oil.
Brazil's national security is already compromised by unsustainable debt. This makes it vulnerable to markets (read white finance capitalists in the US and Europe) wishing to punish it because its electorate is threatening to confirm a certified leftist as the country's next president. However, should Lula lose the second round of the presidential election, this could, according to Radio Netherlands correspondent Ineke Holtwijk, "be disastrous, as it could make the country ungovernable". The fear reflects an inherent instability posed by Brazil's racially based socioeconomic polarisation something it has in common with SA, its prospective economic ally.
Both countries need to avoid becoming subimperial outposts of a new US imperium in the south Atlantic. For SA, this carries domestic policy implications relating to translating success in the external realm into economic security on the home front.
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