Trade and Venezuela elections to dominate Lula's Chile trip

Brazil’s President Luiz Inácio Lula da Silva will be in Chile on August 5 and 6 to discuss trade, investments and regional tensions with his counterpart, Gabriel Boric.

"We want to expand the bilateral agenda to work towards a friendship without limits, that is, that goes beyond economic and commercial issues and moves toward topics such as science and technology, defense of democracy and human rights, innovation, education and health. We have a dense agenda that covers several aspects, and this is important," Brazilian ambassador to Chile, Gisela Padovan, said, according to a press release.

With annual trade worth US$12.3 billion, Brazil is Chile's third largest trading partner.

"We basically export oil, automobiles and meat, and import copper, fish and ores. So there is room to diversify. The good news was the recent conclusion of the discussion on rules of origin in the free trade agreement, which will exactly allow for an increase in exports of automobiles that are relevant to the Brazilian side," said Padovan, who is also Brazil's secretary for Latin America and the Caribbean.

Brazil is the main destination for Chilean investments abroad, receiving almost 30% of total stock, and is the main Latin American investor in Chile. Tourism and related business is also flourishing between both countries.

Together with Paraguay and Argentina, Brazil and Chile are partners in the bioceanic corridor project that will connect Brazil’s center-west and ports in northern Chile.

Construction will be completed shortly, as the countries are working on agile border and logistics services to spur exports and consolidate trade links with Pacific markets.

"It is a very important project for the flow of our exports. It's the Capricorn corridor, which is almost finished. And we are already starting to talk about customs because this will serve to transport, in the same way as other corridors, our exports of commodities from the center-west to China, with a significant economy, not to mention the development of the corridor itself. In other words, when there is a road, there is a gas station, a restaurant, so you create movement along the road itself," added Padovan.

Lula is also trying to reestablish Brazil as a regional leader amid rising tensions in the aftermath of Venezuela’s elections, in which President Nicolás Maduro declared himself the winner. But the process was widely seen as fraudulent, with other countries contesting the result, while Lula has been criticized for not taking a stronger stance against Maduro.

“The visit to Chile will involve discussion of Venezuela as a key topic, as Lula is trying to find a way to resolve the impasse in the electoral process in Venezuela. Lula, as a historical ally of Maduro, will likely avoid clearly saying that the Venezuelan election was fraudulent,” Mário Sérgio Lima, an analyst at Medley Global Advisors, told BNamericas.

“However, he must try to form a coalition, with support from other regional leaders, to promote some form of transition of the Venezuelan administration.”

Lima added that “the visit to Chile also serves Lula to show [Argentine President] Javier Milei that Brazil wants to be closer to other countries in the region in an attempt to isolate Argentina in some way.”

Milei and Lula have been opponents from the start, with the former having emerged as an ally of Brazil’s former president Jair Bolsonaro.