Brazil Summary
Brazil and the G20
Brazil has emerged as a major voice in trade negotiations, especially within the context of the Doha Development Round. Along with India, Brazil has been a principal agent in the mobilization of the G20, a block of developing nations joined to protect their common interests against the alleged disproportionate weight of developed nations in the multilateral negotiating forum. Brazilian Foreign Minister and key negotiator Celso Amorim has been the group's foremost voice and along with Brazil's left-leaning president, Luiz Inácio Lula da Silva, has emerged as a leading advocate for the interests of the developing world.
In addition to the formation of the G20, Brazil is making efforts to establish other sites of south-south co-operation. With Brazil's market already at the center of the South American trade bloc, Mercosur, growth for its market demands looking beyond South America. South Africa has been a focal point, especially in the context of slow moving negotiations with the north. [1]
Labor Standards
Brazil has traditionally pursued economic growth through rapid trade liberalization, generally opposing labor standards and considering them a possible mechanism for protectionist policies. With the election of Brazil's first working-class president in January 2003, it was uncertain where the former labor leader would guide Brazil on the issue of labor standards. Despite expectation for leadership, Brazil has not pushed labor standards as a primary issue in trade negotiations. Perhaps overshadowed by concerns surrounding agricultural negotiations, labor standards received surprisingly little mention in the urgings of the G20 and the voice of the Brazil in other contexts. This reticence may also be explained by the financial crisis Brazil experienced following Lula's election, when international investors, frightened by Lula's socialist reputation, divested capital from the country. Lula's government has responded by embracing a greater degree of orthodoxy than had been expected of the administration. [2] Perhaps as Brazil's financial situation stabilizes and more headway is made on agricultural trade issues, we will see the emergence of Lula's labor interests in Brazil's trade negotiations.
Anti-dumping Regulations and Dispute Settlement
Brazil has been particularly active in utilizing the WTO to handle lawsuits directed at allegedly protectionist policies maintained by the developed world. It has pushed for reforms of the WTO Agreement on Subsidies and Countervailing Measures in order to keep the WTO from "stacking the cards against some members, in particular against developing countries," according to Brazilian ambassador to the WTO Seixas Correa. [3] In addition, Brazil has directly challenged the policies of the world's two trade superpowers, the US and the EU, initiating dispute settlement processes against them. As these complaints are significant first efforts to engage the WTO in challenges to the traditionally dominant interests of the industrialized world in trade negotiations, their outcome will set critical precedents for multilateral dispute settlement. In July 2002 Brazil joined seven other WTO members in lodging a complaint against US tariffs on steel imports. The resulting ruling enabled other nations to impose retaliatory restrictions on trade with the US, ultimately swaying President Bush to drop the steel duties in December 2003. In addition, Brazil has joined with Australia and Thailand to formally challenge EU sugar subsidies. Brazil has also been mounting a challenge to US cotton subsidies, objecting specifically to the 2001/02 level of $3.9bn in cotton subsidies distributed in the US, citing them as the single biggest force driving down world prices. [4] A decision in the cotton case is expected in early spring 2004.
Intellectual Property Rights and Public Health
Developing countries, led by Brazil, have traditionally pushed for better access to cheap medicines, while the US and other industrialized nations have fought to protect their pharmaceutical sectors' patents and underlying incentive structure. In August 2003, a WTO agreement was passed allowing developing countries to import generic versions of patented medications in order to treat serious epidemic diseases like HIV/AIDS, tuberculosis, and malaria. For years, Brazil has maintained a hugely successful AIDS treatment program, in which it has provided domestically produced medication to its AIDS patients free of charge. The agreement now allows Brazil and other nations with the capacity to produce generics to export the drugs to nations in need. [5]
Agriculture
As the world's largest exporter of agricultural commodities such as coffee and sugar, Brazil supports the broad-scale liberalization of agriculture laws. It has joined with the G20 to push for the elimination of production and export subsidies as well as for maximum possible reductions in "trade-distorting domestic support"--price-support programs maintained in developed countries that tend to cause overproduction resulting in depressed world market prices. While Brazil is advocating for improved agricultural market access across the board (that is, the elimination of such support programs by all WTO members), this position is not unanimous among members of the G20. Some members, whose agricultural sectors are not as competitive as Brazil's, feel threatened and are demanding greater flexibility in the administration of support programs.
The G20's outspoken rejection of the draft ministerial text due to insufficient progress in agriculture, and its uncompromising stance are often cited as two fundamental reasons for the breakdown of talks at the Cancun Ministerial Meeting. Brazil's agricultural concerns have also arisen in negotiations with the US for the establishment of the Free Trade Area of the Americas (FTAA): Brazil and the US, the two major economies involved, recently came to a deadlock. The US insists on reserving the difficult area of agricultural negotiations for WTO negotiations, while Brazil is unwilling to make concessions on services, investment, IPR's and government procurement without the inclusion of agricultural negotiations in the FTAA. This deadlock was apparent at the November FTAA conference in Miami, which made little meaningful headway in negotiations. (See the GTN Regionalism Page)
Conclusion
Recently, Brazil has demonstrated a powerful influence in regional and global trade negotiations. Many developing nations laud Brazil for its strong stance, and credit the country for revolutionizing the dynamic of global trade negotiations. However, among much of the developed world, Brazil is gaining a reputation as a spoiler-more likely to hamper than to ease trade negotiations. Having been cast as a villain in two major trade conferences, some countries perceive Brazil's unyielding posture as detrimental to the interests of multilateral negotiation, having compromised the faith of some major players' in the efficacy of such efforts. However, the alternative of pursuing bilateral negotiations is widely recognized, due to a stark power imbalance, as being even less sympathetic to the interests of the developing world.
To what extent are Brazil's actions creating and perpetuating the current polarized atmosphere of the WTO and preventing much needed progress in the negotiations? Maintaining such a firm stance could stall negotiations and undermine the very interests it is seeking to promote. But to jettison the firm ideological stance it has held in recent talks would be to alienate many supporters, who have come to rely on Brazil as a powerful spokesman for their interests. Brazil's central challenge in the coming months and years is to strike a balance between being an unyielding advocate for developing country interests and a willing negotiator helping to move this round of negotiations towards completion.
[1] "SA and Brazil find common ground on trade strategy." Johannesburg Business Day. 25 June 2003.
[2] "Lula's dreams for Brazil are delayed as the realities of power hit home" The Guardian. 30 December 2003.
[3] "Trade: WTO Rules against Canada in Dispute with Brazil" Inter Press News Service, 19 February 2002.
[4] For more on this case, see "Cultivating Poverty: The Impact of US Cotton Subsidies on Africa." Oxfam Briefing Paper 30, page 2. September 2002.
[5] "WTO deal on cheap drugs ends months of wrangling in Doha Trade Round." The Financial Times. 28 August 2003.
Last updated March 2004
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