TRADE: US Should Pay ‘Hypocrisy Tariff’, says Brazilian Expert

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Dec 14 2001 (IPS) - The United States should be made to pay a “hypocrisy tariff” in global trade, in benefit of nations that do not rely on heavy protectionist measures, said Brazilian farm leader Gilman Viana Rodrigues.

The only “positive effect” of the “fast-track” authority allowing US President George W. Bush to negotiate trade agreements, as approved by the House of Representatives and a key Senate commission, was that it “revealed the true” US position towards the Free Trade Area of the Americas (FTAA), said Rodrigues.

The version that made it through the lower house last week does not give Bush carte blanche to sign trade deals like the FTAA, but instead makes tariff reductions on 297 “sensitive” items, nearly all of them farm products, conditional on congressional approval.

Rodrigues, the chairman of the foreign relations commission of the powerful National Confederation of Agriculture, said neither the US Congress nor the Bush administration really wanted the hemisphere-wide accord, the talks on which are to be completed in 2005.

The United States should pay a 110 percent duty for its “hypocrisy” on the trade front, he told IPS.

Fast-track, or trade promotion authority (TPA) as it is formally known, means the US Congress can only approve or reject trade deals negotiated by the government, without modifying them.

But as it stands now, the bill “is not viable,” said Brazilian President Fernando Henrique Cardoso, while the lower house of the Brazilian parliament approved a motion recommending that the government pull out of the FTAA negotiations.

The aim is to press Washington to revise the TPA bill, which must still move through the Senate, and may possibly have to go back to the House due to the modifications introduced by the Senate Finance Committee.

The restrictions contained in the TPA bill affect many Brazilian exports, like beef, sugar and orange juice, which makes free trade in the region “inviable,” said Cardoso and Agriculture Minister Marcus Pratini de Moraes.

Brazil will be unable to negotiate if barriers to free trade in farm products are left in place, because without concessions by the United States it will not be able to open up its market in other sectors, said Pratini de Moraes, who called for an adamant joint response from the Southern Common Market (Mercosur) trade bloc (made up of Argentina, Brazil, Paraguay and Uruguay).

Hopes that the members of the Senate committee would water down the conditions imposed by the House of Representatives went up in smoke Wednesday, when the Finance Committee strengthened the protectionist aspects of the bill.

As approved by the Senate committee, the TPA bill would require administration officials to report to Congress on the labour rights record of countries involved in future accords.

But while hopes were destroyed, the negotiations on the creation of the FTAA were not brought to a halt, Rodrigues pointed out.

And Minister of Development, Industry and Foreign Trade Sergio Amaral said the first steps towards any regional trade deal are always cautious ones, with the understanding that the process will be a long one and will involve mutual concessions.

Hurdles and delays are a normal part of negotiations of trade agreements, said the diplomat, because the rest of the countries involved will also attempt to safeguard their products, while opening their markets as little as possible.

For his part, Rodrigues said the negotiations were inevitable, at least “until the United States formally states that it does not want to continue pursuing the trade pact,” because “an FTAA without Brazil” would cause great damage to this country.

All Brazil wants is “a fair FTAA” – in other words, truly free trade that does not leave out the most competitive products of this country of 170 million, he added.

But remaining outside the trade pact, if it ends up going into effect, would have a high cost, because Brazil would lose the opportunity to export goods to the member countries under a scheme of reduced tariffs.

If approved, the TPA bill will mean the creation of the FTAA would depend even more heavily on the new round of multilateral trade talks within the World Trade Organisation (WTO), which were launched in November at the ministerial conference in Doha, the capital of Qatar, said Rodrigues.

The United States’ reluctance to open its market also spurs the European Union to leave its agricultural protectionist policies in place, thus standing in the way of the forging of closer ties between that bloc and the Mercosur through trade negotiations that got underway this year.

In a global process, there are greater chances of moving towards dismantling farm subsidies and other barriers to trade, as the members of the WTO have committed themselves to doing, because agreements are not subject to conditions imposed by the US Congress, said Rodrigues.

Brazilian diplomats and analysts fear that the TPA bill will also affect the WTO round of talks by standing in the way of liberalisation of trade in farm products, the most pressing question for developing countries.

The votes and debates on the TPA bill in the US Congress represented a setback with respect to the position taken by Washington in Doha, where it yielded on the question of negotiating trade in agricultural goods and agreed to open its anti-dumping rules, which block a great number of imports, to scrutiny.

US Trade Representative Robert Zoellick received harsh words of criticism for the “concessions” he made at the WTO ministerial conference that helped pave the way for the new round of multilateral talks.