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Brazil Accuses US of Lying to the WTO on Amount of Farm Subsidies It Grants

The price of suspending the negotiations of the Doha Round in the World Trade Organization (WTO) and consequently maintaining the current levels of world agricultural subsidies is going to be dear for Brazil: US$ 10 billion.

According with the calculations made by the Brazilian National Confederation of Agriculture and Livestock (CNA), Brazilian agribusiness will not earn this much per year due to the subsidies.

The annual WTO report for the year of 2006, released yesterday, July 24, states that the world governments direct per year US$ 1 trillion in subsidies, of which about 40% go to agriculture.

In spite of the report admitting that the subsidies cause distortions in the world market, the organization and the member countries weren’t able to advance in the negotiations to reduce them in the meeting of the Doha Round, which took place during the weekend in Geneva.

"This indicates that the subsidies will continue, they won’t be reduced," says the technical advisor of the National Committee of Foreign Trade at the CNA, Antônio Donizete Beraldo.

"The developing countries are the ones that will suffer the most," adds the secretary-general at the Arab Brazilian Chamber of Commerce, Michel Alaby. According to Beraldo, Brazil won’t win in a sector in which it is extremely competitive.

Beraldo mentions that the ones to suffer greatest damages are the beef, sugar, ethanol, rice, cotton and soy producers. Should there be an agreement at the WTO on the world agricultural market, Brazil could export US$ 53 billion per year, according to the technical advisor at the CNA.

Currently, Brazilian agribusiness earns about US$ 43 billion with exports. "We cannot grow as we don’t have someone to sell to," states Beraldo.

The interruption of the Doha Round, according to him, caused a crisis at the WTO. The secretary-general at the Arab Chamber states that there was lack of command in the organization.

"It was expected that the WTO could at least reach a minimum agreement to benefit the developing countries, but what we saw was failure. I fear that the WTO is burying itself alone," says Alaby. The country that compromised the agreement the most, according to the secretary-general, was France.

The Doha Round is trying to establish new rules for three areas: access to markets, domestic support and subsidies to exports. In the discussion on access to markets, the countries weren’t able to reach a consensus on the foreign tariff on agricultural products trade.

While the European Union suggested a reduction in 39%, the G-20, group of developing agricultural countries of which Brazil is a member, suggested 54% and the United States 66%.

The reduction would be applied on the values of the tariffs each country has registered at the WTO as their current tariff. In practical terms, however, it doesn’t quite work out that way, as many countries have registered in the organization tariffs that are higher than what they practice, so that in the case of a reduction, they won’t be at a loss.

Domestic support is the value each government directs to their farmers, which is made on a large scale by the United States. The North American country’s suggestion at the WTO would be to reduce this support from US$ 47.4 billion to US$ 22.4 billion.

But according to Beraldo, this doesn’t really mean a reduction since the United States registered at the organization a value a lot higher than the support they give out in fact. Today the country directs US$ 21.4 billion in subsidies to the farmers, which makes the reduction suggested null.

In the field of subsidies to exports things didn’t progress either. With the interruption of negotiations, the date set for ending the practice – the year of 2013 – was also disregarded.

Anba – www.anba.com.br

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  • Show Comments (1)

  • ch.c.

    You Cannot Grow…..??????
    The EU is ALREADY buying buying 33 % of all your agriculture exports. How much would you like ? Thus we also want 33 % of your Industrial, Financial and Services Industries…….because we cannot grow ! smile.

    Quite stupid statements from Brazilians : There are over 5 billions people outside the U.S.A, the EU and Japan !!!!!! You may as well try to sell them more than the actual very little share !

    And feeding FIRST your tens of millions of under nourrished citizens, instead of just willing to export what your produce, would be a good idea too….in my view !!!!!

    Curiously enough, in the article there is NOT 1 WORD CONCERNING THE OTHER INDUSTRIES FOR WHICH YOUR COUNTRY IS….SO CLOSED AND RESTRICTIVE!

    Finally in the US$ 1 trillion the world is subsidizing annually, Brazil is included !
    Are you not re-negotiating your farmer debts……these days ????? Under what term ?
    SUBSIDIZESSSSS !
    And Brazil subsidizes ALL export industries and not only the agriculture as the USA and the EU do !!!!

    And by saying you cannot grow, you cannot count ONLY on external demand. Internal demand is more important. And you completely failed. Because despite your continuing export growth (proof you still grow – despite what Beraldo says) your GDP grew only 2,3 % in 2005 due to the lack of determination to increase your Internal growth.

    You are simply failing, lying, hiding the truth and cheating lamentably, and your arguments are not worth 1 centavo

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