TRADE-BRAZIL: Lawmakers, Stockbreeders Declare ‘War’ on Canada

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Feb 8 2001 (IPS) - The Brazilian Congress shelved all trade agreements with Canada which are pending parliamentary approval, while stockbreeders are preparing a protest next Monday against Ottawa’s decision to ban imports of Brazilian beef as a supposed protective measure against mad cow disease.

Brazilian legislators and ranchers complained that Ottawa had spread fears that beef from this South American country was infected with mad cow disease or Bovine Spongiform Encephalopathy (BSE), even though no case has ever been reported here.

Canada is “playing dirty” and making any negotiation impossible, said the president of the Stockbreeding Development Fund, Pedro Camargo Neto, who proposed that Brazil boycott the Summit of the Americas in the Canadian city of Quebec next April.

Parliamentary Deputy Paulo Delgado, who first suggested that the bilateral agreements be shelved, said the Canadian government had spread “untruthful information” that was hurting Brazil’s exports worldwide, taking advantage of the alarm caused by mad cow disease in Europe.

The governments of Brazil and Canada have signed 11 agreements, which are pending ratification by Congress before they can go into effect, said Delgado, of the leftist opposition Workers’ Party.

Investment protection, technology transfer, satellite cooperation in telecommunications, education, agriculture and environmental protection are some of the areas covered by the pending accords.

Delgado said that while the delay in ratifying the agreements would have negative effects for Brazil, Canada stood to lose much more, because the accords mainly reflected that country’s interests, and Brasilia could replace the treaties with cooperation with other countries.

Brazil’s Foreign Ministry also raised its tone, leaving aside its usually diplomatic language.

Canada has many investments and economic interests in Brazil, and enjoys a trade surplus with this country, stressed Brazil’s new Foreign Minister Celso Lafer, suggesting that Canada could suffer heavier losses in an open trade war than Brazil.

Trade relations require a “constructive attitude,” which we have not observed in the positions taken by Canada, added Lafer, who has been in his post for 10 days although he has long experience as a business leader and as Brasilia’s ambassador to the World Trade Organisation (WTO).

When Canada decided to adopt the ban on Brazilian beef imports last Friday, it sought to emphasise that the decision had nothing to do with the dispute over the market for medium-sized airplanes between Brazil’s Embraer aeronautics company and Canada’s Bombardier.

But in Brazil there are no doubts that the measure was taken in retaliation over that conflict.

The WTO ruled against subsidies that Brazil granted Embraer, and gave Canada the right to apply sanctions on Brazilian merchandise for up to 233 million dollars a year over six years.

So far, however, Canadian authorities have merely threatened Brazilian companies, saying their exports could suffer the consequences of the airplane manufacturers dispute.

The measure against beef imports purportedly did not form part of the reprisals, but was justified as a preventive health-related measure, based on the “theoretical risk” of BSE contamination.

The indignation is growing in Brazil as the various sectors involved realise the extent of the global damage wrought by the ban, which sowed fears that BSE was present in Brazil.

For example, Brazilian beef has already been excluded from an international tender for exports to Iran.

The country’s beef exports, which totalled 800 million dollars last year, could suffer a sharp fall this year, analysts warn.

Ottawa’s decision has also had an impact on the domestic market, with the prices fetched by stockbreeders falling due to the suspension of purchases by the meat industry, as it waits to see how the situation develops.

The Brazilian government is apparently split between declaring an open trade war or making efforts to negotiate, and has decided to wait for Canada’s response to a message from Foreign Minister Lafer demanding that the ban on beef imports be lifted.

Brazil, the world’s eighth largest economy, must react emphatically if it wants to hold its ground in the face of developed countries that “do not want it to grow,” said Luiz Hafers, president of the Brazilian Rural Society.

That association has called a rally for next Monday in Sao Paulo to protest Canada’s decision and “pressure the Brazilian government” to respond to that country’s “arrogance.”

Even if Brazil does not decide to retaliate on a formal level, the indignation should trigger reprisals by government officials, wrote Luis Nassif, a columnist who writes on economic issues for the daily Folha de Sao Paulo.

Based on conversations he has had with officials, Nassif predicted that Canadian companies would start to run into difficulties in government procurements, and in obtaining loans from state banks, and permits and other necessary documents from regulatory bodies like the National Telecommunications Agency.