Brazil, the world's largest coffee and sugar exporter, may decide to escalate its fight over U.S. and European barriers at the World Trade Organization as part of its continuing effort to gain a bigger share of global markets, Agriculture Minister Roberto Rodrigues said Thursday.
Brazil is awaiting the outcome of a WTO ruling in its favor over $3 billion of U.S. cotton subsidies before deciding whether to challenge other farm aid that they see as hampering trade, Rodrigues said.
South America's largest economy wants to boost its agriculture output by about half within a decade, in part by competing with U.S. farmers, he said.
''We are after the reduction of protectionism for a freer, fair and just market,'' Rodrigues, 61, said from his office in Brasilia, the capital. ''If that happens, it will make new markets a lot more viable.''
A more aggressive push at the WTO would aggravate relations with the United States already strained by Brazil's resistance to a hemispherewide free-trade agreement promoted by the United States, said Bob Stallman, president of the American Farm Bureau Federation.
Brazilian President Luiz Inacio Lula da Silva has fought U.S. and European farm aid since taking office in January 2003. He formed a bloc with China that scuttled global free-trade talks in Cancun, Mexico.
''This isn't a substitute for WTO negotiations,'' said Stallman, whose Washington-based organization represents 5.5 million U.S. farm families. ''Excess litigation at this point in the negotiations will probably create more barriers than successes.''
Brazil hasn't decided whether to file more complaints and won't act until appeals of the cotton ruling are exhausted, Rodrigues said. It also is awaiting a WTO decision on a complaint over European Union sugar exports.
The United States, its largest trading partner, accounted for 28 percent of Brazil's record $25 billion trade surplus last year, making it important to Lula's efforts to bolster exports to help sustain an economic recovery.
Brazil's economy grew 2.7 percent in the first quarter from the same period last year, after shrinking for four quarters. The United States, whose biggest trading partners are Mexico and Canada, had a record trade deficit last year of $496.5 billion.
Lula has called opening new markets critical for Brazil to meet a goal of becoming the world's biggest food exporter within a decade. Brazil has almost doubled its grain production since 1992 as such companies as Bunge, the world's biggest processor of oil seed, and Cargill, the largest U.S. agriculture company, built ports and silos and financed farming to make the country a base for exporting crops worldwide.
Brazilian farmers are taking advantage of lower costs -- grain farmland in Rio Grande do Sul state costs half what it does in Iowa -- to meet surging demand for food in such countries as China.
With 300,000 square kilometers (116,000 square miles) of pasture -- an area larger than Italy -- convertible to crops, Brazilian grain production alone could jump by half, to about 200 million tons, in a decade, Rodrigues said, and the sugar-cane crop by 100 million tons, or about a third.
Some U.S. and Canadian farmers have found it so hard to compete that they have turned to buying land in Brazil. The Royal, Iowa-based Brazil Iowa Farms LLC raised $13 million from U.S. and Canadian farmers seeking to profit from lower costs in Brazil, said David Kruse, chief operating officer of the fund. The fund bought 11,400 acres in the northwestern state of Bahia, where it plans to grow cotton and soybeans.
Said Kruse: ''We are employing cheap U.S. capital to buy high-return farmland in Brazil. It is the best of both worlds.''
Bloomberg writers Katia Cortes and Jeff Wilson contributed to this reportMiami Herald:
