Brazil and US Waiting for the Other to Blink First on WTO Talks

Brazil signaled this week it would take a tough stance in talks to save a global trade deal saying last-ditch compromise proposals were too weighted in favor of rich-country interests. Brazilian Foreign Minister Celso Amorim also criticized the US for saying it would not discuss the kind of cuts to US farm subsidies that many poor countries are seeking.

Amorim was speaking after World Trade Organization (WTO) mediators in Geneva floated compromise proposals in a bid to rescue the WTO struggling Doha round of negotiations for a global free trade deal.

"I think the texts have defects," Amorim told reporters in Brussels after meeting EU Trade Commissioner, Peter Mandelson, in his first comments on the compromise proposals. "I think they are more ambitious on (industrial goods) than they are on agriculture."

Brazil and other developing countries are seeking to bring down barriers in rich countries to their farm exports. But they are concerned about opening up their markets to imports of industrial goods such as cars or chemicals.

The compromise texts included detailed ranges of cuts to farm subsidies and import tariffs for countries around the world, including a proposed range of 13/16.4 billion US dollars for a ceiling on US farm subsidies. The plan was worked out by Crawford Falconer, who chairs WTO agriculture negotiations.

Brazil and other developing countries are seeking a ceiling of 12 billion a year. But a US government official said that cutting US farm subsidies to 13 billion a year was "unacceptable".

The US spent approximately 12 billion on farm subsidies in the past few years, but argued that the new framework for world trade talks could rob farmers of a buffer to weather changes in crop prices.

"All it takes is a drop in corn prices, and all of a sudden you're looking at such large outlays" that might push crop supports beyond that kind of limit, said the Bush administration official.

The Bush administration has long said it could make deeper cuts if and only if other countries reduce tariffs sufficiently. While the US position has been that Falconer's latest text laid out encouraging areas of consensus among WTO members, the plan is faulted as having a "balance issue".

Brazil's Amorim anticipated that "if this scenario proves true, there won't be much negotiating", adding that "it's a shame if they (US) said that".

WTO countries are due to discuss the new negotiating proposals next week in Geneva.

Mercopress