International Trade Daily | August 29, 2001 | By Ed Taylor
RIO DE JANEIRO--Brazilian officials expressed dissatisfaction with an invitation from the Office of the U.S. Trade Representative to open "four-plus-one" trade talks in September with the Southern Common Market (Mercosur). The statement out of Washington came on Aug. 22, the same day that the International Monetary Fund announced a new loan package for Mercosur member Argentina. Top Brazilian officials responded Aug. 23 by accusing the U.S. Treasury Department of attempting to link the IMF accord with the proposed round of U.S.-Mercosur trade talks.
A proposal made by the Mercosur at the start of August calls for reviving a 1991 agreement known as the Rose Garden accord. This was the first international agreement signed by the Mercosur and establishes the norms for consultations between the United States and the Mercosur customs union, which comprises Argentina, Brazil, Uruguay, and Paraguay.
Georges Lamaziere, the press secretary to Brazilian President Fernando Henrique Cardoso, said Aug. 23 that in the opinion of Cardoso, the IMF-Argentina agreement has nothing to do with proposed negotiations between the United States and the Mercosur.
TPA Seen as Key to Talks
Brazil's Foreign Minister Celso Lafer also told a press conference Aug. 23 that there could be no connection between two. Lafer added that in the opinion of Brazil, any talks between Washington and the Mercosur would be useless until the Bush administration receives trade promotion authority, also known as fast-track negotiating authority. "From a more concrete point of view, any four-plus-one understanding depends on TPA," said Lafer.
Brazilian diplomats told BNA Aug. 24 that Brazilian officials were angered by what they saw as an attempt by Washington to use Argentina's current financial crisis as a means of furthering U.S. trade interests in relation to the Mercosur.
The accord between Argentina and the IMF, which still must be approved by the IMF board, calls for $8 billion in IMF loans for Argentina. According to a Brazilian diplomat who spoke with BNA, from the point of view of Brazil, the Bush administration took advantage of Argentina's "fragility" to draw the Mercosur into negotiations of interest to Washington.
Brazil Cool to Four-Plus-One Proposal
At a Mercosur summit in June, the presidents of the four nations--Brazil, Argentina, Uruguay and Paraguay--agreed to propose four-plus-one talks with Washington on a trade agreement. Brazil, however, expressed little interest in the proposal and went along reluctantly with its partners in the customs union. The Brazilian view was repeated by Lafer in his press conference of Aug. 23 when he called the four-plus-one proposal "modest."
The diplomats who spoke with BNA said that the idea was formally presented to U.S. officials at the start of August but the Brazilian government had not expected a rapid response and was upset by the apparent linkage with Argentina's IMF accord.
Because of Brazil's negative reaction to the USTR invitation, Argentine Minister of the Economy Domingo Cavallo, in Buenos Aires, told Brazilian journalists Aug. 23 that the USTR invitation for September talks with the Mercosur was an initiative of the Bush government.
"We weren't the ones who made the proposal," said Cavallo. "It was a response of the U.S. to the proposal of a four-plus-one accord."
According to Cavallo, the intention of the U.S. Treasury and the IMF was to reinforce the loan package with a measure that could help reactivate the Argentine economy.
Brazilian trade analysts told BNA that it appeared to Brazilian officials that Argentina, anxious to improve its international image, had given in to pressures from the U.S. Treasury for talks with the Mercosur.
In a statement released Aug. 23, Brazil's Ambassador to Washington Rubens Barbosa called the accord "a forum for discussion, not the opening of trade negotiations."
In their statements, Foreign Minister Lafer and the Brazilian diplomats who spoke with BNA all stressed that Brazil sees no chance of serious talks between the Mercosur and Washington until the Bush government receives trade promotion authority.
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
