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Brazil divided over more concessions in Doha talks

Written by: Staff
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BRASILIA, Brazil, Apr 17 (Reuters) Brazil's farmers and industrialists are divided over whether the Latin American economic giant should offer further cuts in tariffs as pressure grows for a Doha global trade accord deadline to be reached.

European trade officials this month said that developing countries like Brazil and India must open their industrial market before the EU could discuss opening its farm markets.

Brazil's captains of industry say they have done enough. But farmers, who have been in the forefront of an export boom, are anxious for a deal to be sealed.

''A collapse of the talks would be terrible. We need new markets and less subsidizing to stem global prices,'' said Glauber Silveira, a soybean farmer in Mato Grosso state, the heart of Brazil's grain belt.

Despite a flow of exports of soy, sugar, meat and other products, many farmers have lost money for the past two years due mostly to currency fluctuations and a weak soybean price.

''A trade deal would help with the financial troubles of many farmers here,'' Silveira said.

Brazil was instrumental in raising the banner of freer farm trade in the Doha Round, forming the G20 group of developing nations as a counterbalance to the trade interests of rich countries.

But negotiators in the World Trade Organization have made little progress before the April 30 deadline to agree on tariff cuts on farm and manufactured goods and a cut in domestic farm subsidies -- a step to securing a wider deal lowering global commerce barriers.

The big trade blocs -- the United States, Europe, and the G20 - are each demanding the others make further concessions and help break the impasse. Negotiators will meet again in Geneva this week to try to bridge the gap.

''I have no hope, I don't see the political climate for a meaningful accord,'' Gilman Viana Rodrigues of the National Agriculture Confederation,'' told Reuters.

He said failure would be frustrating for rich countries but tragic for poor countries.

''Farmers there would be in a comfortable situation with their subsidies and all, we would not.'' In Brazil's industrial capital Sao Paulo, sentiment about the Doha round is different.

''We don't think the round needs to be completed at any cost,'' said Fernando Pimentel, superintendent at the Brazilian Textile Industry Association. ''Bilateral trade negotiations meet our interests better than this collective round.'' The predominant view among industry leaders is that Brazil has already cut industry tariffs sharply over the past decade and a half, and made a generous offer in the Doha Round to reduce its average tariffs by another 50 percent.

Customs duties in the last 15 years have come down from above 80 percent to an average applied rate of 10.5 percent, according to the Sao Paulo industry federation Fiesp.

''There is currently no reason to bring forward any additional concessions in the absence of significant improvements in agriculture (proposals),'' Fiesp said in a paper last month.

The farmers disagree.

''We should further lower our industrial tariffs,'' Rodrigues said. ''The foreign ministry knows we are not satisfied with its negotiating position.'' Brazilian entrepreneurs also blame their own government for their reluctance to agree to more cuts in industrial tariffs.

''Taxes are exorbitant, infrastructure is poor, and the red tape is overwhelming,'' said Guilherme Duque Estrada, executive vice-president of the Brazilian Chemical Industry Association.

''People are hesitant to support deeper tariff cuts because they fear the government wouldn't do its part to become more competitive,'' he said.

REUTERS CH RN2322

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