MEDIA REACTION: DOHA ROUND, USTR SCHWAB IN BRAZIL; SAO

UNCLAS SAO PAULO 000829 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: MEDIA REACTION: DOHA ROUND, USTR SCHWAB IN BRAZIL; SAO PAULO ¶1. "Truculence in Trade Negotiations" The lead editorial in center-right O Estado de S. Paulo (7/29) opined: "Among other topics, USTR Susan Schwab and Foreign Minister Celso Amorim are expected to discuss conditions to reactivate the Doha Round. But the terms of the bilateral cooperation in this case are not clear, because the arrival of the US trade representative was preceded by a warning gun salute fired by Senator Charles Grassley [who] suggested that the US should retaliate Brazil and India for, according to him, having hampered the round's conclusion. Everyone knows that the negotiations stuck mainly because of the impasse between the US and the EU about agricultural policies.... The GSP is a unilateral concession and therefore the Americans may remove it in its next renewal, in December. It's their right. But it is also right to affirm that this benefit far from offsets the losses imposed on other nations resulting from subsidies given to the US agricultural sector and by the frequent imposition of highly arbitrary trade barriers.... In a remarkable coincidence, Ambassador Schwab is expected to ask the Brazilian minister to convince the Indian government to open its market to imports of agricultural products.... It is clearly excessive to focus on India's agricultural policy as the main obstacle to the Doha Round's success. The US responsibility in this aspect is much greater. If the USG recognizes this fact, it will be much easier to reactivate the round. If not, it will subordinate its policy to Senator Grassley's interests." ¶2. "Empty-handed" University Professor Marcelo Paiva de Abreu maintained in center-right O Estado de S. Paulo (7/31): "Everything indicates that the suspension of the Doha Round ministerial negotiations has jeopardized the deadline established for the conclusion of the talks because it is incompatible with the requirements of the US political agenda, especially in regards to the TPA's term. Unless unexpected spectacular developments occur, the most likely outcome is a postponement of the conclusion of the current negotiations for two or three years, but it will depend on an optimistic hypothesis that the US Congress' will be wiling to approve a future fast track.... Only the most radical supporters of agricultural protectionism in the US Congress are considering that Brazil is responsible for the impasse, since it resisted Washington's subsidies cut proposal that maintains them on the current level.... Will bilateral agreements be capable of replacing multilateral negotiations? It is difficult to believe that Mercosul's talks with the EU have been facilitated by Venezuela's entry in the South American bloc." ¶3. "Doha: Victory Or Defeat?" Former Minister of Finance Luiz Bresser Pereira wrote in liberal, largest circulation daily Folha de S. Paulo (7/31): "Contrary to what has been said, the suspension and virtual failure of the Doha Round represented more a victory than a defeat for Brazil. The ideal would have been a great reduction in agricultural subsidies in exchange for a small diminishment of industrial tariffs and minimal concessions in the area of services, but the alternative being supported by the US, Europe and Japan was opposed, and in that case the damage to Brazil would have been greater. Such harm was avoided because Brazilian diplomacy was able to define and defend the developing nations' interests.... In view of the Doha Round fiasco, some say that the alternative for Brazil is bilateral agreements. There is no doubt about that but everything will depend on the quality of the agreements." ¶4. "A World Of Subsidies" Center-right O Estado de S. Paulo (7/29) editorialized: "Governments around the world spend much more than one could have imagined so far in subsidies given to agricultural, industrial and services sectors. According to a WTO report, such subsidies may total USD 1 trillion annually.... The study clearly shows that the developed nations are the ones that most use the taxpayers' money to subsidize different sectors of the economy.... Actually, it was the impasse on this topic that caused the collapse in the Doha Round negotiations. Subsidies given by rich nations to agriculture range between USD 230 billion and USD 280 billion every year.... A great part of the world's economy works only based on subsidies.... Agricultural products exporting nations like Brazil have been harmed by this practice. Brazil is one of the nations that give least subsidies to the private sector.... Brazil is also one of the few nations that reveal the sectors that receive governmental assistance." McMullen