Brazil, which has been the most aggressive voice in World Trade Organization talks, shifted to the defensive, indicating it's prepared to begin serious discussions on what it can give to the European Union and United States in return for better terms for its agricultural exports.
Foreign Minister Celso Luiz Nunes Amorim argued that concessions on import tariffs on industrial and other non-agricultural goods sought by EU negotiator Peter Mandelson and U.S. counterpart Rob Portman must be less extensive than the elimination of barriers for sugar, soybe ans and other farm commodities.
Mandelson has refused to improve his offer to reduce aid to farmers unless newly emerged giants of global trade such as Brazil and India give something to EU companies. Brazilian President Luis Inacio Lula da Silva met Mandelson's former boss, British Prime Minister Tony Blair yesterday and called for a meeting of heads of state to resolve the deadlock.
Global trade in agricultural products has been too sensitive to be dealt with in previous WTO rounds. Consequently, Amorim pointed out, EU import duties can be as high as 200% and Japan has tariffs up to 1,000%. In contrast, duties on manufactured products have been repeatedly slashed, leaving Brazil's biggest such levy at about 35%, according to Amorim.
If Brazil subsidised its industry like the EU currently supports farmers, "I wouldn't only be facing the WTO, I'd probably be in jail," Amorim said.
Brazil will be the biggest beneficiary from liberalization of agricultural commerce, with gains coming at the expense of the EU's smaller and less efficient farms. In return the EU wants its banks, car-makers and other companies to gain access to rapidly growing emerging markets.
A meeting of heads of state, including representatives from the most and least developed economies, and the biggest agricultural exporting countries should take place "somewhere after April and in the middle of the year," Amorim said.
The Brazilian minister backed seeking a breakthrough across all areas of the talks rather than crawling forward the piece-meal approach pursued up until now.
"The package we could have with the incremental approach is not enough for Brazil and not enough for many countries which depend on agriculture," Amorim told an audience at the London School of Economics.