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Brazil's Lula proposes China trade without dollars
Brasilia (AFP) April 3, 2009 Brazilian President Luiz Inacio Lula da Silva revealed Friday before leaving the G20 summit in London that he proposed to Chinese premier Hu Jintao conducting bilateral trade through each country's local currency. "I put on the table (in the meeting with Hu on Thursday) that we begin discussing commercial trade between Brazil and China being made in Brazilian and Chinese currencies (the real and the yuan)," Lula told reporters before departing the British capital for Brasilia. Lula added that he was due to travel to Beijing on May 19 and hoped for progress then with his proposal. China-Brazil trade soared in 2008 to total 36.4 billion dollars -- a more than 50-percent increase over the previous year that resulted in China becoming the second-biggest trade partner to Brazil after the United States. Most of Brazil's 20 billion dollars' worth of sales to China were of resources such as iron ore and soy beans. China, in return, sold 16.4 billions dollars' worth of goods to Brazil -- including items such as cheap textiles and shoes, squeezing many Brazilian footwear- and apparel-makers out of their own market. In 2008 Brazil and Argentina agreed on a landmark deal to let their two countries dispense with converting transactions into dollars when they trade. Before arriving at the G20 Brazil's Economy Minister Guido Mantega indicated Brasilia would raise the issue at the summit. One of the biggest problems right with the economic crisis, Mantega said last month, was "unbalanced capital flows, with the result that all the capital is leaving emerging countries and going to advanced countries." The capital bias was pernicious, he said. "For example, the United States can't handle all the dollars flowing into it, which is making the US currency rise, damaging its exports, and emerging countries have less ability to acquire products on the international market." Share This Article With Planet Earth
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