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Brazil Calls EU Trade Commissioner Explanations in Hong Kong a Sham

The third day of negotiations at the 6th Ministerial Meeting of the World Trade Organization (WTO) began under a cloud of tension. After vetoing, Wednesday, December 14,  a proposal to set a date for the end of export subsidies, the European trade commissioner, Peter Mandelson, decided to provide an explanation.

He said that Europe would accept such a deadline, provided the decision also included the end of the so-called indirect subsidies, such as export credits and food assistance, conceded by the United States and other countries.

His justification irritated the members of the G20, the group of 21 developing countries led by Brazil and India. "This justification is a total falsehood. It’s a sham," remarked the Brazilian minister of Foreign Relations, Celso Amorim.

"They say they can’t reduce the subsidies, because that would omit alternative forms of distortion employed by other countries. That is not true. Either it [the deadline] applies to everyone or to no one at all," Amorim affirmed.

The agreement over ending export subsidies, concluded in July, 2004, enumerates all the forms of trade distortion that should be eliminated, but it doesn’t fix a date.

Faced with the impasse in negotiations in Hong Kong, the developing countries decided to focus their efforts on areas in which progress could effectively be made, such as the determination of this deadline.

"It is not that export subsidies are more important than other matters, but, in this case, the ball is sitting right in front of the goal and just needs to be kicked, unlike the other matters," Amorim argued.

In the Brazilian minister’s view, if the European Union accepted setting a date – probably 2010, as various countries have suggested – it would denote a willingness to continue the negotiations involving other areas in 2006.

"Unfortunately, they are using arguments that are so absurd and implausible that we can only believe that political desire is lacking,"

Amorim complained, a few minutes before the start of a meeting between the G20 and Mandelson. "I view all this, I confess, with a bit more pessimism. I try to maintain my optimism until the last possible moment, but I interpret these arguments as an excuse for not doing the homework they must do," the Brazilian Minister said.

Agência Brasil

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  • Guest

    But ……
    – if export tax credits and loans to the agribusiness sector and farmers of between 6 to 10 %, instead of the 30 to 50 % in other sectors and 80 to 150 % to individuals are not subsidies, please tell the world what it is !!!!

    Simple

    No doubt that all EU farmers would agree to elimininate totally the subsidies if they could get loans with such rate differentials.
    Namely, they will borrow at minus 100 % or more, which means that for 100 EU borrowed they will repay zero, year after year.
    Because it is not the rate that is important but the rate differential.
    Between 6/10 % ( farmers rates) and 80/150 % (normal borrowing rate for individuals) equals to a average difference of 100 % in interests PER YEAR.

    Excellent idea ! Excellent proposal. Lets do the deal !

    Europeans farmers will become not wealthy but really rich ! No one, Brazil included, could be more competitive.

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