Harper vows to renew Brazil-Canada relations

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Stephen Harper says Canada has for too long neglected relations with Brazil -- vowing to remedy this in a speech delivered Tuesday to the country's business capital.

"Friends, too much grass grows in the cracks on the road between our two great countries. It is time for increased ambition," he told an audience in Sao Paulo, a city of 18 million people.

"That is why I am here today."

He told the business crowd of nearly 300 that Canada and Brazil should be trading a lot more goods than merely $5.9-billion per year between them.

"Although Brazil is Canada's largest trading partner in South America, our two countries still did barely six billion dollars in business last year, despite having combined GDPs of close to four trillion."

Mr. Harper's keynote address -- designed to woo decision makers in the world's seventh largest economy -- even took time out to praise Brazil's airplane industry.

Canada's Bombardier is a fierce competitor of Brazil's Embraer.

"When the world looks at Brazil, what does it see?" he said.

"It sees a new industrial power, forging ahead with information and communication technologies, justly proud of its aircraft industry and well on the way to becoming a space-faring nation with its own orbital launch capacity."

The prime minister made special effort to recognize Brazil's ascendant role as a global power. It's a member of the BRIC group – Brazil, Russia, India and China – that is expected to be among the world's dominant economies over the next 100 years. The U.S. Council on Foreign Relations last month said Brazil "is on the short list of countries that will most shape the 21st century."

"Canadians applaud as Brazil takes its rightful place on the world stage," Mr. Harper said.

In the speech he harkened back to 19th century Brazil when Canada was a big financier and supplier to the South American nation of railway cars and power.

"I wish I could say that 135 years later, nothing has changed," Mr. Harper said.

"But, dear friends, during too long a time we neglected relations between our two countries."

Lingering in the background during this visit are decade-old memories of diplomatic hostilities between Canada and Brazil over state aid to aircraft makers and a ban on Brazilian beef.

Mr. Harper sought to cement new narratives between Brazil and Canada though, emphasizing the common themes in both countries' development as well as their fortune in avoiding much of the financial crisis that has saved the United States and Europe.

"In your story, we see some of our own. The same story of progress from colonial status, to federalism and mature independence.

"The same outward urge, from our first cities to our respective vast frontiers, the Amazon and the Arctic.

"The same evolution of our economies, from resource extraction, to industrialization, to the remarkable new world of knowledge-based innovation," he said.

The prime minister tackled the history of bad blood between Bombardier and Embraer, who a decade ago had fought each other in trade courts over alleged unfair state subsidies.

He made much of the relative peace that exists now.

"We have agreed to rules governing aircraft export financing and the principle is this: we all believe in competition," he said."

"But, competition has to be between businesses, not governments," the prime minister said.

"In the case of aircraft, it has to be between Embraer and Bombardier, not Brazilian and Canadian taxpayers.

Mr. Harper pointed out that today, Air Canada is a big buyer of Embraer aircraft and Canadian companies supply parts to Embraer.

"Air Canada already uses the Embraer E-90 between Ottawa and my home town of Calgary, and Canadian companies are part Of Embraer's supply chain," he said.

"What this should show us is that when we work out those things that divide us, we initiate a virtuous circle of goodwill, cooperation and economic opportunity."

The prime minister said he's encouraged that two-way investment has growth significantly, reaching $23-billion in 2010.

"[It's been]driven by more than 400 Canadian companies in Brazil; companies such as Brookfield, Scotiabank, Research in Motion, Telesat, SNC Lavalin and Kinross," he said.

"Meanwhile, Brazil is the eighth-highest source of foreign direct investment in Canada, thanks to firms like Vale, Votorantim, Gerdau and Ambev."

"Still, when you do the math," the prime minister said, "total merchandise trade is still little more than one tenth of one per cent of our joint gross domestic product."

"For two friendly countries, I think we could be friendlier than that."

He closed with speech with a plea for Brazilians to grow closer to Canada.

"My earnest hope is that, in the days and months to come, we will make good decisions for the decades that follow; decisions that will put us, not on parallel tracks, but on a common highway to a great destiny together."