Friday, December 17, 2010

Bureaucratization, Emulation and Internationalization--Welber Barral on The Driving Forces of Brazilian Development (Burocratização, Emulação e Internacionalização - Welber Barral considera as forças motrizes do desenvolvimento brasileiro)

There are a number of people in a number of developing states worth watching carefully.  They are that handful that are currently shaping the form and substance of international trade and trade policy for the coming generation.  While most  coverage focuses influential people within the "usual suspect states"--the U.S and Europe and to some extent China, (though perhaps because Western analysts find the names hard to decipher even there  less than optimal attention is paid)-- virtually no attention is paid to key players in Latin America.  

UNASUR Summit in Georgetown, Guyana, Nov. 29, 2010.  James Suggett, UNASUR Summit Ratifies Commitment to Constitutional Democracy, Rejects Coups,, Nov. 29, 2010 ("Lula also highlighted the failure of economic policies backed by the U.S. and the International Monetary Fund (IMF), and the success of progressive, democratically-elected governments in creating progress in the region. “[The IMF] knew just how to resolve the Argentine crisis, they knew how to resolve the crisis in Peru, Mexico, and Brazil, but when the crisis is their own, they do not know how to resolve it,” Lula said." Id).

That is a shame because, to some extent, trade policy is being developed around those lumbering elephants that are those aggregations of self referential "insiders" in the U.S. and Europe. While these old powers increasingly look inward, younger, optimistic, aggressive economies are quickly developing a network of trade within which the older powers play a less significant role.

Among those significant actors that merit substantially more attention is Welber Barral, Secretary of Foreign Trade in the Ministry of Development, Industry and Trade (MDIC).  Over the last several years he has been quietly shaping Brazilian trade policy in new ways that are not necessarily grounded in the assumption set that guides European and American trade policymakers.  See Larry Catá Backer, Welber Barral Speaks to American Business Interests: Convergence and Divergence of U.S. Brazil Economic Trade, Law at the End of the Day, April 10, 2010.

Alessandro Cristo and Lilian Matsuura,
Juiz precisa analisar consequências de suas decisões, Consultor Juridico, August 2010.

Barral, with extensive experience in MERCOSUR, has served as Secretary of Foreign Trade since 2007.   
O professor de Direito Comercial Welber Oliveira Barral é o novo titular da Secretaria de Comércio Exterior do Ministério do Desenvolvimento, Indústria e Comércio (Mdic). Ele assume no lugar de Armando Meziat, que continua na equipe do ministro Miguel Jorge, agora comandando a Secretaria de Desenvolvimento da Produção (SDP). Barral foi convidado, segundo a assessoria do ministro, por ter larga experiência em relações internacionais e ser um dos principais especialistas em defesa comercial na América Latina. Welber Barral assume Secretaria de Comércio Exterior do Ministério do Desenvolvimento,  O Globo, Oct. 19, 2007 (Professor of Commercial Law Welber Barral Oliveira is the new head of the Secretariat of Foreign Trade in the Ministry of Development, Industry and Trade (MDIC). He takes the place of Armando Meziat, who remains on the staff of the Minister Miguel Jorge, now heading the Department of Production Development (SDP). Barral was invited, according to the advice of the Minister, because of his extensive experience in international relations and as a leading expert in the defense of trade in Latin America).
A recent interview suggests the scope of Barral's perspectives on trade and the role of Brazil in the new economic world order. Alessandro Cristo and Lilian Matsuura, Juiz precisa analisar consequências de suas decisões, Consultor Juridico, August 2010.  What follows is an analysis  of those perspectives in Mr. Barral's own words (with workable though not elegant translations from the original Portuguese).

Barral understands law in an instrumental sense.  But law is not merely a framework for the development of substantive or normative principles, but ought to embody those principles itself. Recalling the work of Amartya Sen, and the law and development movement in the U.S. a generation ago, Barral rejects as simpleminded the singular link between development and growth.  He suggests a link between law, development and cultures of institutionalized human rights through law.
ConJur — Como o Direito influencia o desenvolvimento dos países?
Welber Barral — Houve um movimento nos Estados Unidos, a partir da década de 1960, chamado de Direito do Desenvolvimento. Foi uma tentativa de vincular o efeito do Direito sobre o desenvolvimento econômico. Esse movimento diminuiu um pouco nas décadas seguintes, até pela influência do neoliberalismo, mas houve um ressurgimento do debate. O que tem de diferente nos últimos anos é o seguinte: na década de 1960, o desenvolvimento era visto muito sob o foco do crescimento econômico. O que interessava era como o Direito influenciava positivamente ou negativamente no crescimento econômico. Na década de 1990, e principalmente nos dias atuais, ganhou muita relevância um trabalho de Amartya Sen [economista indiano], que ganhou o prêmio Nobel de 1998, sobre desenvolvimento como liberdade. Ele tentou mostrar que desenvolvimento não é só crescimento econômico, mas tem como finalidade a liberdade e os Direitos Humanos, e que o papel do Direito tem que ser olhado em relação ao desenvolvimento nesse conceito mais amplo. O Direito tem um papel crucial, muitas vezes negativo no crescimento econômico, mas também tem um papel no que se refere ao desenvolvimento social, para a diminuição de desigualdade de renda, de gêneros, e a defesa das minorias. Em um projeto da Associação Brasileira de Desenvolvimento Industrial, nós tentamos avaliar quais ações proporcionariam isso. Tivemos um grande debate no ano passado envolvendo a Ordem dos Advogados do Brasil, o Supremo Tribunal Federal e o Conselho Nacional de Justiça. (Id.).

Barral tends to understand development, and economic markets within a broader context than was fashionable during the middle of the last century when more blinkered policies suggested the possibility of segmenting social and economic policy, and, more disastrously,  pretending that every  territorially limited state could manage its economics to provide within its borders the entire economic order necessary for prosperity.  That  this difference in approach marks the current generation of leaders in developing states is no great insight.  But the application of this approach  beyond its utility as political rhetoric, and its implementation in a pragmatic way to successfully move development forward  is noteworthy. Barral also tends to understand law as instrumental but not necessarily as the determining force in development.  Barral pulls back from the tendency of American elites to understand law as metaphor, proxy and fetish.
Conjure - How the law influences the development of countries?
Barral - There was a movement in the United States from the 1960s, called the Law of Development. It was an attempt to link the effect of law on economic development. This movement was somewhat reduced in the following decades, until the influence of neoliberalism, but there was a resurgence of debate. What's different in recent years is as follows: in the 1960s, development was seen too much from the perspective of economic growth. What mattered was how the law influenced positively or negatively on economic growth. In the 1990s, and especially nowadays, has gained much relevance a work of Amartya Sen [Indian economist], who won the Nobel prize in 1998, on development as freedom. He tried to show that development is not only economic growth but is intended to freedom and human rights, and that the role of law has to be looked at in relation to this broader concept. The law has a crucial role, often negative on economic growth, but also has a role with regard to social development, to reducing income inequality, gender, and protection of minorities. In a project of the Brazilian Association for Industrial Development, we try to assess what actions would provide that. We had a great debate last year involving the Order of Lawyers of Brazil, the Supreme Court and the National Council of Justice. (Id.)

How, then, might law contribute to development?  Barral suggests the irony of the question and the perverse element in ideological imperatives in development.   Law best furthers development by getting out of the way!  (ConJur — O que o Direito pode fazer para contribuir?. . . .Welber Barral — A primeira resposta é deixar de atrapalhar tanto. (risos)).  Barral then explains the insight behind the joke, suggesting the way that the law’s wielders can misuse an ideologically driven instrumentalism.
Welber Barral — Toda a ordem jurídica, e todos os operadores jurídicos, por várias razões. Para se ter crescimento econômico, um dos itens fundamentais é ter previsibilidade, mas em uma ordem jurídica como a brasileira, o grau de imprevisibilidade é muito grande. Temos o famoso fenômeno das normas que pegam ou que não pegam, ou que são interpretadas de várias formas diferentes. E não falo da interpretação na Justiça, mas também na esfera administrativa, como quando uma norma tributária, por exemplo, tem interpretação diversa dependendo do fiscal com o qual se fala. Outro efeito negativo é o tempo para solução dos conflitos. O custo de um contencioso judicial para a ordem econômica vai muito além dos valores que estão em jogo. Envolve também o efeito negativo da não solução do conflito ou da solução muito lenta. (Id.).
(Barral-- the whole legal order, and all legal operators, for a variety of reasons. To have economic growth, one of the key items is to have predictability, but in a legal system such as Brazil, the degree of unpredictability is great. We have the famous phenomenon of the rules stick and those that don’t, or which are interpreted in a variety of different ways. And do not speak of judicial interpretation, or at the administrative level, as when a tax rule, for example, has different interpretations depending on the official who interprets. Another negative effect is the time required to solve disputes. The cost of litigation for the economic order goes far beyond the values at issue. It also involves the negative effect of not resolving the conflict or the solution very slowly.)

Barral suggests a perverse effect to the juridicialization that marks the governance structure of advanced states.  For developing states that produices, in cases like Brazil, both the need to build capacity—that is to produce more and more efficient judicialized institutions (from courts to quasi-judicial administrative organs)—and to overcome a certain overprodiuction of judicialized capacity.  There are both too many and too few outlets for both lergal interpretation and its application in the ordinary transactions of individuals seeking to engage in productive activity. 

And yet the problem folds back to the judiciary in its oversight role with respect to rules and the operation of the state.  In a way that is perhaps more telling for similar problems in the United States, Braarl suggests the consequences of the global movement toward judicialization of the state.  These include a number of serious issues.  First, is the increasing mania for the constitutionalization of legal questions (the every-case-is-foundational problem now adversely affecting American efforts to operate an efficient and coherent governance system).  Second is the tendency toward abstraction in judicial decision making and policy making generally, producing increasing incoherence between legal doctrine and the realities of individual and entity behavior.  Third is the common difficulty of legislating ambiguity that then shifts a quasi-legislative role to courts which, in the context of discrete disputes, must effectively construct a set of rules to apply from out of the formal ambiguity enacted in statute. 
 ConJur — Por que a gestão pública é tão ruim, o que inclui desde atos administrativos até a elaboração de leis, frequentemente mal feitas e questionadas no Supremo Tribunal Federal?
Welber Barral — Há um rosário de problemas, que começa pela incompatibilidade constitucional, o que se deve em parte à extensão da Constituição Federal, e dos vários setores a que ela se refere. Alguém já disse que o Brasil sofre de “constitucionalite”, porque a todo tempo discutimos a constitucionalidade das normas. Outro problema é a forma como as normas são construídas, que não leva em conta dados da realidade.
Conjure - Why is governance so bad, including everything from administrative actions by making laws, often poorly made and asked the Supreme Court?
Barral - There is a litany of problems, starting with the constitutional incompatibility, which is partly due to the extension of the Federal Constitution and the various sectors to which it refers. Someone has said that Brazil suffers from "constitutionalitis", because we are constantly discussing the constitutionality of norms. Another problem is how the rules are constructed, which does not take into account data from reality.
ConJur — Por exemplo?
Welber Barral — Há uma tensão permanente entre a administração da Receita Federal em Brasília e os fiscais nos portos. Os fiscais reclamam que as normas que chegam não se coadunam com a realidade. Você redige uma norma que parece muito clara e óbvia, mas o destinatário não a compreende, nem o servidor, nem o usuário. Redigir norma é muito difícil. Eu já tive situações em que o entendimento dentro do governo foi contrário ao que nós queríamos. Foi por motivos como esse que eu comecei a adotar na Secretária de Comércio Exterior a praxe de colocar propostas de portarias em consulta pública. Isso não era feito antes. . . .
Conjure - For example?
Barral - There is a continuing tension between the administration of the Internal Revenue Service in Brasilia and the inspectors at ports. Inspectors complain that the rules produced in Brasilia are not consistent with reality. You write a rule that seems very clear and obvious, but the recipient does not understand it, neither the server nor the user. Drafting standards is a very difficult task. I've had situations where the understanding within the government was contrary to what we wanted. It is for reasons like this that I implemented in the Secretariat of Foreign Trade the practice of seeking public consultation for administrative proposals. This had not been done before. . . .
ConJur — Faz parte da técnica legislativa manter a ambiguidade das normas.
Welber Barral — Às vezes, sim. Alguém já chamou isso de ambiguidade construtiva. Você tenta negociar uma norma dentro do governo, até que chega um momento em que não há consenso, e você deixa a definição um pouco em aberto. O problema é que isso vai acabar no Judiciário, muitas vezes com interpretações tão divergentes quanto aquelas que havia dentro do governo. As entidades empresariais e dos trabalhadores, por exemplo, precisam ter participação mais efetiva inclusive no nível administrativo de construção normativa. Ao lado disso, o sistema de fiscalização se tornou excessivamente burocrático. . . .  Se temos uma portaria que tem um impacto muito ruim no comércio exterior, de outro lado temos a responsabilidade de quem aprovou a norma, e toda a discussão que pode vir da CGU [Controladoria-Geral da União, da Advocacia-Geral da União] e do TCU [Tribunal de Contas da União] muitas vezes causa imobilismo.
Conjure - Is part of the technique of writing legislation to maintain the ambiguity of rules?
Barral - Sometimes, yes. Someone has called this a constructive ambiguity. You try to negotiate a standard within the government, to the point at which no further consensus is possible, and you leave the definition a little open. The problem is that it will end in the courts, often with vastly differing interpretations as those that were within the government. Business entities and workers, for example, need to have more effective participation at the administrative level including the development of regulations. On the other hand, oversight systems have become too bureaucratic. . . .  If we have an ordinance that has a very bad impact on foreign trade, on the other hand we have the responsibility of those who approved the rule, and any discussion that may come from CGU [Comptroller General of the Union of Solicitor General of the Union] and TCU [Court of Accounts] often causes paralysis.
Barral agrees that these are problems common to developing states, especially those that had emerged from a period of authoritarian government and are trying to build a rule of law state from out of that experience. It also plagues developed states as well.   In his work on developing standards for business and human rights, John Ruggie has also noted the significance of policy coherence as a governance drag.
My work on investment is part of examining the role of states in regulating and adjudicating corporate activities vis-à-vis human rights, as requested in my initial mandate.  All throughout this examination I have found a lack of policy coherence within and among states in dealing with business and human rights issues. The domain of human rights policy tends to be segregated within its own conceptual and (typically weak) institutional box—kept apart from, or heavily discounted in, other policy domains that shape business practices, including commercial policy, corporate law and securities regulation.  Investment policy also fits into that list.” John Ruggie, An interview with Professor John Ruggie, United Nations Special Representative of the Secretary General on Business & Human Rights, October 1, 2008, Investment Treaty Rules.
In such socio-cultural historical circumstances, a political society’s ability to build an appropriate institutional structure to take fullest advantage of an effective and efficient judicial order becomes more difficult.  In such circumstances, it is also challenging to construct a legal system that is predictable, stable, guaranteeing equality between citizens and providing rapid resolution of conflicts.

ConJur — Esses não são problemas comuns na maioria dos países?
Welber Barral — Esses fenômenos são vistos em outros países em desenvolvimento, principalmente aqueles que passaram por um período autoritário, como no nosso caso, que estão construindo um Estado de Direito. Há dificuldade de se construir uma ordem jurídica que seja previsível, estável, que garanta a igualdade entre os cidadão e que proporcione rápida solução de conflitos. (Alessandro Cristo and Lilian Matsuura, Juiz precisa analisar consequências de suas decisões, Consultor Juridico, August 2010.)
Conjure – Aren’t these problems common in most countries?
Barral - These phenomena are seen in other developing countries, especially those who have experienced an authoritarian period, as in our case, that are attempting to build a rule of law state. It is difficult to construct a legal system that is predictable, stable, guaranteeing equality between citizens and which provides quick resolution of conflicts.

Barral then suggests the possible connection between legal structures that do not hinder economic development and the growth of free markets.  Barral suggests that the legal system provide the rules under which markets operate.  Those rules depends to a substantial extent on a country's historical experience, rather than on the power of imported legal concepts, for example legal concepts imported from some university in Chicago. In other words, more important than a legal system more or less rigid is the issue of predictability. You know what the rules of the game and make sure that these rules are stable.
ConJur — E que permita o livre mercado?
Welber Barral — A ordem jurídica tem que dar as regras para o mercado. Isso depende muito mais de uma experiência histórica do país do que de um conceito jurídico importado de alguma universidade de Chicago. Em outras palavras, mais importante do que uma ordem jurídica mais ou menos rígida é a questão da previsibilidade. É saber quais são as regras do jogo e ter a certeza de que essas regras são estáveis.
Conjure - And what permits a free market?
Barral - The legal system must develop rules for the market. That process depends much more on a country's historical experience rather than on diembodied legal concepts imported from some university in Chicago. In other words, more important than a legal system that may be more or less rigid is the issue of predictability. You know what the rules of the game and make sure that these rules are stable.
There is a tension, then, between development, markets, the institutional sophistication of states and the ordering of private markets.  Those are to some extent dictated by the history of a state, but they are also affected by global currents of ideological benchmarks.  But it is the internal struggle, rather than the struggle o ideas, that marks the difference between states that successfully develop an internal governance architecture and those that become adept merely at speaking around the ideologies of those efforts.  
ConJur — O que precisamos fazer para chegar nesse estágio?
Welber Barral — Nesse projeto, nós tentamos identificar alguns itens da ordem jurídica brasileira que tenham impacto grande no desenvolvimento. Com a participação de vários ministérios e órgãos do governo, nós tentamos selecionar alguns itens. Primeiro, a desburocratização. O custo da burocracia no Brasil é muito alto. Em termos econômicos, você define isso como custo de transação. Para os negócios, ele é muito alto aqui. É necessária uma diminuição de burocracia principalmente na área tributária. Evidentemente, quando nós falamos da área tributaria, temos que pensar em reforma tributária, porque há, por exemplo, acúmulo de tributos na exportação, e tributos regressivos. Mas nós não estamos preocupados com isso, porque, embora seja muito importante, nós não vamos alcançar essa mudança, porque ela depende do Congresso. O que nós fizemos, por exemplo, foi uma iniciativa chamada de facilitação do comércio exterior, que reuniu 40 órgãos do governo que intervêm no comércio exterior. O propósito foi simplesmente unificar procedimentos federais.
Conjure - What must we do to reach this stage?
Barral - In this project, we tried to identify some items in the Brazilian legal order which have great impact on development. With the participation of various ministries and government agencies, we try to select some items. First, the bureaucracy. The cost of bureaucracy in Brazil is very high. In economic terms, you define that as transaction costs. For businesses, it is very high here. It required a reduction in bureaucracy especially in the tax area. Of course, when we speak of the tributary area, we have to think about tax reform, because there are, for example, accumulation of taxes on exports, and regressive taxes. But we're not worried about it because, though very important, we will not achieve this change, because it depends on Congress. What we have done, for example, was an initiative called the facilitation of foreign trade, which brought together 40 government agencies involved in foreign trade. The purpose was simply to unify federal procedures.
And ultimately, Barral suggests, though subtly, that perhaps the best approach to the development of an effective state apparatus that is rules based and efficient, is to force the state to compete with alternative forms of market organization and discipline.  In effect, Barral suggests, justice, and the state order, is itself a commodity that might respond positively to competition.  But not too much competition!  The object is not to displace the state but to produce incentives and alternative structures that might at best produce innovation and at worst supplement and cover deficiencies in state operation.  The most apparent place for this sort of market approach to governance is in the dispute resolution sector—the market for resolution of conflicts between private parties in the ordering of their affairs and the application of the rules through which their transactions are regulated and market structures legitimated and strengthened.  Barral is especially a fan of arbitration as a mechanics of this approach.  Arbitration has the benefit of providing an alternative to state institutions, principally ts courts, without serving as a source of g independent of the state.  
ConJur — A arbitragem pode dar vazão às demandas que, na Justiça, passariam anos sem solução?
Welber Barral — Eu sou entusiasta da arbitragem, tenho um livro sobre isso. No comércio internacional, é a forma usual de solução da controvérsia. O Brasil entrou tarde no uso da arbitragem, mas evoluiu muito rapidamente. Hoje, o país está se tornando importante no cenário internacional de arbitragem até pela internacionalização de suas empresas. . . .No ano passado, dentre os países da America Latina, o que mais teve casos na Câmara de Comércio Internacional foi o Brasil.
Conjure - Arbitration may give way to demands from the Justice would go years without a solution?
Barral - I'm enthusiastic about the refereeing, I have a book about it. In international trade, is the usual way of settling the dispute. Brazil only recently started to permit arbitration, but it has evolved very quickly. Today the country is becoming important participant in international arbitration in the face of the internationalization of Brazilian companies. Last year, Brazil had more cases in the International Chamber of Commerce among the countries of Latin America.

Barral emphasizes that arbitration and judicial dispute resolution have a more complex relationship than  that marked by mere competitors in the market for dispute resolution. Barral reminds us that the market for dispute resolution is not  a single space and that the market for the settlement of disputes can be segmented.  Markets for resolution of economic disputes among market actors can be segmented without harming the state’s ability to provide a public forum for the implementation of other norms.  Barral suggests that even issues of consumer arbitration, that is of segmenting economic disputes at the consumer or end user level, might be distinguished.  The object, of course, is to provide a variety of options for an identifiable unit of market demand—economnic actors—and to treat access to a variety of forms of dispute resolution as a good that itself has utility and value.

ConJur — Se o Judiciário fosse rápido, a arbitragem não existiria?
Welber Barral — O Judiciário e a arbitragem não concorrem. São públicos diferentes. Não vai haver uma popularização da arbitragem. Isso não aconteceu em lugar nenhum no mundo. Só na Espanha existe uma arbitragem de consumo, mas que é subsidiada pelo Estado. O que interessa para a arbitragem é a meação para conflitos empresariais. Grande parte dos conflitos no Brasil são fiscais, criminais ou de família. Então, ela não vai resolver o problema do Judiciário.
Conjure - If the Judiciary were faster, would there be a need for arbitration?
Barral - The judiciary and arbitration do not compete. Each is focused on distinct consumers. There will not be a popularization of the arbitration. That has happened nowhere in the world. Only in Spain there is consumer arbitration, but that is subsidized by the state. What matters to arbitration is the market for business conflicts. Much of the conflict in Brazil are fiscal, criminal or family. So it will not solve the problem of the judiciary.
Thus the problem of operationalizing governance is squarely planted.  For Brazil, that requires overcoming the political psychosis of Brazilian entanglement with both authoritarianism and its aftermath.  Brazilian authoritarianism produced a national mania for control, one that did not disappear along with the authoritarian regime.  It seems that the structures of authoritarianism are as adaptable to a rule of law democracy as it is to an authoritarian regime.  Thus, the bureaucratization of public control speaks both to the irony of and the greatest impediment to Brazil’s development. But ironically, Barral also holds a mirror up to impediments that are becoming more and more of a feature of American bureaucratic culture.  Perhaps the U.S. is now acquiring those distressing bureaucratic habits that Brazil is trying to shed.
ConJur — Qual a origem do problema da burocracia brasileira?
Welber Barral — Vem dessa história autoritária, que gerou uma tentativa muito grande de controle de todos esses órgãos, inclusive com atividades sobrepostas, que geram um custo muito grande para o fluxo dos negócios. Alguém que queira fazer uma pesquisa científica no Brasil e precise de insumos importados vai ter de conseguir uma autorização da Secex [Serviço de Comércio Exterior, do Ministério do Planejamento], outra da Anvisa [Agência Nacional de Vigilância Sanitária, do Ministério da Saúde], outra do Ministério da Agricultura, e dependendo do produto, até mesmo uma do Ministério da Justiça. São vários formulários que não falam entre si, e informações que não são compartilhadas pelos órgãos. Cada hora perdida é um custo para quem está interessado nessa pesquisa.
Conjure - What is the source of the problem of bureaucracy in Brazil?
Barral – It is the consequences of this authoritarian history, which generated a great attempt to control all these organs, including overlapping activities, which generates a significant costs for the flow of business. Someone who wants to do scientific research in Brazil and needs imported inputs will have to get permission from Secex [Foreign Commercial Service, the Ministry of Planning], another from Anvisa [National Agency for Sanitary Surveillance, Ministry of Health], another of the Ministry of Agriculture, and depending on the product, even a Ministry of Justice. There are a number of forms that are not well coordinated, and information is not shared by the agencies. Every hour lost lost in this is a cost for those interested in pursuing research.

Barral contrasts the bureaucratization, as impediment, that characterizes Brazil and the role of the state as facilitator of innovation that is best exemplified by the most developed states.  For Barral, the best example of this form of state facilitation of innovation and entrepreneurship is not the United States but Israel. The Israeli approach to the regulation of creating and shutting down enterprises is offered as an example of a model worth emulating.

Welber Barral — É outro setor no qual estamos trabalhando, o de abertura e fechamento de empresas no Brasil, problema que foi apontado pelos órgãos e pela CNI [Confederação Nacional das Indústrias]. Nós fizemos um acordo de livre comércio com Israel, envolvendo o Mercosul, e também tem um acordo de tecnologia entre Brasil e Israel, que foi fechado conjuntamente. O objetivo é a promoção de inovação. Conversando com eles, nos deparamos com a facilidade para abrir uma empresa em Israel. Lá, se alguém abre uma empresa e quer fechá-la depois porque não deu certo, recebe todo o apoio do Estado, porque ele tentou, e foi premiado por isso, para tentar de novo. É um incentivo ao empreendedorismo. No Brasil, ao contrário, há uma punição para quem falha em um empreendimento.
Barral – This is another sector in which we are working, opening and closing a business in Brazil, a problem that was appointed bodies and the CNI [National Confederation of Industries]. We made a free trade agreement with Israel, involving Mercosur and also has a technology agreement between Israel and Brazil, which was closed together. The goal is to promote innovation. Talking with them, we are faced with the ease of starting a business in Israel. There, if someone opens a business and want to close it then because it did not work, gets all the state support, because he tried and was rewarded for this, to try again. It is an encouraging entrepreneurship. In Brazil, by contrast, there is a penalty for failure in an enterprise.
But the cure for this impediment of democratic bureaucratization and its negative effect on free markets is not limited to emulation.  Significantly, Barral suggests that internationalization, or better put, more sustained engagement in the international economic order might be a way in which Brazil might overcome its historical politio-cultural limitations, without succumbing to the ideological imperatives of another states (understood, from the Brazilian perspective, as the United States).
ConJur — Como compensar esse atraso para competir com países menos complicados?
Welber Barral — Trabalhamos para tentar atualizar o Brasil em relação a alguns acordos internacionais na área de comércio internacional, dos quais, por desinteresse ou lentidão do Congresso, ainda estamos de fora. Foi o caso da Convenção de Istambul, que permite que mostras e amostras possam entrar e sair do país com mais facilidade. Ou seja, a peça ganha um passaporte. Boa parte dos países já ratificou, mas o Brasil não. A gente acelerou isso. A aprovação passou na Câmara neste mês, mas ainda falta o Senado. Outro exemplo é a Convenção de Viena, fundamental para definir contratos de compra e venda de bens internacionais. O Brasil, inexplicavelmente, não era nem signatário. Nós levamos esse termo para a Camex [Câmara de Comércio Exterior, do Ministério do Desenvolvimento], mostramos a relevância, e decidiu-se pela assinatura. Agora, está no Congresso para ratificação. Neste momento, nós estamos trabalhando nas Convenções de Roterdã, sobre comércio marítimo, e de Kyioto, sobre procedimentos aduaneiros. São todos procedimentos que trazem para o Brasil o cumprimento de padrões internacionais de comércio.
Conjure - How can Brazil compensate for this lack of development to compete with states with more efficient systems?
Barral – We must work to try to upgrade Brazil in relation to certain international agreements in the area of international trade, of which, for lack of interest or slowness of Congress, we are still outside. This was the case from the Istanbul Convention, which allows samples shows and can enter and exit the country more easily. That is, the piece gets a passport. Most countries have ratified, but not Brazil. We accelerated it. The approval passed the House this month, but still lack the Senate. Another example is the Vienna Convention, vital to establish contracts for the purchase and sale of international assets. Brazil, inexplicably, was not a signatory. We take this term to Camex [Board of Trade, the Ministry of Development], we show the relevance and decided by the signature. Now he is in Congress for ratification. Right now, we're working on the Rotterdam Convention on maritime trade, and Kyoto on customs procedures. Are all procedures that bring to Brazil the fulfillment of international standards on trade.

But internationalization is not limited to the usual focus on global engagement, and the interweaving of Brazil more closely within, and to become an influential voice in the construction of, these international norms architecture.  Brazil continues to work toward operationalizing the regional trade group in which it is dominant (and, of course, resisting the efforts of more powerful neighbors, like the United States, to substitute other regional arrangements).  Yet MERCOSUR remains a tricky proposition, precisely because of the fears of Brazil’s neighbors of substituting a Brazilian giant for an American (or Chinese) one.  Yet MERCOSUR continues to show all of the limitations of a trade union, especially with respect to tariffs, and Brazil still has a way to go before goods actually move freely within this trade zone.

ConJur — Em que o novo Código Aduaneiro do Mercosul vai facilitar as relações comerciais?
Welber Barral — A primeira vantagem é um nível de harmonização dentro do bloco. No Brasil, tivemos uma evolução muito rápida dessa matéria. Algumas mudanças ocorreram inclusive sem consulta aos outros sócios do Mercosul, o que criava um problema de compatibilidade na importação de um produto para o Brasil e para outros países. O segundo impacto importante é evitar a dupla cobrança. Quando uma matéria-prima entrava pela Argentina para ser usado na montagem de uma máquina no Brasil, por exemplo, pagava a tarifa nos dois países. . . .
Conjure – In what ways does the new Customs Code facilitate Mercosur trade relations?
Barral - The first advantage is the attainment of a degree of harmonization within the block. In Brazil, we had a very rapid evolution of this matter. Some changes have occurred even without consulting the other members of Mercosur, which created a compatibility problem in importing a product for Brazil and other countries. The second major impact is to avoid double charges on tariffs. When a raw material came from Argentina to be used in the assembly of a machine in Brazil, for example, tariffs must be paid in both countries. . . .

Barral, though, believes that, as flawed as the MERCOSUR model is, it continues to provide a mechanism for trade within the MERCOSUR partners that wouyld not be available without it. 
ConJur — Com isso o volume de negócios vai aumentar?
Welber Barral — É essa a ideia. O comércio já vem aumentando muito. Com a Argentina, nesse ano, o comércio já superou o nível de 2008, que foi o ano recorde de todo o comércio exterior brasileiro. A integração produtiva envolve tanto investimentos brasileiros quanto cadeias produtivas nesses países para serem fornecedores da nossa indústria. Há peças da Embraer que hoje são fornecidas por uma empresa Argentina. No setor naval, nós estamos desenvolvendo projetos específicos para qualificar fornecedores uruguaios na Argentina.
Conjure - With the volume pf trade increase?
Barral - That's the idea. The trade has been increasing greatly. In Argentina, this year, the trade has already surpassed the 2008 level, which was a record year for the entire Brazilian foreign trade. The integration involves both productive investments and Brazilian production chains in these countries to be suppliers of our industry. There are parts of Embraer today are provided by an Argentine company. In the naval sector, we are developing specific projects to qualify suppliers Uruguayans in Argentina.

The operating framework, one that Barral emphasizes at length, is the notion, once a central part of American foreign policy as well, that trade and economic integration is the key both to the harmonization of norms and to the deepening of regimes of non-violent competition among states.  That philosophy appears to run deep within Brazilian governance circles.  It has guided Brazlian policy from opposition to sanctions against Iran, to the recognition of Palestinian statehood (coupled with closer trade ties with Israel). 
ConJur — Essas relações são seguras, diante da instabilidade dos vizinhos?
Welber Barral — Keynes [John Keynes, idealizador das teorias capitalistas do livre mercado na década de 1960], depois da Convenção de Paz, dizia o seguinte: “fronteiras por onde não passam mercadorias, acabam passando soldados”. O comércio internacional também é um fornecedor da paz e da estabilidade institucional.
Conjure – Are these relationships are safe, in light of the instability of the neighbors?
Barral - Keynes [Keynes John, founder of the theories of free market capitalists in the 1960s], after the Peace Convention, read: "borders through which goods do not pass, wind up opening up to soldiers." International trade is also a provider of peace and institutional stability.

Barral is also a great supporter of the WTO framework, as both norm generator and framework through which trade relations can be institutionalized, and trade polciies harmonized.  Brazil, unlike the United States, has been abe to use the WTO aggressively in the service of its national interests.  Whiel the United States falters in this sector, plaugued by self-doubt and immense ideological rifts within its elites, the Brazilians have managed to overcome similar internal disruptions and present a more unified and aggressive approach to the use of the global trade framework.   Certainly, within the WTO  fora Brazil has managed consistently to outlawyer the United States, and to manage global trade policy more effectively than the United States. 
ConJur — O Brasil ganhou diversas demandas contra adversários na Organização Mundial do Comércio. Isso é bom para nossas relações?
Welber Barral — É excelente. O Brasil é o país em desenvolvimento que mais reclama na OMC. Temos 1% do comércio internacional, mas estamos envolvidos em 10% dos litígios na OMC. Somos o país em desenvolvimento que mais reclama, e ganhamos praticamente todos os litígios dos quais participamos. Alguns casos foram clássicos, como o da gasolina, o primeiro na OMC. Agora, vencemos no caso do algodão. Isso tem um efeito bastante positivo, em primeiro lugar, sistêmico. Isso porque, dessa forma, o Brasil diz: “nós cumprimos as regras, e vocês também têm que cumprir”. Ou seja, o comportamento gera estabilidade também de regras no comércio internacional. Em segundo lugar, a prática incentiva maior participação do empresariado nacional junto ao governo, para que nós possamos apresentar essas demandas nos foros internacionais.
Conjure - Brazil has won a number of actions against opponents in the World Trade Organization. Is this good for our external relations?
Barral - is excellent. Brazil is the developing country with the most claims in the WTO. We have 1% of international trade, but we are involved in 10% of disputes in the WTO. We are a developing country with more demands, and won virtually all litigation in which we participate. Some cases were “classics” such as gasoline action, the first in the WTO [action against the United States arguing that the 1990 Clean Air Act violated WTO rules because it set different pollutant standards for foreign gasoline producers than it did for domestic ones]. Now, we won in the case in the cotton dispute. This has a very positive effect, firstly, systemic. This is because, in this way, Brazil says, "we fulfill the rules, and you also have to fulfill." That is, the behavior of rules also creates stability in international trade. Secondly, the practice encourages greater participation of the national business with the government, so we can make these demands in international forums.

China overtakes the US as Brazil's largest trading partner, The Telegraph, May 9, 2009) (" China has become Brazil's most-important trading partner, disrupting a relationship between the United States and the Latin country that stretches back to the 1930s. (Carnival celebrations in Rio de Janeiro, Brazil Photo: AFP/GETTY) (read more here).

But it is one thing to deploy strategies of bureaucratization, emulation and internationalization in setting development policy and in competing against  the old economic powers—principally the United States and the European Union—it is quite another to construct policies of angagement against another rising power, the Peoiple’s Republic of China.  But Barral remains confident that Brazil can comnpete with China, and comnpete with China on China’s terms (and even on China’s turf in Africa).  The object, for Barral is to encourage trade without becoming a “plantation state” for Chinese interests.  That is not necessarily a easy position to maiintain.
ConJur — Dentro de pouco tempo, a China será a maior economia do mundo. Qual o nível de relação comercial que temos com ela?
Welber Barral — A relação com a China é interessante, ela se tornou o principal parceiro comercial do Brasil. É um país que tem tido importância muito grande no que se refere a manter o superávit da balança comercial brasileira. Ela tem importado muito e deve importar mais ainda. Além disso, está havendo investimento dos chineses no Brasil. Mas precisamos diversificar nossas exportações para a China. Ela fica muito concentrada em produtos básicos. Também vamos competir cada vez mais com a China por terceiros mercados.
Conjure - Within a short time, China will become the world's largest economy. What level of business relationships does Brazil have with China?
Barral - The relationship with China is interesting, it became the main trading partner of Brazil. It is a country that has very great importance with regard to maintaining a trade surplus in Brazil. It has imported a lot and must import more from us. Moreover, there is Chinese investment in Brazil. But we need to diversify our exports to China. She is very focused on commodities. We will also increasingly compete with China in third markets.

For all that, Barral acknowledges that there is some fear within Brazil about its ability to compete with China without becoming subordinate to Chinese interests.  Reflecting Brazilian confidfence in its own development, and perhaps as well in the competitive shape of its own labor markets, Barral, argues that China does not pose a special threat to Brazilian interests.  Instead it is merely another competitior against which Brazil has the capacity to outperform.  For Barral, there may be little functional differenbces between competition with the United States or China.  In both cases, Brazil appears ready to deploy its successful WTO action strategy and to outperform its competitiors in those segments where Brazilian manufactirers can gain an edge. 
ConJur — Os chineses provocam muitas reclamações…
Welber Barral — As questões comerciais que nós temos envolvendo a China não são diferentes das que temos com outros países. Reclamamos que a China tem escalada tarifária com a soja, que pôs barreiras à exportação brasileira de carne de porco, enfim, temos uma lista de reclamações. Agora, o que nos tem preocupado é aumentar a competitividade da indústria brasileira para competir com produtos chineses em terceiros mercados. Não só no americano, onde eles são muito agressivos, mas principalmente na América Latina. O mercado para maquinário, automóveis e peças brasileiras é na América Latina, onde os chineses estão entrando com muita agressividade. Uma das principais regiões onde há exportação de serviços brasileiros, principalmente de construção civil, é a África, onde nós competimos muito com os chineses também.
Conjure - The Chinese provoke many complaints ...
Barral - Trade issues we have involving China are no different from what we have with other countries. We claim that China has tariff escalation with soybeans, and impose barriers on Brazilian exports of pork, indeed, we have a list of grievances. Now, what has us worried is to increase the competitiveness of Brazilian industry to compete with Chinese products in third markets. Not only in America, where they are very aggressive, but mostly in Latin America. The market for machinery, automobiles and parts of Brazil is Latin America, where the Chinese are moving very aggressively. One of the main regions where Brazilian exports of services, mainly construction, is Africa, where we compete with the Chinese very well.

And thus wistfully, at leats to American ears, Barral remains supremely optimistic about Brazil’s ability to compete.  He odffers an insight that American policymakers once understood and havce seemed to abandon in the mania to become ideologically pure and functionally bankrupt.  The solution to development is to increase competitiveness at the state asd well as in the private sector. And Brazil is willing to meet aggressiveness in trade competititon with a bit of aggressiveness of its own.  Refreshing.
ConJur — E o que temos que fazer para ganhar mercados?
Welber Barral — Aumentar a competitividade. No caso da América Latina, há evidentemente um problema cambial, uma desvalorização da moeda chinesa, e uma supervalorização do Real. Mas ao lado disso, temos que melhorar nossa logística, nosso marketing. No caso da África, os chineses são muito agressivos na concessão de financiamentos. A criação do Ex-Im Bank brasileiro [banco de apoio às exportações e importações] vai responder um pouco a essa demanda.
Conjure - And what we have to do to win markets?
Barral - Increase competitiveness. In the case of Latin America, there is obviously an issue currency, a devaluation of Chinese currency, and an overvaluation of the Real. But beside that, we have to improve our logistics, our marketing. In the case of Africa, the Chinese are very aggressive in granting loans. The creation of Brazilian Ex-Im Bank [bank to support exports and imports] will respond to this demand somewhat. 

But bureaucratization, emulation and internationalization is not enough.  Barral returns to the problem of cultural impediments to development, cultural impediments that find expression not merely in the organization of the state but in the attitude of the masses to law and bureaucratic rules. 
ConJur — Se a burocratização é uma resposta ao descumprimento das regras, o que é preciso fazer para que elas passem a ser seguidas?
Welber Barral — Se as normas são impostas, haverá baixo grau de cumprimento. Algo que é pouco considerado no Brasil é a ideia do convencimento da opinião pública quanto à relevância das normas. Uma das dificuldades é a desigualdade, já que em sociedades desiguais, via de regra, existem problemas de descumprimento de normas. Na medida em que há o sentimento da não efetividade da norma em relação a determinado grupo social, esse grupo tende a não cumprir as normas. Por isso, não dá para dizer que crescimento é só aumento do PIB. É preciso pensar também na esfera social, desde a educação até o desenvolvimento democrático, para que as normas tenham legitimidade.
Conjure - If bureaucratization is a response to the breach of rules, what is required to enhance rule compliance?
Barral - If standards are imposed, there will be a low degree of compliance. Something that is rarely considered in Brazil is the idea of convincing the public about the relevance of standards. One difficulty is that of inequality, as in unequal societies, in general, there are problems of noncompliance with standards. Insofar as there is no feeling of effectiveness of the provision in respect of a particular social group, this group tends not to meet standards. Therefore, one can not say that growth is only increasing GDP. We must also think of the social sphere, from education to democratic development, so that rules have legitimacy.

Barral sees a significant role for the judiciary in the process of development.  Jusrt as it contributed toi impeding development by the consequences of its culture, so might it contribute toward efficiency by changing its culture.  This, of course, is a major task, and one that may not be solely for the state to undertake.
ConJur — Como o Judiciário pode trabalhar diante da demanda por desenvolvimento e crescimento econômico?
Welber Barral — Temos feito alguns eventos em tribunais sobre direito de desenvolvimento, discutindo sobre o assunto com operadores do Direito. Já fizemos no Rio e em Curitiba, e vamos ter um grande em São Paulo em setembro. Nos reunimos na OAB ou no tribunal, mostrando que o Direito tem um efeito econômico. A aplicação e a construção do Direito tem efeito econômico, e esse efeito pode ser muito negativo, para o que nós temos tentado chamar a atenção dos juízes. A análise econômica do Direito trabalha muito bem isso, tentando mostrar que muitas vezes um juiz bem intencionado, que tenta fazer justiça em um caso concreto, causa um dano a toda sociedade.
Conjure - How can the Judiciary work to promote development and economic growth?
Barral - We've done some events in courts on right to development, discussing the matter with operators of the law. We have already made in Rio and Curitiba, and we will have a major in Sao Paulo in September. We met with OAB or in court, showing that the law has an economic effect. The application and construction of the law has economic effect, and this effect can be very negative, to what we have tried to draw the attention of judges. The economic analysis of law that works very well, often trying to show that a well-intentioned judge, who tries to do justice in a case, cause harm to society.

Barral exposes several important foundational aspects to Brazilian policy.  First is the importance, for this generation of Brazilian leaders, of the period of dictatorship of the mid 20th century.  Just as the American Revolution was a germinal event that shaped both the political culture and the institutions of the state for the generation that emerged victorious after 1783, so the period of Brazilian military dictatorship has become the foundational event for Brazilian political culture and institutional culture in Brazil.  Foreigners dismiss the importance of this period for the current Brazilian leadership at their peril.  The dictatorship remains both the key to understanding modern Brazil, and the specter that continues to haunt its elites—its ghost influencing everything from the construction of state institutions to the ways in which Brazil engages with other countries and in the international community.  Reform is measured against Dictatorial Period institutions and sensibilities.  Bureaucracies are marshaled to prevent another dictatorship.  Public policy is directed to avoid the creation of conditions that might make dictatorship more likely.  Overseas, Brazil is sensitive to avoid policies that would create incentives to permit the rise of Brazilian style dictatorships (or worse) in other states.  But the memory of dictatorship also shackles the state.  Fear of dictatorship creates approaches to bureaucratization that may hobble the state as much as it prevents a slide toward authoritarianism.  It also produces a certain timidity and risk avoidance.  The fear of embracing policies that has the appearance of echoing those of the dictatorship may produce a reluctance to consider policies that may be of benefit to reform and development.  

Second, the aggregation of political, social and cultural discourse in the construction of development policies and reform has produced a potentially powerful framework for increasing the pace the forward moving reform. Rule of law projects involve must combine the formalism of law-state structures and the functionalism of mass mobilization to deepen cultural and social norms that make rule-of-law behaviors self-enforcing.  Brazilians now understand that form without function provides the sort of empty gesture that was the hallmark of old authoritarian regimes—from Stalinist Russia to (ironically enough) the Brazilian dictators.  Cultural education, combined with the foundational effect of the Dictatorship on Brazilian political, social and cultural sensibilities, has deepened the resolve to use law and culture instrumentally.  The key here is the importance of the cultural element in development.  No longer merely an obsession with production and output measures detached from the realities of social life, development is understood in a more holistic way, the measure of which becomes more complicated.  Free market fundamentalism, then, serves as a single factor, rather than the entire measure, of the realities of development.  Barral suggests the possibilities of blending conventional “law and economics” approaches to the construction of state institutions and the judicial function (opinions grounded in the realities of their consequences) with social justice theories that privileges policy options with the objective of ameliorating social, cultural and economic inequality.   This was once a view common to political elites in the United States and now substantially abandoned in the United States in favor of ideological stances divorced form reality.  Today, it seems, that these views have found a new and fresh expression within the more muscular approach of the Brazilians to development.

Third, Brazil has chosen engagement rather than isolationism as the road to development and economic growth.  Brazil’s framework for engagement reminds us of the failures of a set of theories of economic development that contributed to the ruin of postcolonial Africa and Asia, and disrupted the economies of Latin America.  Brazil also reminds us that the ideology of the state—in essence that territorial borders can almost magically mark the limits not only of political self sufficient communities but economically self sufficient communities as well—has not worked. Brazilian policies seek a development that focuses on national strengths but also strategically seeks combination with other states.   The state thus stands as a gateway, and as the organizing force of economic life, the focus of which can be guided by public policy but not ordered by it. Barral understands that the state must support, but must also get out of the way.  Barral reminds us that states do not have a monopoly on creativity or innovation in public policy or private activity.  Rather than focus on a single role for the state, Barral points to the “new normal” for states now joining the group of most advanced states—that “normal” combines bureaucratization, emulation and internationalization mark the contours of Brazilian internal and external economic policy.

Obviously, this paints a very optimistic picture.  The Brazilian project is far form complete.  Brazil may not have the national will to see many of these projects through.  A powerful inherent social and cultural inertia and interests of powerful forces in Brazil may derail this vision.  The temptations of hypocrisy in foreign policy is also difficult to avoid--just as Brazil condemned the sanctions policies by the United States against Iran and Cuba, in large part because sanctions do not work, it enthusiastically embraced the use of sanctions in Latin America against states that violate core democratic values (except, perhaps for Venezuela, which tends to get a pass on determinations of this sort).  See  James Suggett, UNASUR Summit Ratifies Commitment to Constitutional Democracy, Rejects Coups,, Nov. 29, 2010 (""According to the agreement, signed by the foreign ministers of the nine UNASUR nations, the regional integration bloc may respond to coups d’état and other threats to constitutional democracy with economic sanctions, the closing of borders, and suspension of membership in the bloc.).  And ultimately it is not clear that the vision Barral reflects is shared strongly enough to be sustained over the term necessary to see its objectives met.  But that a powerful state can express itself in this way, can build an image of itself and its national project in these terms ought to make Americans wince for the way in which it shows our own movement from a similar stance not so long ago.  Barral expresses a new Brazilian optimism and pragmatism that more clearly shows the extent of American pessimism and our slippage into the narcotic effects of ideological stances.  In a strange twist, it appears that Brazil is playing the role that the United States once embraced after the Second World War, and has relegated the role of mere ideologue to the United States.  That does not bode well for the United States in its economic or its political relations abroad. But it also suggests the thrust of the position that the United States will confront and that it might consider as the global governance framework is reworked around it. It will be interesting to see how Americans react to the recognition in Brazil of a younger and more optimistic version of ourselves. 

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