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Brazilian Industry Urges Bilateral Agreements with US and EU

Brazilian industry Due to the impasse in the Doha Rounds of trade negotiations, bilateral and regional initiatives that involve the main markets in the world should gain new impetus. To the Brazilian National Confederation of Industries (CNI), Brazil cannot miss this opportunity.

The country must adopt a pragmatic and selective agenda, based on economic criteria, aimed at improving relevant market access conditions for Brazilian products, says the CNI in document "Priorities in the Brazilian Trade Negotiation Agenda", disclosed Thursday, June 28.

The Doha Rounds are still the priority for the industrial sector, mainly due to characteristics of Brazilian foreign trade (small share in global trade and diversified commercial relations in geographic terms).

"But negotiations in the scope of the World Trade Organization (WTO) have little chance of a significant leap in foreign market access conditions for Brazilian exports," points out the text.

For this reason, the CNI defends a strategy of bilateral and regional negotiations based on economic criteria that permit the identification of priority countries and adequate instruments to make use of the existing opportunities.

These criteria should consolidate the size of the import market of these countries, the expansion opportunities and diversification of Brazilian sales and the levels of protection to products in which Brazil is competitive.

According to these criteria, priority markets are the United States, due to the dimension, dynamism and relevance in global terms, and the European Union, the main commercial partner of Brazil, which imports a varied range of industrial products with varied degrees of industrialization.

Apart from them, other markets of great importance for Brazil are the Mexican, Indian and South African markets, developing countries with relatively large and dynamic markets but that have high tariffs for most products that represent great opportunities.

The countries in the Gulf Cooperation Council (GCC), like Saudi Arabia and the United Arab Emirates, have also been included in the list. The Mercosur, the bloc that includes Brazil, Argentina, Paraguay, Uruguay and Venezuela, is already negotiating a free trade agreement with the GCC, which also includes Bahrain, Qatar, Kuwait and Oman.

The Mercosur has also started tariff preference agreement negotiations with Egypt and Morocco.

The moment is right for the adoption of this strategy, due to the process of appreciation of the Brazilian real against the dollar. This has caused the growth of exports to slow and, consequently, reduced the sector's participation in the country Gross Domestic Product (GDP, the total of all the country's production).

This contribution was 0.7 percentage points in 1999 and rose to 2.3 percentage points in 2004. In 2005, it dropped to 1.7 percentage points and, last year, returned to the level of 1999. The forecast for this year is that it will remain at the same level.

For this reason, Brazil needs commercial policies that promote the gain of competitiveness, compensating the adverse effects of this tendency, says the CNI document. Such policies should start by improving domestic competitiveness conditions, negotiations for better market access conditions and trade promotion of Brazilian products in relevant markets.



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