Brazil Readying Plan to Open Services Market to Foreigners

Brazil will conclude, until May 30th, the proposal in the services sector it will present to the World Trade Organization (WTO).

According to Ambassador Luiz Felipe de Seixas Corrêa, head of the Brazilian delegation in Geneva, the Brazilian proposal concentrates on the opening of the internal market in the areas of construction, tourism, and temporary entry of professional workers.


“Our offers tend to concentrate in these areas, in which we are more competitive. If a construction company comes to work in Brazil, it will have to compete with extremely competent people,” said Corrêa at the Doha Round Seminary, promoted by Brazil’s Chamber of Deputies’ Commission of Foreign Relations and National Defense, yesterday.


In the panel “The Impacts of Service Trade Liberalization in the Brazilian Economy,” he talked about the Brazilian situation in the round.


According to the Ambassador, Brazil is ahead in the definition of the services proposal terms, and will respect the maximum established deadline for improvement of proposals presented in the Uruguay Round, negotiation agreement for trade sectors that ended in 1994.


The Ambassador estimates that more than half of the 148 Member Countries of the WTO are late in their proposals definition. By being on schedule, Brazil could establish an advantageous position for negotiations.


Corrêa defended a more conservative position in areas such as telecommunications, in which Brazil depends on foreign investments, and the finance sector.


“We are competitive in finance services, but so is the United States. So, in these cases, our offer must be cautious due to market’s capacity to benefit from competition,” explained.


For the Ambassador, service or sector liberalization is only interesting if it improves competitiveness of that service/sector within the country, if it generates offerings of more quality and less expensive products for the end consumer.


The representative of the Department of International Trade of the World Bank, Carlos Alberto Primo Braga, said that the services sector will have a strong influence on the future of the economy in the planet, due to its participation on the world Gross Domestic Product (GDP), which is 44%.


He emphasized, however, that World Bank studies about the impact of the Doha Round on poverty reduction demonstrate that the major contribution of the negotiations must come from the agriculture chapter.


Agriculture, an area responsible for 10% of the world GDP, is precisely where strongest protectionism is being practiced.


High subsidies are given by some countries to their internal production and exporters, while equally high are the tariffs charged for countries, such as Brazil, to export to large markets such as the European Union (EU) and the United States (US).


Brazilian sugar, for example, is tariffed at 150% when it goes to the EU, alcohol at 50%, and poultry at 110%.


“It is said that there is a direct relation between good offered services and a country’s development. But this does not reflect on poverty reduction,” he said.


Agência Brasil

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