Business between Brazil and the Netherlands: past, present and future.

‘Nosso Maurício, shared values and the need to innovate. Business between Brazil and the Netherlands: past, present and future.’
Speech by the Minister of Foreign Affairs, Uri Rosenthal, at the University of São Paulo on 28 May 2012

Professor Basso, Your Excellencies, ladies and gentlemen,

I am pleased to have the honour of addressing you. And I’m delighted to be meeting with the future political, economic and moral leaders of this great country. But before we look ahead, I would like to go back in time for a moment.

In the course of history there have been many men called Maurits. But for the Dutch and Brazilians, only one of them is their Maurits. In Brazil, Dutchman Johan Maurits van Nassau-Siegen is known as nosso Maurício: our Maurits. In the 17th century he was governor of Pernambuco, where his tolerant attitude, his spirit of enterprise and his faith in science endeared him to all. Your ancestors called him the ‘humanist Prince’. He is still one of the best-known Dutchmen in Brazil.

And that makes sense, because the Brazilians and the Dutch have always cherished tolerance, trade and science. So ‘our Maurits’ is a fitting symbol of the good relations that our two countries have enjoyed in the past – and I’m sure will continue to enjoy in the future. Our shared values enable us to understand one another and trade successfully.

The era of Maurício was the era of the West India Company. It’s an era we both like to look back on. It was a time when world trade flourished as never before. Ships came and went, transporting spices, sugar and coffee from Brazil to Europe. For many years, the relationship between Brazil and Europe was based only on trade. That is to say – trade from Brazil to Europe. In those days, the journey between our continents was a long one. Indeed, it took months to make the sea voyage. As a result, our ties were largely confined to trade.

That changed in the early 20th century, when the Brazilian diplomat Ruï Barbosa arrived on Dutch soil. He came to Europe in 1907 to take part in the Hague Peace Conference. Agreements were made about international law and the first stone of the Peace Palace was laid. Barbosa’s presence at this historic event did not go unnoticed. His distinguished participation earned him the nickname ‘the Eagle of The Hague’. Even then, Brazil played a leading role in strengthening the international legal order.

Meanwhile, our commercial ties were growing stronger too. Nearly all major Dutch firms – like Philips, Shell and Unilever – opened branches in Brazil. Hundreds of other Dutch businesses have followed their example. At the same time, Brazilian companies like Petrobras, Braskem and Embraer were also opening branches in Europe. The traffic was no longer one way, and mutual trade flourished even more.

These days, Europe is Brazil’s largest trade partner. We account for 22 per cent of your total trade. And Europe is also Brazil’s main investor. European businesses are keen to come to Brazil. A logical choice, given its economic growth in recent years. Seven-and-a-half per cent in 2010. Two-point-nine per cent in 2011. That amounts to a GDP of more than 2 trillion US dollars. Brazil is now the sixth-largest economy of the world. The fact that Brazil expects growth of three-point-three per cent this year shows that Brazil has weathered the global financial crisis better than most.

In fact, between 2003 and 2011, 40 million Brazilians climbed out of poverty, joining the middle class. That’s a remarkable achievement. The B in acronyms like BRICS, IBSA and TIMBI represents a country now strongly associated with economic prosperity. Ruchir Sharma may at times be critical of Brazil’s rise, but he nonetheless called Brazil a ‘leading member of the BRICS’ in the latest issue of Foreign Affairs.

But it’s not only Brazil that has been transformed in this way. Countries like India, China, South Africa and Mexico are experiencing strong growth too. It’s noteworthy that Martin Jacques’ bestseller is called not If China Ruled the World but When China Rules the World.

By now, there is no European country in the world’s top five economies. That is a bit uncomfortable but not disastrous. Economics is not a zero-sum game. Everyone can benefit from more world trade. Including the Netherlands.

Take the emerging middle class in Brazil: these are the consumers of the future and the parents of tomorrow’s students. Our business sector stands ready to serve this new market and our internationally-oriented universities are keen to welcome students from all over the world, including Brazil.

Of course, certain conditions need to be in place. For a mutually favourable economic relationship, open markets and a level playing field are crucial. Protectionism does not lead the way. In his book The Post-American World, Fareed Zakaria argues that opening up markets was one of the main causes of the current growth of the new world powers. So the Netherlands urges equal treatment for European players on the Brazilian market.

Students, too, sometimes need a helping hand. Your university is a frontrunner here, with its partnership with Leiden University. In the future I hope to see even more academic cooperation between Brazil and the Netherlands. To this end, the Brazilian government has set up the ambitious ‘Science Without Borders’ scholarship programme. It will enable talented Brazilian students to spend a term or a year at a Dutch university studying for a Bachelor’s, Master’s or PhD, or doing postgraduate research. Dutch universities are planning to make no fewer than 2,500 places available for this programme. Perhaps there are students here today who are keen to take on this adventure? You are most welcome!

Why is it so important for Brazilian students to come to the Netherlands, and for people from my country to study at Brazilian universities? It’s because countries need to work together. Not just with their neighbours, but also with countries overseas. In fact, intercontinental cooperation is crucial.

At a recent meeting on ties between the EU and Brazil the European Commissioner for Trade Karel De Gucht said, ‘One of the things we have learned is that no country or region is an island’. He said this with good reason. We will have to work together ever more closely in the future. At present, we tend to see continents too much as islands. The Netherlands is currently the fourth-largest market for Brazilian exports, worth four-and-a-half billion dollars annually. Dutch exports to Brazil amount to almost 2 billion dollars. Both figures could be higher still. But more important than figures, Europe and Brazil should intensify their contacts. And for that, cooperation is necessary.

The world faces many challenges. Think of all the political issues these days that are labelled ‘global’. From global warming to the global war on terror and the global financial crisis. And ‘global’ is not just a meaningless adjective. These are problems that no country can escape. They are problems we can only solve jointly.

Of course, starting an international dialogue and taking responsibility is easier said than done. Ensuring an effective international system is a challenge in itself. In today’s world, the interests, values and priorities of the various players sometimes seem to be poles apart. Amin Maalouf highlighted these divisions in his book Disordered World.

For that matter: the system of international organisations needs to be brought into line with the new world order. It is significant that Brazil has taken the lead at the Rio +20 conference. The Netherlands is home to the major international courts and tribunals of the world. To align the international system with the current world order is one of the biggest challenges for countries with long multilateral traditions such as Brazil and the Netherlands. Tomorrow, in Brasilia, I will be joining Dutch and Brazilian academics to consider the role of the international community regarding serious international crimes like genocide.

For a long time now, Brazil and the Netherlands have lobbied for a strong international legal system. We have both enshrined this in our constitutions. Brazil does this by contributing to international fora and peace missions. Take the Brazilian UN observers in Syria and Brazil’s peacekeeping mission in Haiti.

We both aspire to help shape a legal order that is fit for the future. As lawyers, this ambition should appeal to you. Together we have the network we need to involve all countries in this dialogue. Together we can ensure an inclusive dialogue by getting South American and European partners round the table.

The other future challenge in which Brazil and the Netherlands can play a role is the global economic crisis. I can’t deny that this crisis threatens our prosperity. In Europe more than here. It has slowed economic growth in the Netherlands. And even though Brazil ranks sixth among the world’s economies, the impact of the crisis is seen in your latest growth figures. The outlook for the medium term is better, but the impact of the crisis will continue to be felt worldwide.

If we want to minimise that impact we need to promote economic growth. And the main condition for economic growth is innovation, as Joseph Schumpeter argued way back in the first half of the 20th century.

And that is where cooperation between Brazil and the Netherlands can be effective. The Netherlands profits from Brazilian expertise, and in return provides the know-how and technology needed to solve Brazilian problems. For successful innovation, sharp choices are necessary. Otherwise, in the words of Adam Smith, we risk buying all the tickets in the lottery. To avoid that risk, in the Netherlands we have identified several top sectors on which we are focusing our energies. For Brazil, our expertise in water, climate, food, sustainability and logistics is relevant, and so that’s where we’re aiming at collaboration. This can take very concrete forms. Take the transition from a fossil-based economy to a biobased economy – that is, from an economy that runs mainly on oil and coal to one that also runs on biomass.

Brazil has already made great progress towards a more sustainable economy. It has the capacity, the raw materials and the ambition; but it seeks partners with technological and scientific know-how. In the Netherlands we have the expertise, but do not always have the capacity or the raw materials. A perfect opportunity for us to join forces to create a cleaner and more prosperous world.

Cooperation is always easiest with like-minded partners. For centuries, our two countries have believed in free trade, science and tolerance. That means we share the same priorities. That we seek to work together to foster trade, innovation and growth. To promote a more stable, inclusive and decisive international order.

Ladies and gentlemen,

I would like to say one more thing about Maurits van Nassau-Siegen. About ‘nosso Maurício’. Maurits was related to the Dutch royal family, the House of Orange. And Orange brings me to one final area in which Brazil and the Netherlands are world players – and that is, of course, football.

I would like to conclude with a final wish. May our research institutes, business sectors and governments work together effectively and learn from one another, in the spirit of Maurits. Let us join hands to make the world a safer, cleaner and more sustainable place. But may we also, just once, be opponents. May the Brazilian Canarinhos and the naranja mecanica meet in the Maracanã Stadium in the World Cup final on 13 July 2014. I wish you all the best, but I hope the Dutch team will win!

Thank you.