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Brazil Cautious on Americas Free Trade Zone, Citing US Barriers - 2002-08-13

A top Brazilian official says his country may not join the proposed western hemisphere free trade zone if the United States does not eliminate trade barriers to Brazilian products. The official, who spoke Tuesday, said he expects difficult negotiations ahead.

Trade, Development, and Industry Minister Sergio Amaral gave a cautious appraisal Tuesday of Brazil's prospects in the proposed Free Trade Area of the Americas.

The U.S.-promoted FTAA was first proposed in 1994, and aims to establish a hemisphere-wide free trade zone in 2005. Negotiations to achieve this goal received a boost last week when President Bush signed legislation giving him expanded authority, commonly known as "fast track", to negotiate trade deals.

But speaking to foreign reporters in Rio, Trade Minister Amaral said despite Fast Track, Brazil is concerned about U.S. trade barriers on its products, especially in agriculture and steel. For this reason, Mr. Amaral said, his government views FTAA trade talks with caution. "Brazil is cautious, because the main export products to the United States face some kind of trade restrictions," he said. "Sometimes very high tariffs, for instance on orange juice; sometimes very small quotas; sometimes safeguards like on steel; sometimes a very significant subsidy [or] domestic financial support for producers that in effect take Brazilian products out of the U.S. market."

Brazil also is concerned over provisions in the new Fast Track law that require the Bush administration to consult with Congress before agreeing to make concessions on some 500 products. These include items such as frozen meats, fruits, orange juice and other products, which Brazil is hoping to export freely into the U.S. market under the FTAA.

Mr. Amaral said he hopes the new Congressional requirements do not undermine the prospects for an FTAA agreement. "We hope that this new procedure will not prevent the United States from putting on the table the real issues that prevent trade in the Americas from expanding as they might," he said. "Brazil has made substantial efforts to restructure its private sector, to take more sound macroeconomic policies. We are competitive in some areas, and we are prepared to negotiate FTAA, provided the real issues are put on the table."

If not, the trade minister warned, Brazil will have "no interest" in participating in the FTAA.

The United States is Brazil's major trading partner. Last year, Brazilian exports to the U.S. market grew by seven percent, to just over $14 billion. Mr. Amaral's warnings were also underscored in a speech Tuesday by Brazilian President Fernando Henrique Cardoso. Mr. Cardoso called on world leaders to discuss ending what he called "excessive protectionism," saying that opening markets is the best way to improve the distribution of wealth in the world. The Brazilian leader spoke before a government commission preparing for the World Summit on Sustainable Development in Johannesburg later this month.