For Brazil’s Lula, US, EU and Poor Are All in the Way of Global Trade Pact

Bush and Lula shake hands in São Paulo, Brazil The presidents of Brazil, Luiz Inácio Lula da Silva, and of the United States, George W. Bush, made a political commitment to try and resume negotiations for the Doha Round of the World Trade Organization (WTO), aimed at establishing a global trade agreement. Negotiations are nearly paralyzed since July last year.

The commitment happened at a meeting held in the southeastern Brazilian city of São Paulo on Friday, March 9.

"Our challenge is to turn trade into a tool for development, and for this to happen, the existing inequalities and asymmetries in global trade must be eliminated. I am certain that we are closer than ever to the end of the Doha Round," Lula told the press at the Hilton hotel, in the capital of São Paulo.

"If we manage to work together in the WTO, then the rest of the world will also be able to work together. This is why our discussion is of vital importance," Bush claimed.

Bush and Lula made a commitment of exerting pressure on negotiators from each country in order to reach a common denominator as soon as possible.

"We are going to lock our ministers in a room until they reach an agreement," the president of the United States joked.

"I think we are moving steadily towards the 'G' spot, which means reaching an agreement. Should Brazil and the United States reach a balance point, then we will be able to make our proposal to the remaining countries," Lula said.

The two presidents agree that the political will of their countries might influence the others. "In addition to convincing wealthy countries, we will also have to convince the poor ones," Lula claimed.

"But we are accepting this challenge, because success of the Doha Round at this moment is not an economic issue, it is a political problem. It will determine whether we have the competence required to build a better future for the millions of people who depend on this agreement," he said.

Lula highlighted that the main obstacles to the conclusion of the Doha Round are resistance from the European Union to opening its agricultural market, resistance from the United States to reducing government subsidies to rural producers, and resistance from developing countries to further opening their markets for services and industrial products.

"No country wants to make the first new offer, because once you lay your card on the table, you cannot take it back. But we are willing, and we are going to lay our cards on the table to see if we can reach an agreement," said the president of Brazil.

Both presidents also agreed that liberalization of global trade is one of the best ways of promoting development in poorer countries. "The best possible plan for fighting poverty is promoting trade. It will require a lot of work, but concessions must be made so that all sides come out as winners in the negotiation," Bush declared.

In addition to fairer foreign trade, Lula said that Brazil and the United States must create joint projects with the objective of generating opportunities for development in poorer countries. "Together, the United States and Brazil can devise projects so that poorer countries do not regard the wealthier ones simply as exploiters," he said.

To that extent, Bush highlighted the importance of a partnership with Brazil. "President Lula enjoys widespread respect abroad, he speaks with clarity and people listen to him. We have great concern regarding Africa, and we discussed joint projects such as a joint venture between Brazil and the United States," Bush stated.

In this field, the most concrete measure up to date is the memorandum of understanding signed by the two governments this morning, addressing cooperation in the biofuels sector.

"A way of promoting development in other countries is to foster their ethanol and biodiesel industries," said the president of the United States. The two countries intend to do joint research and to promote the sector in other nations of the American continent. "We are proud of having contributed to the United States' decision of incorporating biofuels into their energy matrix," Lula stated.

The tariffs imposed by the United States on Brazilian ethanol imports, though, will not see a decrease in the short run. Bush declared that this decision is up to the Congress of the United States, and that the law imposing the tariffs will only expire in 2009.

"If I had the necessary skills to persuade president Bush to remove the tariffs, he would have already granted so many other things I cannot even mention here," Lula quipped. In the United States market, Brazilian exporters pay a 2.5% tax plus US$ 0.54 per gallon (the equivalent of 3.785 liters).

To Lula, this process of negotiation is going to last long. "I don't believe that a country will relinquish its trade protection just because another country is asking for it, this is a process that needs maturing," he said.

Lula also told Bush that all South American governments are the result of free elections, and that all are engaged in the development of the region. Lula and Bush will meet again late this month in the United States.

The two presidents were relaxed as they talked to the press. Earlier in the day, they had lunch with Brazilian ministers Celso Amorim (Foreign Relations), Luiz Fernando Furlan (Development, Industry and Foreign Trade), Silas Rondeau (Mines and Energy), the governor of the state of São Paulo, José Serra, the press secretary for the government, André Singer, and the president's assistant for foreign affairs, Marco Aurélio Garcia.

Serra said that conversations were positive with regard to promoting the creation of a global ethanol market, but claimed that he was sorry that the tariffs were maintained. The state of São Paulo is the foremost alcohol producer in Brazil.

On the American side, in attendance were the secretary of state of the United States, Condoleezza Rice, the Chief of Staff for president Bush, Joshua Bolten, the trade representative for the United States, Susan Schwab, the press secretary of the United States, Tony Snow, and other officials.

For lunch, they had vegetable salad with saffron sauce and pink shrimps, followed by filet with pepper sauce, champignon ratatuie and crisp potato tortillas. For dessert, they had coconut daquoise, passion fruit and mango mousse. Wines of the Brazilian Salton brand were served.

Anba – www.anba.com.br

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