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Brazil Regrets its China Affair

2005-10-14 S

A couple of years later, the romance is on the rocks because of a massive tide of cheap Chinese imports flooding Brazil. Meanwhile, Mr. da Silva is facing criticism at home for having moved too quickly to embrace China in his effort to find a counterweight to US influence.

China's booming market helped Brazil climb out of an economic hole earlier in the decade, with Brazilian exports of raw materials such as soybeans and iron ore key to the recovery. Now, the dispute with China shows that the Asian powerhouse may represent as much a headache as a help for Brazil.

"The expected investments and strategic alliance that loomed in 2004 between China and Brazil are far from becoming a reality," says Riordan Roett, a Latin America expert at Johns Hopkins University in Baltimore.

The two countries are trying to pick up the pieces after trade negotiators' recent failure in Beijing to reach a deal that would lead to a voluntary restriction of some Chinese exports to Brazil. Like the US and the European Union, Brazil was inundated with inexpensive Chinese textiles when a decades-old clothing-quota system was lifted at the beginning of this year. Both the US and EU quickly imposed trade sanctions on certain Chinese clothing imports; since then, the EU has reached an accord with China that allows for a gradual increase in Chinese imports. The US and China are still at odds over how to control textile imports, with talks expected to resume tomorrow and Thursday in Beijing.

After the talks in Beijing failed, Brazil issued a decree last week that will allow companies to ask the government for safeguards

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