The WTO is considering whether to hold a ministerial-level meeting in Geneva in coming days to advance talks that collapsed in July over safeguards to protect domestic farmers from a flood of food imports.

But that meeting produced preliminary agreement in several areas, including an outline of possible tariff reductions on manufactured products.

"Any attempt to rebalance the July package will result in failure," Amorim said.

The United States wants Brazil, India and China to commit to taking part in deals eliminating tariffs in individual sectors such as chemicals but the big emerging countries say participation must be voluntary.

"Any attempt at this time to convert the basis of sectoral talks from something voluntary to obligatory … we better not go to Geneva at all," Amorim said in Brazilian capital Brasí­lia.

As a key farm goods exporter Brazil has played a key role in the talks, attempting to forge a common front of developing countries in the so-called G-20 group.

The latest revisions of two papers including what could become the formulas for cutting tariffs and trade-distorting agricultural subsidies in a final deal were issued on December 6, 2008. They are the outcome of the latest discussions in negotiation groups and would be a focus of crucial talks if a representative group of ministers return to Geneva later in December.

According to the WTO site the two documents are revisions of drafts previously circulated in July 2007, and May, February and July 2008 and are the result of WTO member governments' latest positions in the discussions since September 2007, one of the most intensive periods of negotiations since the Doha Round talks began in 2001.

The latest drafts also try to capture agreement reached tentatively on some subjects when a group of ministers came to Geneva in July 2008 and tried but failed to reach agreement on these issues.

The texts are agriculture negotiations chairperson Ambassador Crawford Falconer's and non-agricultural market access (NAMA) chairperson Luzius Wasescha's latest draft "modalities."

The papers are the chairs' assessment of what might be agreed for the formulas for cutting tariffs and trade-distorting agricultural subsidies, and related provisions. After these "modalities" have been agreed, members will apply the formulas to their tariffs and agricultural subsidies.

The two papers were circulated at about the same time because members link the two subjects. Members now intend to move to a new phase where these areas of the Doha Round can be negotiated in comparison with each other with the hope that agreement can be reached later in December 2008, when a representative group of ministers could be in Geneva.

As well as reaching agreement within each subject, members also want to negotiate an acceptable balance between the depths of cuts (the "level of ambition") in agricultural and non-agricultural tariffs and agricultural subsidies as well as the size of cuts that they desire in each area.

Drawn from WTO member governments' positions over several months of the negotiations, these are not "proposals" from the New Zealand and Swiss ambassadors in the sense that "proposals" are normally understood. In other words, these are not the chairs' opinions of what would be "good" for world agricultural and non-agricultural trade, but what might be accepted by all sides in the negotiations.

Mercopress

In a desperate attempt to save the talks WTO Director General Paul Lamy has concentrated efforts on a short list of leading trade countries out of the 35 convened at Geneva.

"On some of the key issues, positions still remain too far apart," admitted Lamy. Any final deal, if approved by negotiators, would then be proposed to all 153 WTO members who would have to ratify it individually.

After meetings of the 35 invited delegations failed to deliver progress early in the week, Lamy has concentrated his efforts on trying to get a smaller group of seven leading trade powers to find common ground.

Only the US, the EU, Japan, India, Brazil, Australia and China were involved in talks until the early hours of Thursday, which drew complaints from smaller nations.

Brazil's Foreign Minister Celso Amorim admitted after Thursday's meeting ended that the talks had not broken up so far, and there was interest in continuing, but time was running out.

"Tomorrow is the day in which we must know whether it's possible or not. Maybe we don't finish everything but you must have an idea whether it's possible or not" he told reporters.

US Trade Representative Susan Schwab said that despite some progress the talks had not moved as much as Washington hoped when it offered on Tuesday to slash its farm subsidies.

"Let's put it this way: some countries are stretching more than others and we'll see tomorrow whether everybody is prepared to do their share" said Schwab.

Speaking from Brasilia Reinhold Stephanes Brazil's agriculture minister said "this round is pointless. There is no way to achieve any results." Stephanes, who has only peripheral involvement in the haggling, said he saw "no objective reason" why a free-trade accord from the talks "would have a positive impact on world agriculture."

"It is very difficult, even impossible, to see the countries with trade protection and subsidies at the heart of their production structures giving that away in return for nothing."

Meantime French President Nicolas Sarkozy warned that Paris could sink the whole Geneva exercise.

"At the WTO, this agreement which is on the table, if it is not modified, then we will not sign it," he said referring to a draft agreement under discussion at the talks.

Although the agreement is a mere draft, Sarkozy's comments reflect deep anxiety and opposition in France to concessions that would damage its farming sector.

European Trade Commissioner Peter Mandelson shrugged off the threat from Sarkozy, reminding the French leader that the Commission held a mandate agreed by each member state to negotiate on behalf of the EU.

The Doha Round began seven years ago with the aim of helping poor countries but has been delayed by disputes between the rich developed world and poorer developing nations over cutting subsidies and tariffs.

The US and European Union want developing countries to open up their markets for industrial goods and services and big developing countries like Brazil and India say the rich nations are not doing enough to break down the tariff walls and subsidies that distort farm trade.

Mercopress

Following the summit, Brazilian officials began a weeklong tour, stopping in Morocco, Algeria and Tunisia, during which they discussed a set of commercial agreements that will boost multilateral cooperation with several African countries. The trade agreements, projected to begin in 2009, include an expansion in ethanol investment, urbanism, air and sea transport, and cooperation in professional training between the two regions.

In a statement that appeared in Brazzil magazine, Brazilian Secretary of Development, Ivan Ramalho, remarked that he hoped the meetings would enhance trade with other countries in order to diminish Brazil’s over-reliance on the U.S. market. Brazil’s recent trade initiatives with other developing countries have emerged largely due to the reluctance of some developed nations to lower trade subsidies. This impedes Brazil’s ability to trade, adding significantly to the current debate over rising food prices.

In an official statement released after the first set of meetings, Michel Alaby, Secretary General of the Arab Brazilian Chamber of Commerce, called for solidarity among countries suffering from rising food prices and demanded that developed countries, especially the U.S. and Europe, eliminate international trade barriers in the agricultural sector (Brazzil Magazine).

With the emerging agreements, Brazilian officials hope to call attention to the U.S.’ highly inefficient corn-based ethanol production at the height of a snowballing food crisis. The government aspires to be a strong actor in the midst of the food crisis and plans to show the rest of the world the benefits of Brazil’s efficient sugar ethanol market, while it professes to be executing projects stalling the destruction of the Amazon rainforest.

US Subsidies and World Hunger

On June 16, following petitions from the Brazilian government, the World Trade Organization (WTO) condemned the U.S. for its agricultural subsidies that unfairly favor domestic producers. The WTO largely blamed Washington’s practices for the world food crisis that may leave an additional 100 million people hungry by the end of 2008.

The WTO criticized U.S. actions as “an attempt to disrespect international commercial regulation with subsidies that drastically reduced domestic prices and could have been seriously damaging for developing nations like Brazil.” (New York Times).

During the Food Summit, which was hosted by the UN Food and Agricultural Organization (FAO), U.S. representatives argued in favor of their protectionist policies, claiming that biofuels are environmentally safer than petroleum, and also benefit farmers, entrepreneurs, and consumers.

Under pressure from formidable agricultural lobby groups, the U.S. Congress recently placed a 54-cent per gallon tariff on sugar-based ethanol, hoping to encourage domestic ethanol production. As a result of the tariff, U.S. ethanol production increased and Brazilian ethanol exports fell significantly in 2007. Efforts to remove the tariffs have faced strong resistance from both corn and sugar lobbyists, impeding any kind of remedial actions on surging grain prices.

As economist C. Ford Runge, a commodity and trade specialist at the Center for International Food and Agricultural Policy, confirms, “If you want to take some of the pressure off the U.S. market, the obvious thing to do is lower that tariff and let some Brazilian ethanol come in.” Supporters of this policy believe that increasing Brazilian ethanol production would push down overall energy costs.

Since the Summit, the UN has called on the international community to increase its assistance to developing countries severely affected by the current food crisis. UN officials have planned visits to several African countries to discuss possible food security solutions. In addition, the FAO published several reports criticizing the U.S. and Europe for unnecessarily subsidizing crops and inadvertently driving up food prices while shifting food production in less-developed countries where small farmers cannot effectively compete.

The Guardian noted from the reports that the U.S. government is currently spending US$ 7 billion annually on subsidies, while the European Union spends around 43 billion euros(US$ 67.5 billion) (BBC News). A striking example can be seen in France, where the average French cow receives more financial support than half the world’s population earns daily.

With rich countries dominating global trade that greatly affects ethanol, FAO General Director Jacques Diouf says that funding for agricultural programs in developing countries increasingly suffers with agricultural aid to poor countries having dropped 56% from 1980 to 2005. “Now more than ever private decisions being made about food production into ethanol are affecting all parts of the globe, with little response from the leaders that could do the most,” Diouf observed.

One main concern over how biofuel policy disrupts the market is the current excessive power that interest groups have in the debate on subsidies in developed nations (Runge). Instead of catering to special interests, U.S. politicians would be well advised to cooperate with other countries. While the UN works diligently to halt the growing food shortage, world leaders refuse to amend restrictions on food exports. This negligence is inexcusable on both economic and humanitarian grounds.

Not All Ethanol is The Same

In defense of sugar-based ethanol, President Lula stated that the U.S. misguidedly produces corn for ethanol instead of other agricultural products, while keeping subsidies high to benefit U.S. multinational companies. Lula argues that this is another case where the U.S. keeps developing countries from playing an influential role in the world economy.

He claimed, “I am sorry to see that many of those who blame ethanol, including from sugarcane, for the high price of food are the same ones who for decades have maintained protectionist policies to the detriment of farmers in poor countries and of consumers in the entire world.”

In comparison with corn-based ethanol, sugar-based ethanol is more efficient, cheaper to produce, and uses less valuable land. According to the World Bank’s, Biofuels: the Promises and the Risks, the U.S. ethanol industry currently uses 10 million hectares, while Brazil only uses 3.6 million of such terrain and produces eight to ten times more energy than that produced from corn.

Brazil does not subsidize sugar, which helps sustain global sugar prices. Whereas corn prices have surged 65% in the last five years, which many argue is the result of U.S. subsidies. Brazilian ethanol also yields 8.3 times more energy than the fossil fuels used to produce it, while corn ethanol yields only 1.5 times the energy it consumes.

Further ethanol controversy surrounds environmentalist concerns that Brazil’s sugar industry is permanently destroying large areas of the Amazon rainforest. The industry has forced small farmers to sell their land at low prices and work for large multinational companies, under poor conditions and scant pay. In addition, Brazil’s ethanol production has pushed soybean cultivation and cattle ranching into the Amazon area, making room for sugarcane production in the southeastern part of the country.

This region, once home to coffee and fruit plantations, was originally part of the Southeastern portion of the Amazon rainforest, of which only 7% remains today. Another environmental concern regarding sugar cane cultivation involves the burning of the old cane to get rid of dry leaves and dispensable biomass. This hazardous practice creates health problems for local populations, and spreads the fires into some of the remaining Amazon rainforests.

President Lula has increasingly displayed support to protect the Amazon from ongoing destruction. On June 19, the government extended its two-year ban on the sale of soy from the deforested land in Amazônia until July 2009. Additionally, officials from the Brazilian Institute of Environment and Renewable Natural Resources have already begun bans on beef and timber from illegal Amazon lands (Mercopress).

This recent commitment could signify the government’s sincerity regarding prevention of deforestation and “its commitment to a policy of environmental registration and licensing for land in Amazônia (Brazzil Magazine).

New policies also present Brazil as environmentally conscious to international groups such as Greenpeace, who have in the past heavily criticized the country’s lack of effort in sustaining the Amazon’s integrity.

Greenpeace director Paulo Adario applauded Lula, stating, “Today’s decision is important because it proves that it’s possible to guarantee food production without cutting down one more hectare of Amazon forest.” Also, in an attempt to speed the recovery of Amazonian pastures and degraded soils, the government will offer soft loans, ample credit for small farmers, and an insurance system designed to reduce the risks of climate change.

With the appointment of strong conservationists such as the Minister of Environment, Carlos Minc, a UN awarded defender of the environment, the Lula administration is taking urgent steps to enhance agricultural production and increase Amazonian protection. If action indeed follows such rhetoric, Brazilian planners could be on the verge of helping the country become a world player in trade while it attempts to keep domestic prices low.

Currently, Brazil produces 5.8 billion gallons of ethanol annually, but exports only 960 million gallons. Yet the energy giant is capable of providing the world with 52 billion gallons a year if, through new foreign investment, the government can put in an additional US$ 9.5 billion for financing pipelines, terminals and new plants, offsetting the international dependence on OPEC (U.S. Energy Information Administration).

As ethanol increasingly becomes a fixture in the global energy debate, these new steps could mark significant progress in fighting the global food crisis, while drawing increasing international scrutiny to the irresponsible, self-interested subsidy initiatives stealthily exhibited by the U.S., Europe, and Japan.

This analysis was prepared by COHA Research Associate Maggie Airriess. The Council on Hemispheric Affairs (COHA) – www.coha.org – is a think tank established in 1975 to discuss and promote inter-American relationship. Email: coha@coha.org.

The request for the inquiry on the United States was placed at the WTO on Tuesday, July 10, in Geneva (Switzerland). The government of Brazil states that the subsidies granted by the North Americans in the period were above the yearly US$ 19 billion limit granted by the WTO.

The Brazilian decision takes into consideration the same inquiry placed by Canada. It was also influenced by the impasse in the negotiations of the WTO Doha Rounds, according to the undersecretary general for Economic and Technological Affairs at the Brazilian Foreign Office (Itamaraty), Roberto Azevedo.

Earlier this month, Brazilian President Luiz Inácio Lula da Silva speaking at the Progressive Governance Summit that he attended in South Africa on the last stop of his five-day trip to Africa, once again called for reduced farm subsidies in rich nations. This, according to Lula, would allow poorer nations to export their agricultural produce with better results.

Heads of state from the United Kingdom, New Zealand, South Africa, Ethiopia, Sweden and South Korea, along with the head of the World Trade Organization, Pascoal Lamy, and the EU trade negotiator, Peter Mendelson, participated in the summit.

Lula also suggested that biodiesel could stimulate growth in poor nations. He said rich nations could finance its production and then buy the product, creating a mutually beneficial rich-poor nation relationship.

Lula added that it is becoming more obvious to all that poor nations can contribute to world trade, as well as science and technology. He said Brazil was willing to assist the less favored.

Bush said that the US would like to cut those subsidies as long as Brazil opens its markets for more American goods and services. Since both sides seem intent in not budging there was no room for real progress beyond rhetoric.

What follows is the transcript of both presidents talks after the Saturday meeting:

PRESIDENT BUSH: Mr. President, welcome to Camp David. Laura and I are delighted you're here. This is a special spot for Laura and me, and it was my honor to welcome you to this part of America. You come as a friend, we welcome you as a friend, and our discussions were very friendly.

We talked about a lot of areas of mutual concern. We talked about what I would call mutual opportunities. We talked about, of course, trade. Brazil and America trade a lot. Perhaps the most compelling part of the opportunity to work together is for the Doha Round. It's in the U.S. interest that we complete the Doha Round successfully. It is in — I think it's in Brazil's interest — at least that's the way the President has told me. I don't want to put words in his mouth. But 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.

President George W. Bush and Brazilian President Luiz Inácio Lula da Silva shake hands at the conclusion of their joint news conference Saturday, March 31, 2007, at Camp David. White House photo by Eric Draper I strongly believe that the best way to help alleviate world poverty is through trade. And so we had yet another constructive dialogue. We had a good dialogue there in S o Paulo, and here at Camp David we had, as well. Interestingly enough, we announced the creation of a U.S.-Brazil CEO forum. It's a opportunity for people in our respective countries to get to know each other better and to strengthen economic ties, as well as social ties.

We talked about biofuels. I can remember very well, Mr. President, going to the Petrobras plant. It's an amazing facility. It was exciting for me to see the realities of your biofuels industry firsthand. I'm a big believer in alternative fuels. There's a whole new industry here in the United States beginning to spring up. And I told the President that not only are we committed domestically to promoting a alternative fuel industry, we're committed to working with Brazil. And that's why we support the President's initiative on the international biofuels forum, as well as the initiative that we talked about in São Paulo, and signed a memorandum of understanding, and that is to help nations in our own hemisphere realize the benefits of ethanol and biodiesel.

I appreciate the President's very strong commitment to democracy. I also appreciate his very strong commitment to help nations, particularly on the continent of Africa. And one of the really exciting initiatives that we will work together on is an initiative to eradicate malaria in São Tomé and Prí­ncipe, two opportunities for Brazil and the United States to work together to improve somebody's life. There is no excuse for malaria to continuing to kill as many people as it does.

Our great nations can work together to stop that death. There is a reasonable plan in place. It's a plan that I'm confident can achieve great success, and it makes a lot of sense for Brazil and the United States to work toward that plan.

As I said in São Paulo, Mr. President, I appreciate very much your leadership on Haiti. I appreciate the fact that you've led the U.N. Stabilization Force. We want to, of course, make sure that your efforts to bring security are followed up by opportunity for the people of Haiti. We don't want your forces to be there to simply stabilize, we want your force to leave — be a part of a constructive future, which is precisely your vision. And we want to work with you very closely to achieve that end.

President George W. Bush listens as Brazilian President Luiz Inácio Lula da Silva answers a reporter's question during their joint news conference Saturday, March 31, 2007, at Camp David. White House photo by Eric Draper We spent a lot of time talking about other parts of the world. And that's what you would expect when the United States and Brazil sit at the same table. Brazil is an influential nation, and it's an important nation. And I really do appreciate so very much your — sharing your strategic thoughts about not only our own neighborhood, but other parts of the world.

And so, Mr. President, it's with great pleasure that I welcome you here. I'm looking forward to giving you a tour of Camp David. We've been spending too much time doing business; now we need to do a little pleasure. And after this press conference, you and I will take a little tour, and then I'll feed you a meal, if you're hungry.

Welcome.

PRESIDENT LULA: Your Excellency, Mr. George W. Bush, the President of the United States; Madam First Lady Laura Bush; Madam Secretary of State Condoleezza Rice; Ambassador Celso Amorim, and other ministers from Brazil; ladies and gentlemen; members of the Brazilian delegation and the U.S. delegation; newspaper representatives, press representatives. First of all, I would like to thank President Bush for the invitation. My visit to Camp David made it possible for us to cope with issues of global, regional, and bilateral interest.

I believe that the 21st century will be marked by changes that we will have to undertake, and also for the improvement of the things that we did right in the 20th century. We don't have anymore the Cold War amongst us. We don't experience anymore the bipolarity that affected our lives during half a century. And so now we should try to do in the 21st century, make it the century of inclusion of those that are disenfranchised in the 20th century. And I am talking about the less developed countries in Latin America, of South America, of Africa and of Asia.

And we also have a subject matter that we have to cope in the 21st century that we did not cope well in the 20th century, and that could pervade our relations for the next years. That is the issue of climate change that affects the planet Earth. Twenty years ago, when we were warned about the problems that we were causing to the world, we used to put the blame on those that were making this warning. We criticized them. We said that they weren't responsible. And we criticized sometimes minority groups that went to the streets with their banners and flags, advocating for environmental preservation.

Now has come the time for all the countries in the world to take very seriously climate change and environmental issues. Why so? Because humanity faces one of the major risks in its history. Global warming is a reality that threatens us by land, by the air, and by the water, a dilemma that ironically embraces all of us, no matter where in the planet Earth. The issue is frightening and very concrete, and a problem of today. But its solution is still feasible. And part of the solution is in our reach.

We have talked already about this twice. We have talked about biofuels, and about our determination in deepening the cooperation in this sector. The memorandum of understanding that was signed in S o Paulo is the basis of an ambitious partnership that will make it possible for us to confront the major challenges of this century that is now beginning: First of all, the resolution of the energy crisis that affects almost all countries in the world; secondly, the environment protection threatened by the global warming of the planet; and finally, poverty relief and social exclusion with the creation of new jobs and expanding the workers' income for the poorest workers of the world.

We intend to send our scientists and experts from Brazil to research centers in the U.S., and vice versa. We will create a fund with the support of international agencies, so that we can finance the cooperation with the most needy and interest [sic] countries. We're also committed to the strengthening of the international biofuel forum. I invited the United States to participate in an international conference on the issue that Brazil will host in the year 2008.

The concern with the environment is growing in Brazil and in the world, and above all, especially after the latest reports from the U.N. Panel on Climate Change. The stimulus for sustainable production of biofuels is a decisive part of this endeavor to resolve this issue. The biofuels offer equally a unique opportunity for the energy democratization of the world to diversify sources of production. We also have obtained good results in different areas.

It's important to say to President Bush, here in Camp David, in his residence, that, for me, the biofuel issue is almost like an obsession. I don't know why, but we already have talked about — or heard about biofuels since 1925. Already was mentioned biodiesel in 1943 in Brazil. Nevertheless, since we didn't have the dimension, the scope of the evils that oil could cause, or any other kind of energy matrix to the world — because also oil was very cheap in those days — this was not taken forward by any country, neither by the automobile industry of any country. And now we are facing a period, a moment, where this new energy matrix can make the world more independent.

It can make the world creating more wealth, because the experience that we have in Brazil is that for each worker that works in a biodiesel plant, it is necessary 1,000 workers in the countryside, which means that we can create millions of jobs for the less developed countries in the world that was not foreseen in any paper that was signed by us in the 20th century.

In Brazil, in the last four years, we managed to reduce the deforestation of the Amazon rainforest 52 percent. More than two million hectares have been saved. Please pay attention. And carbon gas emissions have been reduced in more than 400 tons, emissions to the atmosphere. And we know that the rainforests are amongst the great victims of climate change. In the negotiations on the Convention on Climate Change, we proposed financial incentives to reduce carbon gas emissions per ton, resulting in further reductions of deforestation. We expect that our proposal would have the support of international community, and obviously, especially and mainly from the U.S.

We first can establish a partnership either for promoting biofuels, and also in fighting the investigation of the global warming, and of deforestation itself with full respect to the sovereignty of each country.

Brazil has the largest and most important biodiversity on the planet. We have the consciousness of the value that this natural asset represents for our country and for the world. Brazil, with 383 million hectares of arable land has the capacity to reconcile food production, biofuel production and the defense of our forests. Our well-known commitment to fight hunger does not allow us that any activity would cause damage to the food production. I should say, and President Bush knows very well, and also know, and I believe that all rulers are aware that the world hunger does not result from a lack of food. Rather, it has more to do with the — (inaudible) — distribution of income and the lack of political will.

Talking with President Bush about the concern of my government to fight hunger and poverty, I mentioned our concern with the Doha Round of the WTO. It is central in our struggle against poverty. And I leave Camp David with the certainty that I've never seen in all the previous conversations that I had with President Bush, or with Madam Condoleezza Rice, I never have left a meeting between us with so much optimism as I am this way, that I believe we're getting closer than we have ever been before to reach an agreement during the Doha Round of the WTO.

We are trying to conclude with success these trade negotiations. We have urgency in reach, and ambitious and balanced agreements. The continuation of agriculture subsidies makes food more expensive and does not stimulate its production in the less developed countries. Without eliminating subsidies, the opportunity of development represented by biofuels would be lost. And with that, the possibility of the improvement of living conditions of hundreds of millions of lives of men and women.

So that's why it's necessary to eliminate the trade barriers to ethanol, so that we can really reach a true energy commodity. I dream that, at the most, 15 to 20 years from now, that the world will surrender to the biofuels. So those that believe in that, they start to invest today and now, because if they leave it for the future, they're going to lag behind and they're going to lose the train, and possibly they will be lagging behind in the history of modernization.

Dear friends, naturally, I have spoken with President Bush about the Brazilian concern on the limited progress of the U.N. reform. This is where we have more divergence. But in politics, if there's no divergence, if it's not interesting to work with politics, to being politics [sic], but I really wanted, truly, to say to President Bush what was Brazil's view. And President Bush told me what his vision was.

And we reached a conclusion, and certainly it's not an agreement yet, that the U.N. reform still will have to undertake other reforms that we have to undertake within the U.N. itself so that we can guarantee the U.N. Security Council reform. Since I only have 61 years of age, and I have another four years of my term, I am convinced that it won't take a long time for us to see this council changed and the U.N. reformed. I know that it is a highly complex issue. But we cannot postpone it anymore. I am certain that the dialogue between our countries will contribute to forward the issue in a much more faster and appropriate way.

We also talked about other issues on the international agenda, as the situation in the Middle East, especially in Lebanon. And maybe many of you don't know, and I told President Bush that, that in Brazil, we have a community of more than 10 million inhabitants of Lebanese and Syrian ancestry. And so that's why we have been trying to attend all the fora that deal with this issue. And within our possibilities, we try to cooperate to rebuild Lebanon.

We also have tried to help the construction of a viable Palestinian state while, at the same time, respect Israel's right to exist.

Ladies and gentlemen, we approached important issues in our regional agenda, and I told to President Bush that we have to do more for Haiti. And, in this case, it's interesting to remember that we have reached already agreements not only to work together with Haiti, and work together with the Dominican Republic, and work together in countries like São Tomé and Prí­ncipe in Africa, and in Guinea-Bissau in Africa. And if these experiments are successful, these joint partnerships, this joint work, I believe that we'll have much more room for us to build other projects between the U.S. and Brazil, so that we can help third party countries.

We also agreed that the cooperation with biofuels in Haiti could be decisive to that country. It's not suffice to be the armed forces from Brazil, Chile, Argentina in Haiti, leading the stabilization mission of the U.N. We need to guarantee democracy in Haiti, governance. It's necessary to guarantee their security, but if we don't have development and jobs, all of that will disappear very quickly.

I also told President Bush that Brazil invests firmly in South American integration. I should say, President Bush, this is another thing that I pursued since the first year of my term. If we want to guarantee democracy in South America, if we want to guarantee South American development, if we want to guarantee the strengthening of institutions in South America, we have to have the consciousness that fiscal integration is a basic addition for the development of the region. And maybe, who knows, the United States can be a partner of Brazil and of other countries in South America in the fiscal integration that we so much are in need.

And we understand that this is what will guarantee development for the region and will guarantee democracy, and so will open the opportunities that we did not have years ago for us to develop ourselves.

We are obtaining extraordinary advances vis-í -vis integration, expanding trade and making all the infrastructure work that we can develop. The bottom line is that we're getting closer ties to our people that were very much far away from each other in the past. And so now we're getting closer. And so that's why I invited President Bush from the United States to become a partner in this integration process and building the fiscal integration of our continent.

I also mentioned to President Bush an important role that United States can play with South American countries that are living in special situations, especially those that need trade preferences. It is extremely important for the U.S. to support these countries that need these trade preferences. We need to support them because this will guarantee the regional stability that is the interest to Brazil and all the countries in South America, and certainly this is the interest of the U.S., too.

Together, we can provide aid to those countries that are still needy, especially in Africa. I have already mentioned the agreement that we signed with Guinea-Bissau and for São Tomé and Prí­ncipe.

The challenge, President Bush, in the world of today, in trade, in security, in the environment and fighting poverty are immense. To resolve these issues, there is only one way; it is through dialogue, with a frank and mutually respectful dialogue. That's the only way. With this objective, I have been saying to President Bush that I am willing to gather with him as many times as necessary, and with all the heads of government around the world, as many times would be necessary so that we can, in the 21st century, arouse a little bit of hope in part of the poorest population in the planet. We have in our hands and our reach the power to do so. We will not do it if we don't wish to do so.

So that's why before we answer questions from the press with President Bush, I would like to convey to President Bush that, of all the meetings that I participated, meetings with American government, this was the meeting that was the most productive one. If someone asked me, what are you taking back to Brazil, I would say, nothing, I'm not taking back anything to Brazil; but certainly, the agreements that we have signed today, the agreements that we can still sign from here onwards, can guarantee in a definite way that the relations between U.S. and Brazil, not only is necessary, but it is strategic so that we can consolidate a new development model, a new trade policy, and, above all, a new way to cope with the very serious, severe issues that affect the planet.

So, for all that, thank you very much.

Q The Attorney General's chief of staff testified that Gonzales knew more about the U.S. attorney firings than he let on. How can the American people have confidence in an Attorney General who isn't completely forthright? How long does he have to repair the damage, and can the damage be repaired?

PRESIDENT BUSH: Attorney General Gonzales is an honorable and honest man, and he has my full confidence. He is providing documents for Congress to find the truth. He will testify in front of Congress, and he will tell the truth.

The U.S. attorneys serve at the pleasure of the United States President. I named them to four-year terms. They served their four-year terms. And I appreciate their service. I'm sorry that this — these hearings and all this stuff have besmirched their reputation. That was certainly not the intent of anybody in this administration. But I will remind you, there is no credible evidence that there has been any wrongdoing.

Q The goodwill between you gentlemen is very evident. President Lula, it is also evident the effort to advance with the Doha Round. If the Doha Round has not reached success, Brazil, does it have a B plan?

President Bush, what is the impediment, or what would be the impediment for the United States to have a bilateral agreement on trade with Brazil?

PRESIDENT LULA: Well, I have said to all the heads of state in government that I have been in contact: to President Bush, to Tony Blair, and to Chancellor Angela Merkel, to Prime Minister Prodi, and to President Chirac — with all I have been talking to, I have said that the Doha Round is not important only for Brazil, it's not important only for the United States, it's important so that we can guarantee hope around the world, and especially the certainty that we will have more peace in the world.

Brazil is a competitive country in agriculture. Brazil, today, 50 percent of its exports are semi-industrialized goods. And so we do have competitiveness conditions. President Bush knows, and I know, and I believe that all the leaders know, that when we talk about agreements at the WTO, we are making — endeavor at the Doha Round — we are working especially so that the less developed countries could have an opportunity, a chance. Of course, we can improve our relations when Brazil makes decisions about industrialized products, or in the service industry. Of course, we could improve when the United States takes a position about what kind of subsidy will be reduced, or the European Union could say, if they're going to accept or not agricultural goods — reduce the subsidy so that the markets of the less developed countries could have market access to Europe.

If we don't reach an agreement, Brazil will continue to follow the path that it's followed: working, producing more, and selling, and also buying. But certainly, those that will suffer more will be those that don't even have the opportunity to participate in the meetings that other countries have the power to do so.

I have made these appeals, and I believe that that's why I said, leaving here, leaving Camp David, I'm leaving here very satisfied because this was an extraordinary and productive meeting, because I heard the intention of the American government on this issue. Our is — we have full willingness, and I believe that if we work together, the U.S. and Brazil, to try to convince our European partners, I believe that we can reach an agreement.

And I believe that, in this case, there's no B plan; either we have the A plan, or there's no agreement. And if there's no agreement, certainly we will not have winners or losers — everybody will lose. Everybody will lose. The rich, because they will be liable for what will happen in a poorest [sic] world.

PRESIDENT BUSH: All our trade discussions have centered on completing Doha. It's the only discussions I've had with the President. I've been asked about Plan B's before, on different subjects. And that kind of means you're willing to retreat. I'm a Plan A man, just like the President is. Let's get the job done.

And for the United States, we're willing to reduce our agricultural subsidies in a substantial way. We understand. On the other hand, we expect our goods and services — whether they be agricultural goods or manufactured goods — and services to be given access to markets. The interesting thing is, is that Brazil is a strong exporter, and it's in Brazil's interest that their goods and services be — have access to markets, as well.

This is a difficult negotiation because there's a variety of interests. And step one is — to be successful in these complex negotiations, is there a genuine desire to succeed. In other words, are people just showing up for the sake of showing up, or are people actually coming to the table with a genuine desire to succeed? I assured the President again that the United States has a genuine desire to succeed in these talks. I do, because I believe that, one, I think the world has a tendency at times to become isolationist and protectionist. In other words, that movement, that isolationist movement can become prevalent. And if that were to happen, it would make the world a lot more unstable, and it would make the world more poor.

I'm going to repeat what I told you earlier: Ours is a very compassionate nation. We deeply care about the human condition around the world. And I firmly believe that the best way to alleviate world poverty is through trade. That's what I believe. It's not the only way, but it is the best start — let me put it to you that way — coupled with health initiatives that we're working on, food initiatives that the President described. But if you're generally [sic] interested in eliminating poverty — and I am — commerce, trade, opportunity and hope will all flourish with the completion of the Doha Round.

So we are seriously involved. Now, what we won't do is accept a unilateral deal. And the President has never asked us to do that, that's not his intention. His intention is we want to work together to make sure all are treated fairly. I certainly hope that's the case with the rest of our potential trading partners and our negotiating partners, that they don't expect the United States to carry the entire load in making sure the agreement moves forward.

So we strategized together. Our ministers will talk a lot. Ambassador Schwab stayed behind in S o Paulo to converse with her counterparts. There is a lot of work going on. And I believe there's a good chance we can complete the round.

And so, therefore, your Plan B will be irrelevant, I hope.

Q Mr. President, the Iranian hostage crisis has just entered its 9th day. Would the British be within their rights to consider a military option if the crisis drags on? And would the U.S. have considered it an act of war if it had been U.S. sailors and Marines who had been taken? And would you consider trading the five Iranians who were captured in Irbil back in January if it would help resolve the crisis?

And, Mr. President, did you see eye-to-eye with the President on global warming? Would you say that you two agree that global warming is a problem? Thank you.

PRESIDENT BUSH: Let me start with global warming. One reason you promote alternative fuels 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 environment — just to make sure I'm on the record here.

The Iranian issue is a serious issue. It's serious because — the British hostages issue is a serious issue because the Iranians took these people out of Iraqi water. And it's inexcusable behavior. And I strongly support the Blair government's attempts to resolve this peacefully. And I support the Prime Minister when he made it clear there were no quid pro quos. The Iranians must give back the hostages. They're innocent, they were doing nothing, and they were summarily plucked out of water. And it is — as I say, it's inexcusable behavior.

PRESIDENT LULA: Well, I believe that we are in agreement in relationship to the policies that we have to undertake so that we should be more careful and take better care of the environment. And on the climate change issues discussions, we have common interests. What happens is that — to know the timing and what to do. Now, in the case of Brazil, we already have 25 percent of ethanol, or better to say, 23 percent of ethanol blended, or as a blender, in gasoline for a long time. Now we have a flex-fuel engine, a car moved by flex-fuel engine that can use 100 percent of gas or 100 percent of ethanol or 50 percent of alcohol, 50 percent of ethanol as blended.

So this is the road where we start to de-pollute. And then it's not only the ethanol issue or the biofuel issue. There is also the electrical hydro-power plants. We also have to have the responsibility to build thermal plants based on coal, moved by coal. And so it's essential that the company should invest more in reducing gas emissions.

So the fact of the matter is the following: that the climate change issue today is a severe disease. There's no social sector that it doesn't reach. It will reach all the planet as a whole. There's no way for us to escape. So we have not managed yet to reach Mars, and the moon is not a proper place for us to live. So either we take care of planet Earth very carefully, as we take care of our sons, or all of us will regret that in the future. And although, those already my age — I'm with 61 years of age, but I have grandsons, and I want to have grand-grandsons, and so I want them to have the pride that their grandfather helped to build a better world, better than I received from my father.

So I believe that all of us will reach an agreement that it's necessary and very much so the responsibility and liability in the discussions on climate issues than we have had up until today. The evil is facing us — and we see the evil and we feel the evil, but there's no way that we can turn our back to that.

Q The American government last week manifested a lot of concern with the investments of some foreign companies in the oil industry in Iran. And this week, the American Ambassador in Brazil made it very clear that this concern also extends to Petrobras investments, that Petrobras considers strategic. So I'd like to ask President Lula if in his assessment, Petrobras should continue to make businesses with Iran, or should get away from Iran, like the United States would like us all to do?

So, and I would like to ask President Bush, why does the United States want Petrobras to be out of Iran if the country has fulfilled all its sanctions that was passed by the U.N.?

PRESIDENT LULA: Well, I am convinced that Petrobras will continue to invest in oil prospecting in Iran. Iran has been an important trade partner for Brazil. They buy from us more than $1 billion, and they almost sell anything to us. So I'm an advocate that trade, fair trade is the trade that you buy and sell — you sell and buy. You can't just sell.

And then there's also political issues in each country. Each country faces their own domestic issues. But up until now, Iran has not been a victim of any sanction that was proposed by the U.N. I know that there's political divergence on this between Iran and other countries, but with Brazil, we have no political divergence with them, so we will continue to work together with Iran on what is of the interest of Brazil. I don't see any major issue to do it in a different way.

PRESIDENT BUSH: Every nation makes the decisions that they think is best in their interest. Brazil is a sovereign nation; he just articulated a sovereign decision. And as you mentioned, the trade that you were discussing was not in violation of any U.N. — in any U.N. mandate.

Our position is that we would hope that nations would be very careful in dealing with Iran, particularly since Iran is trying to develop a nuclear weapon, and a major threat to world peace is if the Iranians had a nuclear weapon. And that is why there are sanctions imposed at the United Nations as a result of collaboration between the United States, EU, China and Russia, to make it clear to the Iranian regime that there is a better way forward other than isolation.

We have no problems with the Iranian people. As a matter of fact, the United States highly respects the people of Iran. We respect the history of Iran, we respect the rich traditions of Iran. We, however, are deeply concerned about an Iranian government that is in violation of international accords in their attempt to develop a nuclear weapon. And therefore, whatever comments you hear reflect that concern. And we will continue to work with the international community to say that it is in the world's interest that Iran not develop a weapon. It is in the interest of peace that they not develop a weapon.

And I'm hopeful that the people of Iran will be tired of the isolation. I would hope that there would be some rationality amongst their leaders in choosing a better way forward for the people. They're depriving their people of a lot of opportunity.

Now, having said that, the United States does believe that it's in our interest that we have people-to-people exchanges. As I say, we have no problem with the Iranian people. As a matter of fact, we just sent a wrestling team to Iran, all attempting to make it clear to the Iranian people that we're interested in having a constructive relationship, and it is the decisions of their government that are preventing that from happening.

According with the calculations made by the Brazilian National Confederation of Agriculture and Livestock (CNA), Brazilian agribusiness will not earn this much per year due to the subsidies.

The annual WTO report for the year of 2006, released yesterday, July 24, states that the world governments direct per year US$ 1 trillion in subsidies, of which about 40% go to agriculture.

In spite of the report admitting that the subsidies cause distortions in the world market, the organization and the member countries weren’t able to advance in the negotiations to reduce them in the meeting of the Doha Round, which took place during the weekend in Geneva.

"This indicates that the subsidies will continue, they won’t be reduced," says the technical advisor of the National Committee of Foreign Trade at the CNA, Antônio Donizete Beraldo.

"The developing countries are the ones that will suffer the most," adds the secretary-general at the Arab Brazilian Chamber of Commerce, Michel Alaby. According to Beraldo, Brazil won’t win in a sector in which it is extremely competitive.

Beraldo mentions that the ones to suffer greatest damages are the beef, sugar, ethanol, rice, cotton and soy producers. Should there be an agreement at the WTO on the world agricultural market, Brazil could export US$ 53 billion per year, according to the technical advisor at the CNA.

Currently, Brazilian agribusiness earns about US$ 43 billion with exports. "We cannot grow as we don’t have someone to sell to," states Beraldo.

The interruption of the Doha Round, according to him, caused a crisis at the WTO. The secretary-general at the Arab Chamber states that there was lack of command in the organization.

"It was expected that the WTO could at least reach a minimum agreement to benefit the developing countries, but what we saw was failure. I fear that the WTO is burying itself alone," says Alaby. The country that compromised the agreement the most, according to the secretary-general, was France.

The Doha Round is trying to establish new rules for three areas: access to markets, domestic support and subsidies to exports. In the discussion on access to markets, the countries weren’t able to reach a consensus on the foreign tariff on agricultural products trade.

While the European Union suggested a reduction in 39%, the G-20, group of developing agricultural countries of which Brazil is a member, suggested 54% and the United States 66%.

The reduction would be applied on the values of the tariffs each country has registered at the WTO as their current tariff. In practical terms, however, it doesn’t quite work out that way, as many countries have registered in the organization tariffs that are higher than what they practice, so that in the case of a reduction, they won’t be at a loss.

Domestic support is the value each government directs to their farmers, which is made on a large scale by the United States. The North American country’s suggestion at the WTO would be to reduce this support from US$ 47.4 billion to US$ 22.4 billion.

But according to Beraldo, this doesn’t really mean a reduction since the United States registered at the organization a value a lot higher than the support they give out in fact. Today the country directs US$ 21.4 billion in subsidies to the farmers, which makes the reduction suggested null.

In the field of subsidies to exports things didn’t progress either. With the interruption of negotiations, the date set for ending the practice – the year of 2013 – was also disregarded.

Anba – www.anba.com.br

Since the start of the meeting on Friday, June 30, the Brazilian Minister of Foreign Relations, Celso Amorim, declared several times that he failed to observe "any significant progress" in the negotiations.

Brazil wants a commitment on the part of the United States and the European Union to reduce export incentives and domestic farm subsidies.

"The European Union is getting closer to our position. But we still haven’t reached the point of negotiation," Amorim commented in a press conference reproduced on the WTO website.

In the chancellor’s view, Europe must spell out the details of its proposal to lower agricultural duties by up to 51%, as well as informing whether the products that are of interest to Brazil will be included in the cuts or treated as exceptions.

The European proposal also depends upon a positive gesture by the United States, and so far there has been no such indication. The European Union and the members of the G20, a group formed by 20 developing countries, call on the United States to lower its annual level of farm subsidies to US$ 12 billion. The US negotiators refuse to accept this demand.

The G20, which is led by Brazil, insists on greater sacrifices by the rich countries to enact the Doha agenda, which is aimed at the development of less industrialized countries.

"It is not up to the developing countries to take the lead in this process," Amorim argued.

In order for agricultural products from developing countries to be able to compete and penetrate other markets, the G20 considers it crucial for the rich countries to do away with subsidies. The group presented a timetable in which such incentives are frozen and substantially reduced by 2010 and completely eliminated in 2013.

Anticipating the stalemate at this weekend’s meeting, Brazil has already proposed that political leaders place the matter on the agenda of the meeting of the G8 (the seven wealthiest countries and Russia) scheduled for this month in Saint Petersburg, Russia. Developing countries, including Brazil, have been invited to attend the meeting as guests.

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"To reach an agreement you need to give and receive, and this demands an effort from both sides. We’re ready to do our part", said Chirac interviewed by the Brazilian Globo network.

Brazil a first line global exporter of farm commodities leads the struggle in the World Trade Organization, WTO, against EU and US agriculture subsidies, which it argues "gives European and American farmers an unfair hedge in world trade".

France on the other hand is the main beneficiary of EU farm subsidies.

"We’re ready to advance further. That is the spirit of the agriculture reform in the EU which seeks the elimination in a prudential time of all subsidies that can destabilize exports in agriculture terms," said Chirac.

In Paris, WTO head Pascal Lamy said it was not too late to save the Doha round talks, if the US, Europe and developing countries make concessions regarding tariffs and subsidies.

The Doha round time is coming to an end since in July 2007 expire the US presidency "fast track" powers which force Congress to accept or reject international trade agreements as a whole package.

Actually this week the EU said it was willing to move toward developing countries’ demands by making bigger cuts to its import tariffs.

The tentative offer by the European Union came at a Paris meeting of ministers and senior officials from key trade powers, less than a month before a crunch deadline in the Doha round of World Trade Organization talks, which has come to a near standstill over agriculture.

The EU had previously offered to cut tariffs on farm goods by an average 39%, well short of both the 54% demanded by the G-20 group of developing countries and the 66% called for by United States.

Top EU trade negotiator David O’Sullivan confirmed Wednesday in an interview with The Associated Press that Brussels has told trade partners it is now ready to go further.

"We would be willing to look at our offer and move towards, but not to, the G-20 position," said O’Sullivan, who reports directly to EU Trade Commissioner Peter Mandelson.

But he stressed the improvement of the EU’s offer was conditional on new U.S. subsidy cuts and moves by developing countries to open their industrial goods markets.

Mercopress – www.mercopress.com

According to Brazil’s Minister of Foreign Relations, Celso Amorim, the two countries concurred that political will and a mutual effort by rich and poor countries will be required for an agreement to take shape in this area.

"We are ready to talk, but it is just an exploratory conversation, since Brazil isn’t negotiating with the United Kingdom. The negotiation involves the G-20 (the group of 21 developing countries), Europe, and the United States," Amorim remarked.

According to the Brazilian Minister, Blair also expressed interest in a meeting between leaders of the countries that make up the G-8 (the group of developed countries) and the G-20 to unlock the Doha Round discussions, which are dealing with this matter in the World Trade Organization (WTO).

Lula also participated in the Progressive Governance Summit, a meeting in Pretoria of seven heads of State, including the United Kingdom, Sweden, and South Korea.

Agência Brasil

"Harvest costs will be lower this year than they were last year. Either because of a smaller cropland, which may reduce supply and affect prices, or due to changes in government macroeconomic policy which shows signs of being more flexible next year. I believe the worse is over," said the Minister.

Rodrigues said this year’s crisis in the sector was due to various problems. "It was a hard year. There was drought in the south and high interest rates and tight credit everywhere.

The exchange rate ate up the farmer’s profit margin. And then there was the problem of isolated cases of foot and mouth disease that reduced our beef exports by almost US$ 110 million."

Chirac and Farm Subsidies

Earlier this month, the President of France, Jacques Chirac, telephoned Brazilian President Luiz Inácio Lula da Silva for a conversation on farm subsidies.

Chirac wanted details on the Brazilian proposal that would be presented at a future summit to deal with the issue.

Lula suggested the summit to the president of the United States, George W. Bush, and British prime minister, Tony Blair, earlier this year, before the Hong Kong WTO conference.

Chirac is scheduled to visit Brazil in April or May of next year.

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