Brazil Hails WTO Agreement

Brazil is celebrating the results of the just-concluded Geneva
World Trade Organization talks. Brazilians are pleased that the
rich nations will eliminate agricultural export subsidies. The WTO
document, however, does not determine when the elimination
of subsidies will commence, nor how it will be implemented.

Carolina Pimentel

The Brazilian government was pleased with the results of the World Trade Organization (WTO) meeting that ended this weekend in Geneva, Switzerland.

Brazil and other developing countries achieved a major victory over the rich nations: the inclusion of an agreement to eliminate agricultural export subsidies in the document approved by the 147 countries that belong to the WTO. The text contains guidelines for the liberalization of global trade.

"As the Minister of Foreign Relations, Celso Amorim, said himself, the agreement is the beginning of the end to subsidies," emphasized the head of the Brazilian delegation in Geneva, Ambassador Luiz Felipe de Seixas Corrêa. The meeting in Switzerland was part of the Doha Round, initiated in Qatar in 2001.

Seixas Corrêa said that Brazil played an essential role in negotiations with the wealthier countries, such as the United States and the European Union, to reach a compromise.

The WTO document does not determine when the elimination of subsidies will commence, nor how it will be implemented. Negotiations over these items are expected to begin immediately.

The agreement envisions a reduction in domestic subsidies granted by countries to their rural producers, another point considered positive by the Brazilian delegation.

"The European Union, the United States, and Japan distort international trade by the use of subsidies for their products," Seixas Corrêa observed.

In his opinion, the meeting in Geneva obtained the agreement that was anticipated at the WTO ministerial meeting in Cancun, Mexico, in 2003. That meeting failed, when it tried to reach an understanding between poor and rich nations over agricultural subsidies.

At the time, Brazil and India led in the creation of the G-20, a group made up of 20 developing countries and established to defend a reduction in the assistance that the rich countries provide their farmers.

Regarding the service sector, Seixas Corrêa informed that the procedure approved at the meeting does not entail additional burdens for Brazil, and he pointed out that, in the area of industrial goods, the agreement that was concluded is not as effective as the one in the agricultural area. "Our interests were served in this phase," he underscored.

According to the head of the Brazilian delegation, the initial projection was for a definitive agreement on the opening of world trade to be ready at the end of this year.

According to him, this date became "unrealistic" after the failure of the meeting in Cancun. The goal now is to achieve the agreement by the end of 2005, when the member countries of the WTO will gather again, in Hong Kong.

IMF

On July 30, the International Monetary Fund mission visiting Brazil for a third revision of the almost US$ 15 billion preventive loan Brazil negotiated at the end of last year concluded its work.

The head of the mission, Charles Collyns, has said he will recommend approval. That will give Brazil the right to withdraw funds totaling US$ 1.3 billion.

However, both President Luiz Inácio Lula da Silva and the Minister of Finance, Antonio Palocci, have said the country will not touch the money. They have also said that Brazil does not intend to renew the agreement when it expires in 2005.

Carolina Pimentel works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated from the Portuguese by David Silberstein.