Brazilian business leaders urge new trade strategy

BRASILIA, June 22 (Reuters) Brazil should change its negotiating strategy after talks collapsed between four of the big players in the Doha round of world trade talks, business leaders said.

Brazil, India, the United States and the European Union failed to agree earlier yesterday in Potsdam, Germany, on how to open agricultural and industrial markets and cut rich nation farm subsidies.

Experts said it would now be hard for the full 150-member state World Trade Organization to meet an end-July target for a a broader deal.

Leaders from Brazil's highly competitive farm sector, which stood to gain most from a World Trade Organization accord, said the government should change tack.

''It's time to rethink our strategy: we put all our chips on the WTO and now we'll be the big losers,'' said Antonio Donizeti, international trade adviser with the agriculture confederation CNA.

A complete collapse of WTO talks would be particularly damaging during an upswing of the global economy, said Homero Pereira, member of the congressional farm lobby and head of the large agriculture federation Famato.

''It's extremely frustrating. This collapse hurts more because we are in the middle of a commodity boom and Brazil's farm sector could have benefited enormously with new market access,'' Pereira said.

Brazil was a leader in forming the G20 group of developing nations that was to push rich countries to allow freer farm trade.

LOOKING BEYOND WTO Industry leaders still hoped for a successful conclusion of the so-called Doha round but also urged their government to look beyond the WTO.

''The big lesson for Brazil is to start looking for other options, such as bilateral talks with the European Union, Mexico and even the United States,'' said Fernando Pimentel, director of the textile association ABIT.

''We cannot wait for multilateral talks to progress.'' US officials blamed rigidity from India and Brazil for the breakdown of the talks. The Brazilian government made no immediate comment from Brasilia but Foreign Minister Celso Amorim said in Potsdam that the the rich countries were demanding excessive tariff cuts for manufactured goods.

The Sao Paulo industry federation Fiesp, one of the most influential business groups, said talks failed because the United States and Europe offered too few concessions.

An ''ambitious and balanced'' accord was fundamental and a priority for Brazil, it said.

The problem is that Brazil may have to play catch-up in bilateral talks with less leverage than it had before.

''While other countries pursued bilateral talks, Brazil fell behind,'' Pimentel said.

CNA's Donizeti said that from now ''we'll now be more fragile negotiating with Europe because they prefer Asia and we have to carry the political burden of Venezuela.'' Critics say the planned entry of Venezuela, which opposes US efforts to liberalize trade, into the South American customs union Mercosur could scare off potential trading partners.

REUTERS PDS BST0515