Leuthard buoyed by Brazil

Doris Leuthard and Brazilian President Lula da Silva (centre) at the opening of a Nestlé factory in Brazil Keystone

Swiss Economics Minister Doris Leuthard has ended her four-day visit to Brazil aimed at improving access to the Brazilian market for Swiss products and investment.

The trip was described by the economics ministry as a first “solid step” towards the implementation of the Swiss government’s strategy for Brazil adopted in December.

During the first two days of the visit, Leuthard held a number of meetings with Brazilian employers in the state of São Paulo, the governor of the province and the Swiss business community there.

On Thursday she signed a memorandum of understanding in the capital city Brasília with the Brazilian foreign minister Celso Amorim on the creation of a joint economic commission.

The commission would strengthen economic relations between Switzerland and Brazil and serve as a platform for concrete bilateral talks regarding trade and direct investment and the possibility of an economic accord.

It would also consolidate economic, technological and scientific cooperation between the two countries and guarantee a constant exchange of trade and investment data.

“There is currently a trade surplus in favour of Switzerland,” acknowledged Amorim. “But we are not concerned with surpluses or deficits – what we want is trade between the two countries that is dynamic and always improving.”

Leuthard said Switzerland was impressed by the reforms which were underway in Brazil and by the macro-economic stability that had been achieved.

“Brazil is our principal [trade] partner in South America, but we all know we could do better,” she said.

Brazil is one of the few countries with which Switzerland has neither an investment protection agreement nor a double taxation accord.

“We want to reduce the problems met by European companies wishing to invest in Brazil,” Leuthard added.

Nestlé

On Friday Leuthard and Brazilian President Luiz Inácio Lula da Silva opened a Nestlé plant focusing on the manufacturing, packaging and distribution of products aimed at consumers in Brazil’s northeastern state of Bahia.

The initial investment of $47 million (SFr58.8 million) in the site is creating more than 2,000 jobs in the economically deprived region.

The 50 million consumers in the northeast of Brazil will have better access to Nestlé products, packaged in more affordable sizes, often distributed door-to-door or through small neighbourhood shops, and especially adapted to their nutritional needs and tastes.

“This new regional initiative makes good ethical and good business sense,” Peter Brabeck, chairman and CEO of Vevey-based Nestlé, said. “It provides both improved access to quality food for lower-income families and a significant boost to the local economy.”

President Lula da Silva said: “Nestlé’s initiative is a concrete example of how to generate jobs and income to make this country a fairer place, a place where people have the right to work, study and buy affordable products.”

Trade talks

Leuthard also broached the issue of the stalled Doha talks on world trade liberalisation, which she tried to push forward at last month’s annual meeting of the World Economic Forum in Davos.

On behalf of the G20 group of industrial and developing countries, Brazil is expected to lobby strongly for greater liberalisation of the markets for agricultural products.

Brazil is one of four emerging countries – the others are Russia, India and China – which are in a group called BRIC.

In a 2003 paper, the Goldmann Sachs investment bank argued that the BRIC economies were rapidly developing and would account for half of the world’s industrial production over the next 40 years.

The Swiss government decided to make this group a priority this year.

swissinfo with agencies

In brief

Swiss Economics Minister Doris Leuthard’s four-day trip to Brazil was aimed at improving access to the Brazilian market for Swiss products and investment.

On Thursday, she met President Luiz Inàcio Lula da Silva as well as several government ministers.

Leuthard, who was accompanied by a delegation of Swiss business leaders, also signed a memorandum of understanding on the creation of a joint economic commission.

Key facts

In the first 11 months of 2006, Switzerland exported goods valued at around SFr1.3 billion ($1.04 billion) to Brazil and imported goods worth SFr719 million.
Compared with 2005, this represents a 25% increase in the volume of bilateral trade.
The level of Swiss investment in Brazil in 2005 was SFr6.5 billion.
Swiss companies provide employment for 91,000 people in Brazil.