The Caribbean should engage with Brazil The View From Europe
By David Jessop
Stabroek News
December 14, 2003

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On December 15 the General Council of the World Trade Organisation (WTO) will meet in Geneva. There, trade officials from around the world will try to restart the presently stalled Doha development round. In theory, their joint intention is to take forward the process of global trade liberalisation in a manner that will encourage development in the world poorer nations. As matters stand it seems they are unlikely to succeed for some time yet.

Despite strenuous efforts by WTO officials and trade ministers since the WTO 5th Ministerial meeting in Cancun, the differences that ended prematurely their discussions in September still remain.

On December 9, the Chair of the WTO's General Council, Perez del Castillo, acknowledged for the first time the probability that there will be no progress this year. He noted that while consultations since September have involved exchanges on substantive issues, there has been little real negotiation or any sense of urgency on the part of WTO members. Confirm-ing this, the Director General of the WTO, Supachai Panitchpakdi, noted "the challenge, as ever, is to translate this general sense of commitment into concrete progress in the negotiations."

Despite this, some faint hope still remains that a breakthrough might arise as a result of a meeting of the G20 group of developing countries that began in Brasilia on December 11. The meeting, which is continuing as this is being written, has a number of purposes. In general terms it aims to indicate that the G20 - now named after the date in August when it was formed rather than the number of nations involved - remains a potent force in moving the global trade liberalisation process forward. But more specifically, delegates are exploring whether the WTO negotiations on agriculture and other issues might be re-launched, possibly on the basis of the proposal by Luis Ernesto Derbez, Mexico's foreign minister, that was presented but never officially discussed in Cancun.

In Cancun many feel that the meeting was close to agreement on agricultural reform but that the "Singa-pore issues" relating to rules on investment, competition, trade facilitation and Government procurement, got in the way. Since then the G20, a grouping that includes China, India, South Africa, Cuba and now others such as Nigeria, have been reviewing an offer by the European Union to phase out export subsidies if other countries agree to end all forms of export support for agriculture.

However, this is an issue on which consensus will be hard to achieve. Brazil may try to move the G20 closer to the European Union to achieve a modest agreement to cut farm market barriers having in mind that the United States has promised to cut its domestic farm subsidies if the European Union does the same. This would be in Brazil's interest as it hopes to find ways to support its cheap farm exports. However, other members of the group such as India, want to continue to protect their small farmers with subsidies and restrictions on market access. What is more, other members of the G20 are opposed to progress on some or all of the Singapore issues.

All of this, together with a general sense before the meeting began that Europe's approach was still missing the flexibility required, suggests that progress this year in Geneva is unlikely. "We are committed to helping break the stalemate but we are not prepared to participate in a negotiation that will not lead to the implementation of the Doha round mandate [for freer farm trade]," Mr Hugueney the Secretary- General of the Brazilian Foreign ministry is quoted as telling the Brazilian media.

For its part the US seems to accept that a starting point of this kind might be better than having no starting point at all, but the range of incompatible views suggests that the potential for stalemate is enormous.

So what happens next?

On December 15, Mr Perez del Castillo will identify key issues and propose a process for advancing the Doha round. In sum this is likely to involve little more than announcing a timetable for 2004 that will involved the selection of new chairs for the various WTO working groups, after which in theory negotiations can resume. It is also likely that the General Council meeting will address the overall timetable for the Doha round as the original January 2005 deadline is looking increasingly out of reach.

In all of this perhaps of greater interest to the Caribbean region should be the fast-developing role of Brazil and the pressing need to deepen a relationship with Brasilia and with President da Silva in particular.

Brazil's leadership in the G20 is part of non-aligned foreign policy that is taking Brazil into areas no nation in the Americas south of the US other than Cuba has practically pursued.

The background appears to be that President da Silva, sceptical of the chances of rich countries further reducing their trade barriers, is seeking to enhance trade ties with other developing nations.

In a recent address to the Arab League, the Brazilian President outlined a vision of south-south co-operation that could involve South America, Africa, the Arab world, China and India, "creating a new global political and commercial architecture."

"We must create among ourselves a new way of engaging in politics and commerce, without confrontation with the developed world," he noted. President Lula confirmed also that he is not seeking confrontation but rather "political and economic equality." Otherwise, he said, "we shall be developing countries forever."

The Brazilian President appears to be talking the same language as the Caribbean. If the region is to participate in any process of strategic repositioning there is a strong case for rapid engagement now with Brazil at the very highest levels.