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By Reducing Surplus, Brazil Wants To Help Argentina Avoid Economic Meltdown

Folha d S. Paulo has uncovered documents showing that Brazil wants to give its struggling neighbor a break on trade deals. It's a sign of how deep are Brazilian fears about Argentina's economic health.

Crossing from Los Ebanos, Texas to Ciudad Diaz Ordaz, Mexico
Argentina-Brazil border (seretide)
John W. Schulze
Natuza Nery and Lucas Ferraz

BRASĂŤLIA - Argentina is Brazil's third largest trade partner, but the neighboring country is currently facing capital flight, high inflation and a major slowdown of its industry. If the state of economy deteriorates further, some sectors, such as the automotive, textile and food industry, will suffer the consequences -- a situation Dilma Rousseff's government wants to avoid at all costs.

Folha De S. Paulo has uncovered a decision -- not publicly divulged -- to reduce the Brazilian surplus from R$ 5.8 billion ($2.9 billion) in 2011 to R$ 4 billion ($2 billion). The Brazilian government has accepted the $1 billion reduction in bilateral trade surplus with Argentina to help its troubled neighbor, whose economic woes could potentially spread across the border.

A spokesperson for the Ministry of Development, Industry and Foreign Trade denies the report, but the offer has been presented to the Argentinean side and includes establishing extra-official quotas for Brazilian product exports.

As of today, several items sold to Argentina have trade tarrifs. Non-official quotas would free products from this obstacle, even restricting sales.

In Buenos Aires, the problems faced by President Cristina Kirchner are eroding her popularity. While in BrasĂ­lia, the whistle had already been blown on secret messages sent by Brazilian diplomats, which Folha managed to obtain. In a cable sent last January, the Brazilian embassy in Buenos Aires warns that capital flight will continue until the end of 2012.

Dilma Rousseff is aware that the rise in currency rates in Argentina has resulted in a loss of competitivity, and diminished reserves.

Change of tone

Brazil's decision to reduce its surplus represents a new position in dealing with the Argentinean crisis. At the beginning of the year, ministries were considering retaliating against its neighbor. The change of tone reveals how worried the country is about its trade partner.

Although both economies are closely tied to each other, the Ministry of the Treasury does not think that a currency crisis would have dramatic consequences on Brazil. Tristán Rodríguez, economist at the Center for the Opening and Development of Latin America (CADAL), says the slowdown in Brazilian industry affects Argentina more than the other way around.

Read the original article in Portuguese

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FOCUS: Russia-Ukraine War

Black Sea Survivor: Tale Of A Ukrainian Special Agent Thrown Overboard In Enemy Waters

This is a tale of a Ukrainian special forces operator who wound up surviving 14 hours at sea, staying afloat and dodging Russian air and sea patrols.

Black Sea Survivor: Tale Of A Ukrainian Special Agent Thrown Overboard In Enemy Waters

Looking at the Black Sea in Odessa, Ukraine.

Rustem Khalilov and Roksana Kasumova

KYIV — During a covert operation in the Black Sea, a Ukrainian special agent was thrown overboard and spent the next 14 hours alone at sea, surrounded by enemy forces.

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The agent, who uses the call-sign "Conan," agreed to speak to Ukrainska Pravda, to share the details of nearly being lost forever at sea. He also shared some background on how he arrived in the Ukrainian special forces. Having grown up in a village in a rural territory of Ukraine, Conan describes himself as "a simple guy."

He'd worked in law enforcement, personal security and had a job as a fitness trainer when Russia launched its full-scale invasion on Feb. 24, 2022. That's when he signed up with the Ukrainian Armed Forces, Main Directorate of Intelligence "Artan" battalion. It was nearly 18 months into his service, when Conan faced the most harrowing experience of the war. Here's his first-hand account:

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