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Open Your Markets and We Will Reduce Farm Subsidies, Bush Tells Brazil

Presidents Lula and Bush from Brazil and US in Camp David

Presidents Lula and Bush from Brazil and US in Camp David The United States and Brazil are committed to securing an agreement on the World Trade Organization's (WTO) Doha Development Agenda that is ambitious and balanced, encourages greater market access and trade, and reduces poverty, the leaders of both countries say.

The WTO talks on free trade between countries of varying prosperity, also known as the Doha round, were launched in Qatar's capital of Doha in 2001. Contention among WTO countries on opening markets and cutting agricultural subsidies has hindered progress on the talks.

"It is in our interest to work together to make sure that we have a deal that treats Brazil fairly, the United States fairly, as well as other nations fairly," Bush said after meeting with Brazilian President Luiz Inácio Lula da Silva March 31.

The United States is "willing to reduce our agricultural subsidies in a substantial way," but "we expect our goods and services – whether they be agricultural goods or manufactured goods … to be given access to markets," he continued.

Bush stressed the importance of achieving a global trade agreement. "I strongly believe that the best way to help alleviate world poverty is through trade," he said. "It's not the only way, but it is the best start … coupled with health initiatives that we're working on, [and] food initiatives."

During their meeting, Bush and Lula also focused on bilateral trade issues, announcing the creation of a U.S.-Brazil CEO forum and applauding plans by the United States Council on Competitiveness and Brazilian Competitiveness Movement to stage an "Innovation Summit" in Brasí­lia, Brazil, in July 2007.

Biofuels

The presidents also discussed efforts to advance research on and use of alternative fuels such as ethanol. According to a joint statement issued after the leaders' meeting, senior officials of the U.S. Departments of Energy, State and Agriculture will visit Brazil in spring 2007, and the governments intend to arrange for Brazilian researchers and scientists to visit biofuel research laboratories in the United States.

Brazil and the United States also work with Haiti, the Dominican Republic, St. Kitts and Nevis, and El Salvador on biofuel projects, and will continue to consult with other countries.

The biofuels initiative is an important effort to reduce global warming, Bush said.

"One reason you promote alternative fuel is to be better stewards of the environment. Many of the greenhouse gases come from tailpipes of automobiles. And therefore, when you get away from gasoline and start using ethanol or biofuels, you make a significant step toward improving the environment," he told reporters.

Bush also expressed appreciation for Brazil's leadership of the United Nations Stabilization Force in Haiti. He said that the United States wants to work with Brazil to help the force to "be a part of a constructive future" for Haiti.

The presidents said in their joint statement that international action will have to incorporate efforts at political reconciliation and socioeconomic development, in addition to security, to succeed in Haiti.

Bush praised Brazil's "strong commitment to help nations, particularly on the continent of Africa," and said the United States will partner with Brazil to work toward eradicating malaria in São Tomé and Prí­ncipe.

Bush and Lula also agreed to work together to find ways to combat malaria, tuberculosis, avian flu and other diseases, concentrating their efforts in the Portuguese-speaking countries of Angola and Mozambique. The United States and Brazil already have partnered on HIV/AIDS assistance in those countries.

Brazil-Iran Connection

When asked about Brazil's decision to maintain trade relations with Iran, Bush said Brazil "is a sovereign nation" that can make decisions in its best interest. However, he said, the United States "would hope that nations would be very careful in dealing with Iran, particularly since Iran is trying to develop a nuclear weapon."

Bush added that the United States "highly respects the people of Iran," their history and "rich traditions." He noted that the United States recently sent a wrestling team to Iran and is working to increase "people-to-people exchanges" with Iranians.

Bush also said the United States is "deeply concerned about an Iranian government that is in violation of international accords" and said he hopes the people of Iran will grow "tired of the isolation" that has resulted.

Bush also expressed support for British Prime Minister Tony Blair's effort to free the 15 British soldiers captured by Iranian forces March 23.

"The British hostages issue is a serious issue because the Iranians took these people out of Iraqi water. And it's inexcusable behavior," he said.

Carrie Loewenthal is a USINFO Special Correspondent

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  • Show Comments (10)

  • Rohit kapur

    cool
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  • bo

    ch.c
    you’re right about the costs of transportation here in brazil, it’s ridiculous, not to mention unrealiable. Brazils “highway system”, if one can call it that, leaves a lot to be desired.

  • CH.C.

    To Bo !
    You are dead right !
    It will be interesting to find out the war between the developing countries.
    Yesssssss…..would Brazil be free to sell SUGAR TO INDIA AND THAILAND ??????
    Knowing that in India SUGAR production for local consumption and exports…..IS HEAVILY SUBSIDIZED…..i CAN HAVE ONLY DOUBTS THAT INDIA WILL IMPORT SUGAR FROM…..BRAZIL !!!!!!!

    And if Brazil really believes they are world competitive in their grains production, just go and watch the video on Globo Rural :

    In Brazil Northeast, they import grains from ARGENTINA….TO GROW THEIR CHICKEN FARMS !!!!!!!
    WHY ?
    Simply because the transportation costs is Reals 40.- per ton from Argentina, but Reals 230.- per ton…..FROM GOIAS !!!!!!!!!

    Simple demonstration of the INEFFIENCY and LACK of the Brazilian …….INFRASTRUCTURE !!!!!

    This is not ranting as some will accuse me, this is facts, revealed by Brazilians themselves in Brazilian TV.
    Everyone can check by himself !!!!!!!

    And concerning Biodiesel from Soya, few of you know that your real competitor that beats Brazil hands down, hands up or hands in the pockets is…….ARGENTINA…..A MUCH LOWER COST PRODUCER THAN…..BRAZIL…..WETHER YOU LIKE OR NOT !

    Please read the article by yourself :
    Brazil soy industry prepares for biodiesel war with Argentina
    http://www.marketwatch.com/news/story/brazil-soy-industryprepares-biodiesel-war/story.aspx?guid={25F4E372-55D8-41D4-9E71-92A4031C0088}

  • bo

    everyone knows….
    about the trading practices of many countries, their protectionism, etc. Brazil is a leader in this, and always “chorando” about tariffs on their exports, when in reality their exports are taxed much less than they tax the exports of other countries. They may get away with this behavior here in brazil, with their own citizens, but it just won’t work in international trade.

  • conceicao

    The 7% window is only available to certain Caribbean and Central American nations covered by free trade agreements with the U.S. Brasilian ethanol exports are not covered. The ability of
    Brasil to export a substantial amount of product anyway just shows what a fraud corn-based ethanol is.

  • ch.c.

    Brazil GDP !!!!!!!
    Not at all Bo !
    Brazil has even a higher GDP than Us$ 1,1 trillion.
    But this is based on a PPP basis and not straight !
    Thus as you can see, weak people always use tricks to appear less stupid and stronger than they really are !!!!

    And to Conceicao : you too are wrong with your US$ 200 million ethanol tax ! For the simple reason that the USA has a law that allow the import TAX FREE of 7 % of their own alternative bio fuel production !
    Knowing the USA produced around 5,5 billion gallons in 2006, it means that around 385 millions gallons have been imported tax free.
    And Brazil exported 400 millions gallons to the USA !
    The tax bill thus for Brazil has been close to ZERO !!!!!
    Simple as that.
    Furthermore why should Brazil all the time benefits of special favors for their exports but on the other hand heavily tax their own imports ??????
    Bush was dead right saying there wont be be a unilateral cut.
    Hopefully the the EU will give the same answer.

    And let me smile about your statement : this is what Brazil needed to take off ! Even if their ethanol export to is multiplied by 10 in the next few years, it will still represents VERY LITTLE in their GLOBAL TOTAL EXPORTS !
    4 BILLION GALLONS OF ETHANOL EXPORTS WOULD REPRESENTS AROUND 5-6 BILLION DOLLARS ON TOTAL EXPORTS OF AROUND 150 BILLIONS DOLLARS OR SO !!!!!
    Doubtful then that they will take off as you say by exporting 4 % more than they actually export !!!!!!

    Finally using your same “take off” analysis, why dont foreign car manufacturers switch their Brazilian production to India or China ?
    This would not only allow these countries to take off too….as you say, but will also provide cheaper and better cars for Brazilians.
    And if Brazilians charge 100 % import tax on foreign made cars…..as they do NOW, they could also put a zero import tax, similar to what they expect others to do on their ethanol exports.

    Afterall is this not the Brazilian theory ??????

    I just remind you that the car and truck industry in Brazil is far higher than their ethanol industry.
    And not 1 single car or truck is really Brazilian. 100 % are foreign manufacturers that created millions of direct and indirect jobs in Brazil.
    Better yet, the workers salaries in these industries are quite high…..much much higher than those in ethanol/sugar or agro industries !
    It even allow Brazil to earn billions and billions by exporting cars/trucks and spare parts….on top of filling mostly their local needs that would otherwise be filled with imports !!!!!
    And it did not cost 1 Real of investments to Brazilians. All investments were done by the foreign car manufacturers themselves !!!!!

    And Brazil dont even say thank you to the USA or the EU, but continue complaining and beg every day for more favors !!!!!!

  • conceicao

    I thought that the $1.1 trillion figure appeared on this website. I doubt that your 1.1 trillion real figure is correct because I have a $580 billion figure from the Economist magazine for
    2004 and believe that the Brasilian economy has grown somewhat since then and the real has strengthened significantly against the dollar in the interim. Still, the $1.1 trillion figure
    does seem high compared to the $580 billion 2004 figure. In any case, the effect from eliminating the U.S. tariff on Brasilan ethanol would have a much greater effect on a 1.1 trillion real
    economy than a $1.1 trillion economy.

  • bo

    [quote]written by conceicao, 2007-04-02 21:12:45

    Imagine the impact on Brasil’s current $1.1 trillion economy ….[/quote]

    Conceicao, brazil does not have a 1.1 trillion dollar economy. It has a 1.1 trillion [b]REAL[/b] economy. Quite different.

  • conceicao

    The U.S. business channel reported that corn acreage is returning $334 in profit per acre on average to U.S. corn farmers. Given 2007 plantings projected at 90 million acres, you are talking
    about $30 billion in 2007 corn acreage profits for U.S. farmers. This does not include the ill-gotten profits from refining ethanol and shoving it down the throats of U.S. consumers at prices
    higher than that for the comparable refined petroleum product. By comparison, Petrobras earns about $3 billion net per quarter. Imagine the impact on Brasil’s current $1.1 trillion economy
    if this $30 billion profit instead accrued to her sugar farmers with an additional $4-5 billion in profits to Brasil-based ethanol producers from 30-plus percent margin exports to a U.S. free
    market – this instead of the really substantial hit to Brasilian GDP from the $200 million – plus in tariff taxes Brasilian ethanol producers paid to the U.S. in 2006. Talking about ag tariffs is fine,
    but eliminating the ethanol is the powerball the Brasilian economy needs to take off. Lula should thank Bush for making him look like a statesman by comparison.

  • ch.c.

    Well said Georges !!!!!!!
    Developing nations to which Brazil belong have far more tariffs and import taxes tha the USA !!!!!

    And if there is no reciprocity…there simply should not be a deal !!!!!!!!

    Ohhhh and for welcoming the coming and going of Lula in the USA, corn went 2 times LIMIT DOWN AND wheat went down sharply too !

    And here is the Bush gift to Lula, not known to many : on corn the 2007 SUPPORT PRICE HAS BEEN FIXED AT US$ 4,– PER BUSHEL !!!!!!
    At that price the U.S. farmers can plant and harvest as much as they desire and make a huge profit due to the support price !!!!!!!!!
    So much that they increased their 2007 acreage by 15 %.
    U.S. farmers indicated they plan to sow the most acres in 63 years !!!!!!!

    Ohhhh and sugar prices as you ALL know, expecially AES the expert, is down 50 % in the last 13 months !!!!!!

    Impressive downmove for an “apparent” tremendous growth in sugarcane for ethanol !!!!!!!

    I tell you : something doesnt add. If ethanol is so much in demand, sugar prices by definition SHOULD NOT BE THAT LOW !!!!!
    I HAVE NO DOUBT THAT BRAZIL IS HIDING AND LYING SOMEWHAT, AND SOMEWHERE !!!!!!
    Laugh….laugh…..laugh !!!!!!!!

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