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Brazil’s Unions Back
New Government,
But Reserve
The Right to Criticize


From right to left, UE’s Robin Alexander, Brazilian President Lula, Hector de la Cueva of the Mexican Action Network Against Free Trade (RAMLC) and Teofilo Ryes of the Transnational Information Exchange.

Working people who began building a labor movement 20 years ago under a dictatorship are proud that the machinist who led their early strikes is today their nation’s chief executive. Last year’s election of Luiz Inacio Lula da Silva as president of Brazil gave special significance to the convention last month of the country’s principal union federation.

The Unitary Labor Confederation (or CUT, to give its Portuguese initials) is the fifth largest union federation in the world. That’s important because Brazil is the largest, most populous country in South America. General Electric is among the many powerful transnational corporations and UE employers with factories in Brazil.

The CUT congress June 3-7 brought together more than 2,500 delegates and a large international delegation from 26 countries to celebrate the federation’s twentieth anniversary. The congress also confronted a new and unique challenge: the relationship between the labor federation and the new government. The country’s economic difficulties guarantee that relationship will be neither simple nor easy.


Lula inherited an economy in shambles. Working people suffered as the former government carried out neoliberal policies, including privatization and cutbacks in social programs. Two million people are unemployed in Sao Paolo alone, the most industrialized region in Brazil, with 1.5 million young people entering the labor force each year.

Lula’s government decided to continue neoliberal monetary policies to reassure business and encourage investment. The results have helped regain economic stability: the value of bonds has increased from 38 to 90 percent of their face value, meaning that far less is spent on public debt. Banks lowered Brazil’s risk assessment. Credit lines are back and new lines of credit are open.

But these results reflect decisions by the government to maintain high interest rates and prioritize growth over income distribution — at least in the short run. At the time of the CUT congress, the new government’s most controversial proposal aimed at cutting retirement payments to higher-paid public employees, averting bankruptcy of the system and moving towards an equalization of public and private benefits. This is essentially a proposal from the old government.


Debate at the CUT congress was fierce. Speaker after speaker delivered fiery speeches, resulting in catcalls, cheers and often loud chants from the other delegates. It was a vibrant exercise of democracy, where physical violence was prohibited, but controversy was intense. Often the disputes were hot, occasionally forcing the moderators to insist that speakers be permitted to be heard and that opposing views would also be given time.

Delegates representing far-left political tendencies argued forcefully that the CUT should take a position against the Lula government – that it had betrayed workers by proposing cuts to social security, by maintaining interest rates at levels higher than even the IMF required, by participating in negotiations on the FTAA, among other issues. One impassioned speaker pointed out that the reform proposal was making workers fight against each other, another called it "a reform by the bankers at the demand of the IMF," and many argued that equalization of benefits should be accomplished by increasing levels, not through cutbacks.

The stronger position, eventually backed by a large margin, insisted that the CUT should support the government it had worked so hard to elect, but that it must maintain its autonomy. That posture raises a whole range of challenging questions about what autonomy means when the government takes a stand that the CUT opposes.

At least the response to the attack on social security benefits is clear: although the CUT supports the Lula government, it does not agree with the reform proposal. The CUT will propose a series of amendments (which were spelled out in detail), and will organize major mobilizations in opposition. (On June 11, 20,000 workers demonstrated outside the Brazilian Congress to demand inclusion of their proposals.)

Many speakers at the congress spoke of the need to provide leadership in a changing situation, in response to Lula’s election but also to the damage caused by neoliberalism both in Brazil and throughout the world.


The discussion reflected a sophisticated analysis of the situation in Brazil and the meaning of Lula’s overwhelming victory. One speaker referred to Lula’s election as "The most beautiful moment that gave us the possibility of governing." However, the complexity of governing became increasingly clear, as we came to realize that winning the presidency does not necessarily bring the power to fully implement a progressive program. That will take the additional strength that must be built over time.

At this congress, the CUT approved a broad plan which includes the defense of rights, a wage campaign calling for reduced hours without reduction in pay, reform of the labor laws to prevent government intervention in unions and the right of workers to join the union of their choice, and a massive movement in the streets to guarantee rights, and to oppose the evils of neoliberalism – outsourcing and downsizing. Delegates condemned the FTAA and called for a binding referendum.

The CUT is committed to dealing with the consequences of slavery and the exclusion of women, creating a new national secretariat for women with a seat on the executive board, and raising the issue of international sexual tourism.


Lula met with the international delegates over lunch on the opening day of the congress, and outlined how he sees the challenges ahead.

Lula took office without majority support in Congress, with only three states governed by the Workers’ Party (PT). A priority for his government is a strengthened PT and alliances which permit the passage of PT-promoted legislation. Lula explained that one way in which he is seeking to create consensus over difficult questions is through the open discussions in councils which have been convened on various subjects.

"Many ministers come from labor and the social movements, and our idea is to build a space in which discussion can occur... and through discussion we can find a middle ground. The labor movement has experience that not everything will be done in one day." He spoke of the reforms which were needed, in the areas of "social security, taxation, labor, political and land reform... as many as necessary to modernize our country....labor law is a long time demand; the current structure is not good for our country."

Lula explained that Brazil is actively strengthening relationships with the countries in the southern part of South America, with other countries in Latin America, and with countries throughout the world. He told us of recent meetings with the leaders of India, South Africa and China, now Brazil’s second largest trading partner. He also emphasized that when he traveled to other countries he would be meeting not just with representatives of government but with labor leaders as well.

And Lula is using his position to show leadership on both social and political questions, initiating the Zero Hunger campaign, making hunger and poverty central issues, initiating the formation of Friends of Venezuela to resolve the conflict there, taking a strong position against U.S. invasion of Iraq, focusing attention on Africa, and the obligation of wealthier countries to contribute to the development of poorer ones.

One of the most controversial issues facing the government are the negotiations on the Free Trade Area of the Americas (FTAA). Of the more than 10 million Brazilians who participated in an informal referendum last fall, 98.33 percent maintained that Brazil should not join the FTAA. Nevertheless, Lula has clearly stated that he intends to be at the table, raising the issues of concern to Brazil. He has pledged not negotiate away Brazil’s sovereignty.

In remarks to the CUT congress, designed to reassure his supporters, Lula declared, "I have not changed one millimeter." The CUT responded by overwhelmingly voicing its support for the president who comes from their ranks. But instead of simply taking him at his word, it has also chosen the path of autonomy, so that it is free to fight for the rights of working people when the government is pressed to compromise. In doing so, it will help to ensure that Lula does not change.

(Robin Alexander, UE’s international labor affairs director, attended the CUT congress.)

UE News - 7/03

Home -> UE News -> 2003 Archives -> Article

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