DOW JONES NEWSWIRES | By GERALD JEFFRIS | November 3, 2003
BRASILIA -- In an apparent shift from a hard-line stance against some U.S. trade positions, Brazil is proposing a more flexible approach on Free Trade Area of the Americas talks this month.
Brazilian FTAA Coordinator Tovar da Silva Nunes said the proposed model, similar to one already presented by Canada and backed by fellow Common Market of the South, or Mercosur, members Argentina, Paraguay and Uruguay, would enable countries to sidestep resistance from sensitive sectors while still allowing agreement on a broad-based accord.
Nunes, in an interview with Dow Jones Newswires ahead of meetings between U.S., Brazilian and other trade ministers from the region this Saturday in Washington, said Brazilian negotiators are optimistic about advances at a FTAA summit in Miami beginning Nov. 17.
After preparatory talks for Miami reportedly got bogged down in Trinidad & Tobago last month, Washington decided to hold this weekend's "mini-ministerial" meeting to reinvigorate the agenda.
"We're very close to an understanding," Nunes said. "At the Trinidad and Tobago meeting, in the midst of this show of disjointed information (in the media), nobody remembered to publicize that for the first time in the FTAA process, the parties are in agreement to change the negotiating agenda to allow a balanced result by 2005."
Many observers thought the prospects for success at the Miami conference were few after the recent collapse of World Trade Organization talks in Mexico, where Brazil and India led a group of nearly two dozen developing countries demanding that rich nations put their agricultural protections - including subsidies - squarely on the table.
When they didn't, the "G-22" refused to discuss issues of interest to industrialized countries such as investment rules, government procurement, intellectual property protection and patent rights, dooming the Cancun talks and casting doubt on the FTAA's own timetable.
Facing a 2005 deadline for the close of FTAA talks, U.S. officials signaled they would be willing to push for an agreement even without Brazil. "We hope that all 34 countries will sign on, but if one decides not to, I don't see why the others shouldn't go ahead," U.S. Deputy Commerce Secretary Peter Allgeier told members of the Brazilian press on a recent visit.
Somewhat ironically, Brazil and the U.S. currently preside over the FTAA process, and Brasilia's perceived intransigence has generated heated debate even among members of President Luiz Inacio Lula da Silva's cabinet.
"Brazil should show concern with building the FTAA, or abandon the co-presidency," said Trade Minister Luiz Furlan, noting that the future of all 34 nations in the region were affected by Brazil's position. Furlan was joined by Brazilian Agriculture Minister Roberto Rodrigues, who said the Foreign Ministry, which handles trade negotiations, had acted in a "rigid and intransigent way." The finance ministry also reportedly lobbied for a change in Brasilia's official stance.
Foreign Minister Celso Amorim defended the firm approach, saying the U.S. and Canada can't "impose" a pact on Brazil and would have to "convince and persuade" it.
But Nunes said Brazilian officials have put aside the internal divisions and hope to concentrate on a "positive agenda" for the Miami meeting.
Under its latest proposal, which he said is being made in concert with other propositions, certain countries in the hemisphere would adhere to accords while others that weren't prepared could sign on at a later date or continue to negotiate within the WTO.
"You go deep wherever you can and where you can't, you wouldn't demand that all 34 countries sign on," Nunes explained. "In our vision, this will avoid frustrating countries that desire to go deeper but will safeguard countries that have problems, such as the case of the U.S. with agricultural products and the case of Brazil with intellectual property."
The U.S. has received the proposal, he noted, but still hasn't made a pronouncement on it.
Beyond objections that the flexible approach might disfigure the original tack for the region's commercial integration, Nunes argued, it could still readily be accommodated under the established rules for the talks.
"We should first identify that which unites us, which is a lot," he said. This approach would expedite talks in areas where FTAA countries are in agreement, he added.
Still, some Brazilian officials, including Trade Minister Furlan, have expressed skepticism about completing the FTAA talks by the original 2005 deadline as next year will be an election year in the U.S.
Nunes said while Brazil felt a general backing for the more flexible approach, some countries objected that it would diminish the importance of the FTAA. "The other vision, however, is to have a less ambitious or less complete accord and allow all these unresolved questions to be negotiated within the scope of the World Trade Organization," he said.
While the Brazilian diplomat expressed optimism for acceptance of the more flexible plan, he noted that not all difficult themes would likely be resolved before the 2005 deadline.
Nunes said the areas of agreement among most FTAA member countries so far include: conflict resolution mechanisms; rules of product origins; customs procedures for facilitating commerce; special treatment for developing countries; market access for agricultural and nonagricultural goods, services and investments; treatment of export subsidies; and rules for applying antidumping sanctions.
According to Nunes, there is still disagreement, however, on "equivalence measures," including credits for export; definitions for dumping practices; the need for multilateral rules for investment; domestic farm subsidies; proposed advances in government purchase rules; and intellectual property rules and definitions.
Nunes said the particularly sticky problem of intellectual property involving the use of Brazil's "biological diversity" and "traditional knowledge" by foreign companies will have to be settled for practical purposes in the WTO, where it was being handled originally.
Apart from these potential flash-points, Nunes said Brazilian negotiators were going to Miami with positive expectations.
"We're starting from the supposition that all negotiations have to bring a balanced and positive result for all sides involved," he said. "A negotiator can only become involved in...negotiations if he believes there can be a positive result."
-By Gerald Jeffris, Dow Jones Newswires; (5561) 8123-6883,DOW JONES NEWSWIRES:
