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Brazil threatens to sandbag Doha Round negotiations

Brazilian trade officials are upping the ante on last year's World Trade Organization decision that mostly favored the Brazilian government's complaint against the U.S. cotton program.

Although the ruling is under appeal, the officials are saying Brazil will not sign any agreement from the upcoming WTO ministerial meeting in Hong Kong that does not include the WTO cotton panel's rulings.

Pedro de Camargo, the former Brazilian trade minister responsible for launching the challenges to the U.S. cotton program and the European Union's sugar regime, told members of the International Food & agricultural Trade Policy Council that Brazil will not bend from its insistence that both programs be changed.

“How can the Brazilian government say it lost in Hong Kong what it won in the cotton panel,” he told IPC members attending a seminar.

He also took a swipe at U.S. government officials, comparing their reluctance to accept the WTO cotton panel's ruling to the purported adoption of new policies by the European Commission.

“European policymakers know they must reform the sugar regime, but U.S. farmers and lawmakers still do not seem to understand the damage that cotton subsidies have inflicted on farmers in the rest of the world,” he said. “The United States must modernize its farm policy.”

U.S. trade officials insist the cotton panel's ruling was based on a flawed interpretation of the WTO's agreements and an ignoring of the fact that U.S. farmers have lost — not gained — market share since 2002. Part of the ruling actually sided with U.S. claims that it has successfully decoupled its income support payments — such as 2002 farm bill's direct payments — from production and prices.

U.S. trade negotiators presented the government's appeal to the WTO in Geneva on Dec. 13. A final ruling on the appeal is expected in March.

Camargo's comments were among several by Brazilian leaders on the Doha Round negotiations. The WTO is expected to try to finalize the Doha Round agreement at the ministerial meeting in Hong Kong in December.

Agriculture Minister Roberto Rodrigues said recently Brazil will try to enlist the aid of China to help make U.S. farm subsidies a focus of the ministerial meeting in Hong Kong. He also claimed the EU's decision to reduce its farm subsidies was a good example for the United States.

The European Union's decision is already being seen as something of a joke in world trade circles. The EU has announced numerous plans to reform its subsidy regimes in recent years with most having little impact on the support provided to Europe's farmers.

Some are also questioning how U.S. farm programs could possibly be injuring farmers in Brazil, which is expected to enjoy a $30 billion trade surplus in 2004, when U.S. cotton growers have been holding or reducing their acres while Brazil's have been increasing theirs.

A favorable ruling on the U.S. appeal in March would go a long ways toward calming some of the rhetoric on this highly charged issue.

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