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DE RUEHSO #0554 1731357
ZNR UUUUU ZZH
O 221357Z JUN 07 ZDK
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7161
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 8263
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8175
RUCPDOC/USDOC WASHDC 2818
UNCLAS SAO PAULO 000554
SIPDIS
SIPDIS
STATE INR/R/MR; IIP/R/MR; WHA/PD
DEPT PASS USTR
USDOC 4322/MAC/OLAC/JAFEE
E.O. 12958: N/A
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MIDEAST: GLOBAL ECONOMY: WTO AND DOHA ROUND, G-4 TRADE
MINISTERS MEETING IN POTSDAM; SCO PAULO
1. "Double Loss"
Influential center right national circulation daily O Estado de S.
Paulo's economic columnist Celso Ming commented (6/22): "If it is
true that a bad deal is preferable to no deal, then the failure of
the Postdam meeting to advance trade negotiations signals a double
loss for Brazil: because it will now be pointed out as one of the
responsible parties for the fiasco, and because it bet all its chips
on a multilateral trade agreement that has now become much more
difficult to reach.... Technical reasons for the blocking of the
negotiations are the usual ones. Both the United States and the
European Union refused to reduce agricultural subsidies to a minimum
to satisfy the emerging nations. And the latter resisted reducing
import tariffs on industrialized goods and opening their market to
the service sector. As happens in all trade negotiations of the
type, one cannot guarantee that the failure is a final one.
Sometimes, things have to worsen much more to begin to improve. If,
by the end of August, nothing new changes in the current scenario,
then it will be very difficult to make progress before the
completion of a six-year deadline, because political conditions both
in the US and India will tend to embitter."
2. "The 'No-Agreement' in Doha Round"
Institute of Trade Studies and International Negotiations' president
Andre Meloni Nassar wrote in business-oriented Valor Economico
(6/22): "The fundamental change in the negotiating process, which
surprised an unprepared Brazil, emerged when the US joined Europe
looking for balance outside the agricultural negotiation. Being
pressured by Brazil to make concessions in subsidies and access to
markets, both the US and the EU chose Brazil's industrial sector as
the balance element. At that moment, the defensive balance that was
being outlined was broken. And if we can attribute to the GOB a
fault in its strategy, that mistake occurred because of its
timidness in regards to India's demands regarding flexibility....
The G-4 ministers were marching on the thin line separating two
types of agreements: a minimum, realistic and little ambitious
agreement, which the GOB aimed for, and the 'no-agreement,' which
was the veiled option being supported by a significant number of
developing nations and, after yesterday's outcome, by the US and the
EU."
3. "Doha Round failure"
Former Brazilian Ambassador in Washington Rubens Barbosa maintained
in influential center right national circulation daily O Estado de
S. Paulo (6/22): "The failure in the multilateral trade negotiations
was not a surprise. A US Democratic Congress would hardly give
President Bush authorization to negotiate trade agreements, when the
Republican majority denied fast track mandate to Clinton eight years
ago. Elections in France, the pre-electoral climate in the US and
the Congress' negative attitude in regards to reviewing US subsidies
also helped to create a more protectionist than favorable climate
for free trade. It is hard to accept that Brazil is presented as one
of the responsible nations for the failure in the talks.... Brazil
neither subsidizes nor protects its agricultural production. The GOB
and its private industrial sector signaled that they could make
concessions if and when the US and the EU presented proposals
representing real gains for the Brazilian agricultural sector. As
that did not happen, it is better not to have an agreement than to
have a bad agreement."
McMullen