VZCZCXYZ0034
OO RUEHWEB

DE RUEHSO #0829 2121343
ZNR UUUUU ZZH
O 311343Z JUL 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5512
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 6587
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7314
RUCPDOC/USDOC WASHDC 2522

UNCLAS SAO PAULO 000829 
 
SIPDIS 
 
SIPDIS 
 
STATE INR/R/MR; IIP/R/MR; WHA/PD 
 
DEPT PASS USTR 
 
USDOC 4322/MAC/OLAC/JAFEE 
 
E.O. 12958: N/A 
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: DOHA ROUND, USTR SCHWAB IN BRAZIL; SAO 
PAULO 
 
¶1. "Truculence in Trade Negotiations" 
 
The lead editorial in center-right O Estado de S. Paulo (7/29) 
opined: "Among other topics, USTR Susan Schwab and Foreign Minister 
Celso Amorim are expected to discuss conditions to reactivate the 
Doha Round. But the terms of the bilateral cooperation in this case 
are not clear, because the arrival of the US trade representative 
was preceded by a warning gun salute fired by Senator Charles 
Grassley [who] suggested that the US should retaliate Brazil and 
India for, according to him, having hampered the round's conclusion. 
 Everyone knows that the negotiations stuck mainly because of the 
impasse between the US and the EU about agricultural policies.... 
The GSP is a unilateral concession and therefore the Americans may 
remove it in its next renewal, in December.  It's their right. But 
it is also right to affirm that this benefit far from offsets the 
losses imposed on other nations resulting from subsidies given to 
the US agricultural sector and by the frequent imposition of highly 
arbitrary trade barriers.... In a remarkable coincidence, Ambassador 
Schwab is expected to ask the Brazilian minister to convince the 
Indian government to open its market to imports of agricultural 
products.... It is clearly excessive to focus on India's 
agricultural policy as the main obstacle to the Doha Round's 
success. The US responsibility in this aspect is much greater. If 
the USG recognizes this fact, it will be much easier to reactivate 
the round. If not, it will subordinate its policy to Senator 
Grassley's interests." 
 
¶2. "Empty-handed" 
 
University Professor Marcelo Paiva de Abreu maintained in 
center-right O Estado de S. Paulo (7/31): "Everything indicates that 
the suspension of the Doha Round ministerial negotiations has 
jeopardized the deadline established for the conclusion of the talks 
because it is incompatible with the requirements of the US political 
agenda, especially in regards to the TPA's term. Unless unexpected 
spectacular developments occur, the most likely outcome is a 
postponement of the conclusion of the current negotiations for two 
or three years, but it will depend on an optimistic hypothesis that 
the US Congress' will be wiling to approve a future fast track.... 
Only the most radical supporters of agricultural protectionism in 
the US Congress are considering that Brazil is responsible for the 
impasse, since it resisted Washington's subsidies cut proposal that 
maintains them on the current level.... Will bilateral agreements be 
capable of replacing multilateral negotiations?  It is difficult to 
believe that Mercosul's talks with the EU have been facilitated by 
Venezuela's entry in the South American bloc." 
 
¶3. "Doha: Victory Or Defeat?" 
 
Former Minister of Finance Luiz Bresser Pereira wrote in liberal, 
largest circulation daily Folha de S. Paulo (7/31): "Contrary to 
what has been said, the suspension and virtual failure of the Doha 
Round represented more a victory than a defeat for Brazil.  The 
ideal would have been a great reduction in agricultural subsidies in 
exchange for a small diminishment of industrial tariffs and minimal 
concessions in the area of services, but the alternative being 
supported by the US, Europe and Japan was opposed, and in that case 
the damage to Brazil would have been greater. Such harm was avoided 
because Brazilian diplomacy was able to define and defend the 
developing nations' interests.... In view of the Doha Round fiasco, 
some say that the alternative for Brazil is bilateral agreements. 
There is no doubt about that but everything will depend on the 
quality of the agreements." 
 
¶4. "A World Of Subsidies" 
 
Center-right O Estado de S. Paulo (7/29) editorialized: "Governments 
around the world spend much more than one could have imagined so far 
in subsidies given to agricultural, industrial and services sectors. 
According to a WTO report, such subsidies may total USD 1 trillion 
annually.... The study clearly shows that the developed nations are 
the ones that most use the taxpayers' money to subsidize different 
sectors of the economy.... Actually, it was the impasse on this 
topic that caused the collapse in the Doha Round negotiations. 
Subsidies given by rich nations to agriculture range between USD 230 
billion and USD 280 billion every year.... A great part of the 
world's economy works only based on subsidies.... Agricultural 
products exporting nations like Brazil have been harmed by this 
practice. Brazil is one of the nations that give least subsidies to 
the private sector.... Brazil is also one of the few nations that 
reveal the sectors that receive governmental assistance." 
McMullen