Brazil must agree to open its industry to foreign competition

By Staff
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Google Oneindia News

RIO DE JANEIRO/SAO PAULO, Brazil, April 1: Brazil must agree to open its industry to foreign competition to break a deadlock in talks on creating a global trade pact, the head of the World Trade Organization said on Friday.

WTO Director-General Pascal Lamy delivered his message to Brazilian businessmen in the financial capital, Sao Paulo, as key players in the Doha Round of talks gathered in Rio de Janeiro to explore ways to make a breakthrough in the faltering process.

They are struggling to reach an April 30 deadline for overcoming differences on cutting tariffs on farm and manufactured goods, a vital part of the Doha Round that started in 2001 with the aim of creating a new world trade order that would raise millions of people from poverty.

But Lamy added a note of urgency in his speech in Sao Paulo before he flew up the Atlantic Coast to join the Rio talks.

''Brazil and the United States consider that the EU proposal is unsatisfactory regarding access to the agricultural market.

Brazilians and Europeans consider the North American proposal to reduce farm subsidies insufficient. The United States and EU think Brazil's offer to cut industrial tariffs is insufficient,'' he said, summing up the imbroglio.

But Brazil should drop its insistence on keeping tariffs to protect its industry, Lamy said.

''I am completely convinced that you will have to move beyond (Brazil's current offer),'' he told a group of some of the country's most powerful business leaders, a number of whom do not welcome the prospect of more competition.

He also repeated calls for the United States and Europe to sweeten their offers to open farm markets to encourage a move by Brazil, an agricultural powerhouse that leads developing nations in the talks.

In a game of brinkmanship, all sides say their proposals have gone far enough.

The poor countries want big concessions from the rich on farm exports, saying trade barriers are hurting their people.

The rich countries want greater access for their manufactured goods and services such as banking.

The meeting in Rio -- a city of brutal contrasts between rich and poor -- was billed as informal, with the host nation playing down expectations.

NEED DEAL BY YEAR'S END

Brazilian Foreign Minister Celso Amorim told reporters after meeting EU Trade Commissioner Peter Mandelson: ''We are going to talk about the subjects but this is not a negotiating meeting.'' The results would be circulated among other trade and negotiating blocs in the 149-country WTO, he said.

An EU official said Amorim, Mandelson and U.S. Trade Representative Rob Portman would focus on three issues -- E.U.

farm import tariffs, U.S. farm subsidies, and the industrial import tariffs of the G-20 group of developing nations.

Talks in Geneva and London in March made little progress but the parties are anxious to reach a pact on lowering barriers by the the year's end, after which U.S. President George W. Bush will lose his authority to sign off on deals without Congressional approval.

Outside the meeting venue, the beachfront Copacabana Palace Hotel, about 100 rural workers and farmers protested noisily.

''We are very worried by this meeting. We're looking for safeguards for our goods,'' said Gilmar Pastorio, a leader of the National Congress of Family Farmers.

An accord would be good for big agricultural operations but small farmers could lose out, he said.

In Sao Paulo, Paulo Skaf, president of the powerful industrialist organization Fiesp, reacted to Lamy's appeal saying: ''Agriculture is industry. The distinction between agriculture and nonagricultural sectors on the field of negotiations does not reflect the productive reality in Brazil.''

REUTERS

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