By Patricia Maresch, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The two most powerful women in South America, Brazil’s president Dilma Rousseff and her Argentine counterpart Cristina Kirchner, reaffirmed the strategic alliance and commitment to Mercosur (Common Market of the South) during a summit in Brasília. Briefly setting aside bilateral trade differences concerning Brazilian import tariffs on Argentine cars and auto-parts, the presidents agreed upon a unified regional response against the recent global economic crisis and how the two largest South American economies can deal with the possible impact of a standstill in US debt negotiations.

Presidents Rousseff and Kirchner in Brasilia, Rio de Janeiro, Brazil, News
Presidents Rousseff and Kirchner in Brasilia, photo by Antonio Cruz/ABr.

“We need to take collective action to face the hurdles brought by an international scenario that brings large flows of liquidity and an avalanche of manufactured products that seek a location for consumption, given there’s a large stagnation of demand in developed countries,” Rousseff said.

She pointed out the strength of South America and its excellent current economic and social situation compared to what is happening in developed countries: “We are a very attractive and tempting region.”

Kirchner added: “What a difference with other parts of the world today dominated by recession, unemployment, financial and fiscal chaos and above all by political paralysis in solving the challenges they have before them.”

Rousseff and Kirchner agreed to send their finance ministers and central-bank directors to regional meetings in Lima, Peru and Buenos Aires in August to develop a regional response to the global economical performances.

To give an extra impulse to the good relations, the two presidents launched the Brazil Argentina Business Council, in which companies can meet and discuss competitiveness, scientific development and strategies for joint insertion in international markets.

Kirchner, Rousseff and former president Lula da Silva at the inauguration of the new Argentine embassy, Rio de Janeiro, Brazil, News
Kirchner, Rousseff and former president Lula da Silva at the inauguration of the new Argentine embassy, photo by Divulgação.

Rousseff and Kirchner also talked about continuing cooperation in the areas of defense, science, technology, health care, transportation and nuclear industry development. “The only field of rivalry between our countries is on the soccer field,” Kirchner said.

Kirchner also took advantage of her visit to Brasília to inaugurate a new Argentine embassy. It was here that both Kirchner as well as Rousseff took a path down memory lane as they remembered the work of their successors. “It looked like a contest to see who could give the most praise to either Néstor Kirchner or Lula,” a political commentator from O Globo wrote.

Since the democratization processes during the Eighties, a strong integration and partnership began between the two countries. In 1985 they signed the basis for the regional trade agreement Mercosur, or Mercosul as it’s called in Brazil.

During the terms of former presidents Néstor Kirchner and Lula da Silva, the relationship between Brazil and Argentina grew even stronger. Néstor Kirchner regarded Brazil as a foreign policy priority and in Lula’s opinion, Argentina was a necessary strategic partner to transform South America into a world power block, one of his foreign policy goals.

The current relationship can be considered a strong commercial and political alliance, and analysts hope the recent trade dispute between the two countries will be resolved quickly. Last May Brazil initiated an import policy which could cause delays at the border up to sixty days. While the policy did not target Argentina specifically, many speculated it was retaliation for similar restrictions imposed by Argentina earlier in the year.

Brazil and China are Argentina’s main trade partners and Argentina is one of the main markets for Brazilian manufactured goods. Total trade between the two countries amounted a record R$51 billion (US$33 billion) in 2010.

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