Harper signs business, travel pacts in Brazil

Prime Minister Stephen Harper signed several agreements with Brazil's president Monday during the first day of a six-day tour of South and Central America.
Stephen Harper is greeted by a Brazilian official in Brasilia on Sunday night, the first stop on the prime minister's six-day tour to South and Central America. (Adrian Wyl/Canadian Press)

Canada signed a series of agreements with Brazil Monday that Prime Minister Stephen Harper says will boost business ties and increase the flow of goods and people between the two countries.

Harper and Brazilian President Dilma Rousseff signed the pacts on air travel, pension benefits, international aid and other areas at the presidential palace in Brasilia.

Harper brings team

In a show of the importance the government places on Canada-Brazil relations, cabinet ministers John Baird, Rona Ambrose, Diane Ablonczy and Ed Fast are accompanying Prime Minister Stephen Harper on the two-day visit to Brasilia and the financial centre of Sao Paulo.

They are joined by northern Saskatchewan Conservative MP Randy Hoback and a cadre of Canadian business leaders.

Brazil is the first stop on Harper's six-day tour of South and Central American countries that will see him try to improve trade relations in perilous economic times.

The agreements signed Monday will enhance Canada's competitiveness and translate into other benefits for Canadian businesses and consumers, Harper said in a release announcing the agreements.

"Brazil is a major global economic player and a key priority market for Canada," said Harper. "These agreements will benefit both countries by promoting greater two-way flow of people, goods and services, enhancing our competitiveness and further strengthening our partnership in key areas of shared interest." 

Canada and Brazil already had a bilateral air transport agreement that dates back to 1990, and the one signed Monday adds more rights for airlines in both countries. There will be more flexibility for route selection, pricing, and frequency of flights, according to Harper's office.

The agreement will be good for Canadian airlines, the tourism sector and travellers, the prime minister said.

The two leaders also inked a deal on co-ordinating pension benefits. Among its measures are the easing of restrictions on social security benefits owed to Canadians who are living in Brazil, and making it easier for citizens of either country to be eligible for benefits by adding together periods of social security coverage in both countries. Canada has signed these kinds of social security agreements with dozens of other countries.

A new Brazil-Canada CEO Forum was also launched by Harper and Rousseff as a result of the bilateral visit. It's meant to be a mechanism for the private sector to be involved in boosting trade and investment between the two countries and to serve as a forum for policy discussions on commercial relations. Six CEOs from each country will be invited to participate.

Canada to share Olympic expertise with Brazil

A memorandum of understanding was also signed that will see Canada share its Olympic-hosting experience and expertise with Brazil. The Summer Games are in Rio de Janeiro in 2016 and the MOU is aimed at the two countries talking about how to host a successful event and the environmental, social and legal considerations that are part of the planning.

Harper said the MOU will mean business and investment opportunities for Canadian and Brazilian companies.

Harper and Rousseff also pledged greater dialogue on delivering aid in Latin America, and to establish the Canada-Brazil Strategic Partnership Dialogue. The new agreement will have each country's foreign affairs ministers meet annually to discuss regional and global issues.

A number of other topics were covered by the two leaders Monday including energy, agriculture and education. They agreed, for example, to try to enhance ties between universities and research institutions and increase the number of student exchanges.

They also agreed to explore ways to enhance Canada and Brazil's trade relationship, a key driver in Harper's visit to the region.

Harper's trip is taking place against a backdrop of debt crises in the  United States and Europe and  market turmoil globally. He arrived in Brasilia Sunday night and as the CBC's James Fitz-Morris reported, the trip is perfectly timed to seek a larger share for Canadian exports in that country's booming economy. 

"It's important to note that Brazil's economy is larger than Canada's by about 25 per cent and they're growing at a phenomenal rate," Fitz-Morris said of the world's seventh-largest economy. "Their economy grew at more than seven per cent last year" — double Canada's rate — "and that was a time of global economic recession."

Ties between the two countries have been strained, particularly in disputes over government subsidies for Embraer, Brazil's huge aerospace conglomerate, and Bombardier Inc., Canada's Quebec-based aircraft manufacturer.

Harper went to Brasil looking to secure new export markets, which could help stabilize Canada against the financial havoc besetting its largest trading partner, the United States.

Plenty of competition

An estimated 400 Canadian companies already operate in Brazil, Canada's 10th-largest trading partner. Exports of Canadian merchandise to Brazil totalled $2.6 billion in 2010, up 60 per cent from the year before, and imports were $3.3 billion.

Canada can expect plenty of competition for Brazil's business

Negotiating a free-trade deal with Brazil is trickier, since it needs the consent of three other South American countries — Argentina, Paraguay and Uruguay — that are members of a common economic bloc called Mercosur to enter into such an agreement. 

The Conservative government has sought bilateral free-trade deals with a number of countries, placing a special emphasis on the countries of Latin America and the Caribbean. In 2002, Canada signed a free-trade agreement with Costa Rica, where Harper will stop on Thursday.

Three years ago, Canada inked a free-trade agreement with Colombia, where Harper visits Wednesday. That deal comes into force next week.

And on Friday, Harper will travel to Honduras, where negotiations have been taking place for quite some time to reach a free-trade agreement. There, the prime minister is likely to highlight the role that Canada has played in trying to restabilize Honduras, which went through a military coup d'etat in 2009 and a lot of turmoil since as different factions fought for control. Canada was part of Honduras's truth and reconciliation settlement that helped steady the country to the point it has been readmitted to the Organization of American States.

The Prime Minister's Office proudly points out that Harper will be the first foreign leader to visit Honduras since the acknowledgment that it has re-established democracy, the CBC's Fitz-Morris reported.

Officials from Canada and Honduras have met twice since December. Talks with the so-called Central American Four, comprising Honduras, El Salvador, Guatemala and Nicaragua, have dragged on for a decade. Canada is closer to striking a deal with Honduras than with any of the other countries.

However the PMO has said it does not expect to announce a free trade deal with Honduras on this trip.   

With files from The Canadian Press