Brazil heads for WTO milestone.

BRASILIA: Among the 30-plus ministers who will sit down at a meeting in Geneva next week to try to advance global trade talks, Brazilian Foreign Minister Celso Amorim is in a particular bind.

He has already spent a lot of political capital on the so-called Doha round of negotiations, trying to forge a common front among developing nations to push for freer farm trade over nearly seven years.

But at home, domestic lobbies are pushing Amorim in the opposite direction at the negotiating table.

A deal in the talks that began in 2001 could consolidate Brazil's credentials as a leader among developing nations and an emerging diplomatic power. Much of the credit for that would go to Amorim. If the talks fail, however, the risks of a trade policy focused almost exclusively on Doha would be exposed and could diminish Brazil's international clout.

"There is a lot at stake for Brazil. It would be the only big trade deal we have to show for in years," said Sao Paulo Industry Federation director Mario Marconini.

As one of the world's largest agricultural exporters, Brazil has much to gain in a round that set out to slash farm trade barriers and subsidies. But Brazilian diplomats say rich nations offered less than expected, raising the possibility that Brazil could come up with little to show after years of hands-on diplomacy.

"If the rich countries make a large contribution, we can be optimistic," Brazil's chief trade negotiator Roberto Azevedo said referring to the Geneva meeting.

Brazil has a long list of demands, including lower farm subsidies overall and on select commodities, as well as a ceiling on farm tariffs.

"I don't know where to start, there's much to be improved," said Azevedo.

Critics say Brazil has scaled back some of its original proposals due to lobbying by international allies and its own industry, which is wary of cutting tariffs that now are around 10 per cent on manufactured products.

"We want a more ambitious proposal, with less protectionism," said National Agriculture Confederation international trade head Gilman Viana Rodrigues.

The government of President Luiz Inacio Lula da Silva, a former factory worker, watered down lofty proposals for freer farm trade to accommodate allies like India, which is eager to protect millions of small farmers, experts say.

"We've lowered the bar. Brazil is negotiating not to generate more trade but to hold up a Doha deal like a political trophy," said Foreign Trade Association of Brazil director Jose Augusto de Castro.

"This solidarity with developing nations is a risky policy."

Even if the talks flop, Brazil will have helped reshape the balance of power in setting global trade rules by ending the hegemony Europe and the US had in previous rounds.

But at home, it will have few trade deals to show. Recent agreements with India and South Africa, critics say, are full of exemptions and generate little new trade.

Brazilian business leaders have urged the government to focus more on achievable bilateral deals. Farmers and manufacturers have done well without a global trade accord and exports are expected to reach $180 billion this year from $73bn five years ago.

But barriers on goods and services, including government procurement, still hide gross inefficiencies in the public and private sectors. Due mostly to taxes and tariffs, a car in Brazil costs roughly twice as much as in the US.

"In Brazil, consumers would be the biggest losers, if talks fail," said Rodrigues.

Copyright A[umlaut] 2008 Gulf Daily News

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