Brazil raises hopes of Doha deal next year (Financial Times, 19.03.2004)

Guy de Jonquières

Brazil, leader of the Group of 20 developing countries pressing for farm trade reforms, yesterday voiced cautious optimism that a deal could be reached this summer that would enable the Doha global trade talks to be concluded next year. Celso Amorim, Foreign Minister, said in an interview with the FT that he was encouraged by signs that the US was becoming more flexible about cutting its domestic farm support and that the European Union could be persuaded to eliminate its agricultural export subsidies. He said Pascal Lamy, the EU trade commissioner, had already signaled he was ready to agree to end such subsidies, and the challenge now was to get Brussels to do so “without actually saying so”.

Mr. Amorim indicated that the G-20, formed just before last September’s failed World Trade Organization meeting in Cancún, Mexico, was prepared to soften its demands that Japan and other agricultural protectionists open their markets if a deal was reached on subsidies. “I see a way forward. You don’t have to be a maximalist on all pillars, provided you get the most substantive things,” he said. However, if Japan refused to open its agricultural market, it should compensate its trade partners with concessions in other areas. Mr. Amorim said it was “not impossible” for WTO members to agree a broad negotiating framework for the Doha talks by July “and then finish after the American elections. Not immediately – in six months’ time or something.” He was not worried by the protectionist rhetoric surfacing during the US presidential election campaign, saying  history showed sitting presidents were more positive than candidates about trade. However, he expressed concern about waning enthusiasm in Congress for new trade deals. It was likely Congress would reject an agreement on a Free Trade Area of the Americas (FTAA), even if Brazil accepted all the US negotiating demands and dropped its own.

The Brazilian Minister criticized Washington’s approach to the troubled FTAA talks, saying it was resisting pressure to remove its own trade barriers, which kept its market closed to every product of interest to Brazil. “The FTAAis not really about free trade. If you concentrate on free trade, we are bigger free traders than the US”, he said. Nonetheless, he believed an agreement would still be worthwhile, although “I do not believe we can get much [from the US]”.

In contrast to Brazil’s difficulties with the US in the FTAA talks, Mr. Amorim said “a lot of progress” had been made in talks on a bilateral trade agreement between the EU and the four-nation MERCOSUR customs union, led by Brazil. Nonetheless, both sides needed to recognize that an eventual agreement would not contain everything they wanted and its terms would be “to some extent limited”.

Mr. Amorim insisted the G-20 would remain a pivotal force in world trade talks. He believed its membership, which at one point fell to only 14, would increase from 19 currently to as many as 24 as WTO negotiations became more serious. He also said Brazil and India were close to concluding the first stage of a bilateral trade agreement that would be a stepping stone towards an eventual free trade area that would also include SouthAfrica. The European Union wants an agreement to help take the Doha talks forward, but is afraid of being the only one to cut its handouts for farm exports, Reuters reports from Brussels.