Latinnews Daily - 21 October 2003

Lula was opening a seminar on the role of legislators in creating the FTAA. Peter Allgeier, the number two to the US Trade Representative Robert Zoellick, is due to address the meeting before it closes today. Representatives from 22 countries eligible for the FTAA are attending the seminar.

Lula said that Brazil was prepared to make concessions to achieve the FTAA, but said that it was increasingly clear that the US was not prepared to compromise. The US, he said, had made it clear that neither agricultural subsidies nor anti-dumping rules would be included in the FTAA. This, he said, created limitations. If the US would not open up its markets in areas where Brazil was competitive, such as agriculture, the US could not expect easier access to Brazilian markets in the areas in which it was interested.

He added that Brazil was keen on increasing its foreign trade and clearly would like preferential access to the US market. This ambition, he said, had to be balanced by Brazil's position as the biggest economy in South America, which meant that it had to speak up for the poorer countries in the region.

Lula's speech was a clear and important statement of Brazilian policy on the FTAA. The signals coming out of Brazil have been confused in recent weeks because of high-handedness by Itamaraty, the foreign ministry. This reached a peak at the meeting of officials in Trinidad & Tobago at the beginning of October when Itamaraty produced a document which other Brazilian ministers and some of Brazil's partners in Mercosul claimed represented a new departure for policy on the FTAA. This policy, the dissidents warned, would lead to Brazil becoming isolated over the FTAA.

Itamaraty's hostility to the US alarmed and annoyed some powerful lobbies inside, who feared that Brazil was going to miss an opportunity. Lula clarified a new multi-layer strategy announced by Itamaraty in Trinidad. He pointed out that it was a development of Mercosul/Aladi policy. Aladi was the weak Latin American effort at regional integration under which members offered each other preferential access to their domestic markets. The new Itamaraty idea is that individual countries can open up their markets bilaterally, but do not have to extend the same access to all members of the FTAA. In a shrewd attempt to ensure that Uruguay, which has shown signs of wanting to break with Brazil on the FTAA, stayed with it, Lula said that Brazil shared Uruguay's view that the FTAA should not be imposed.

Lula clarified the way FTAA policy would be set for Brazil. He said that Itamaraty would continue to coordinate the negotiations but it would consult widely with other interested parties, both from the official sector and the private sector. Day-to-day negotiations over the FTAA would be coordinated by Itamaraty but with input from the agriculture and development ministers.

Lula and his ministers deny that the country has been isolated over the FTAA. They point out that Argentina backs Brazil and Mercosul. José Dirceu, Lula's right-hand man and chief of staff, said that he did not believe that the US had been trying to isolate Brazil. He said that this was impossible because of Brazil's importance and size.

This is in marked contrast with what the US has been doing in Central America. There it has warned countries negotiating a free-trade deal with the US that they must break with the Brazilian-led `G-flux' group. This was created at the World Trade Organization meeting in Cancún, led by Brazil, China and India, to act as a counterweight to the US and the European Union.End of preview - This article contains approximately 663 words.

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