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Subsidies Are Bound to Hurt US and EU, Says Brazil’s Diplomat

According to Brazilian retired diplomat Rubens Ricúpero, the former secretary general of the UN Conference on Trade and Development, Brazil should not be so concerned with free trade questions in the farm sector at this time, especially in negotiations at the World Trade Organization level. "Sooner or later these problems are going to be dealt with and progress will be made," he said.

Ricúpero went on to emphasis that besides world public opinion which is against the present system of subsidies, there is the fact that budgetary limitations will make it impossible for such spending to continue (for example, western European nations are spending about US$ 1 billion per day on farm subsidies).

According to Ricúpero, the rich nations dominate world trade and almost always come out on top in multilateral negotiations. So, he suggests more direct negotiations, country to country, or block to block.

"There is a natural tendency for trade to increase," says Ricúpero. He points out that this year, even without successful agreements at the WTO or the FTAA, Brazilian exports rose 35%.

"The idea that trade only increases as a result of negotiated agreements is not true. It can happen through the give and take of normal relations. You just have to be careful about giving too much," concluded Ricúpero.

Agência Brasil

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  • Guest

    HUM….
    I must say that long term money lending is not the same as subsidise. BNDES offers a great range of different programs – social, agricultural, industrial, etc. Its absurd the interest rates you just stated here, and if you go into BNDES’ web site, youll see that interest rates are pretty much the same.
    You cannot as well forget that these loans are given for Brazilian development, and has helped a lot to decrease regional economic differences in a developing country (which is only not considered a least developed country for the Southeast and South regions), while EU and USA have a pretty stronger economy. Lets not forget that.

  • Guest

    I knew that….
    EU subsidises were around 50 to 60 billions Euros.

    Now Brazilian should know that their agribusinesses and farmers get loans with an interest rate between 6 to 10 %.
    Knowing that individuals and corporations outside agriculture must borrow money at a rate of between 40 to 150 %, the difference is simply a subsidy. Not a small one by any definition. Of course, not a word on this subject from Brazil government.
    This year alone the BNDES budget lent 26 billions Reais to agribusinesses and farmers. A minimum differential rate of 40 % equals to 10 billions Reais or around US$ 5 billions or almost 1 % of GNI. But a loan is granted for several years and above BNDES loans are for this year only.
    Therefore we should add up all outstanding BNDES loans and loans by other governmental agencies. No dout this will equal to far more than 1 % of the GNI just for the differential in interest rates.

  • Guest

    Yes, but…
    Here’s a little tidbit from the EU’s official website:

    “The European Union budget is drawn up on an annual basis and charts the Community’s income and expenditure.

    “The Community budget for 2004 amounts to around EUR 112 billion, 45% of which is allocated to the Common Agricultural Policy and 34% to regional policy. This sum represents less than 1% of the gross national income (GNI) of the European Union of 25 countries.”

  • Guest

    US$ 1 billion PER DAY ?
    IMPOSSIBLE !!!!

    This is more than the total annual budget of the EU !

    Brainwash with wrong numbers is too easy to disseminate to unknowledgable people !

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