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DE RUEHSO #0554 1731357
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O 221357Z JUN 07 ZDK
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7161
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 8263
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8175
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UNCLAS SAO PAULO 000554 
 
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: MIDEAST: GLOBAL ECONOMY: WTO AND DOHA ROUND, G-4 TRADE 
MINISTERS MEETING IN POTSDAM; SCO PAULO 
 
 
¶1. "Double Loss" 
 
Influential center right national circulation daily O Estado de S. 
Paulo's economic columnist Celso Ming commented (6/22): "If it is 
true that a bad deal is preferable to no deal, then the failure of 
the Postdam meeting to advance trade negotiations signals a double 
loss for Brazil: because it will now be pointed out as one of the 
responsible parties for the fiasco, and because it bet all its chips 
on a multilateral trade agreement that has now become much more 
difficult to reach.... Technical reasons for the blocking of the 
negotiations are the usual ones. Both the United States and the 
European Union refused to reduce agricultural subsidies to a minimum 
to satisfy the emerging nations. And the latter resisted reducing 
import tariffs on industrialized goods and opening their market to 
the service sector. As happens in all trade negotiations of the 
type, one cannot guarantee that the failure is a final one. 
Sometimes, things have to worsen much more to begin to improve. If, 
by the end of August, nothing new changes in the current scenario, 
then it will be very difficult to make progress before the 
completion of a six-year deadline, because political conditions both 
in the US and India will tend to embitter." 
 
¶2. "The 'No-Agreement' in Doha Round" 
 
Institute of Trade Studies and International Negotiations' president 
Andre Meloni Nassar wrote in business-oriented Valor Economico 
(6/22): "The fundamental change in the negotiating process, which 
surprised an unprepared Brazil, emerged when the US joined Europe 
looking for balance outside the agricultural negotiation. Being 
pressured by Brazil to make concessions in subsidies and access to 
markets, both the US and the EU chose Brazil's industrial sector as 
the balance element.  At that moment, the defensive balance that was 
being outlined was broken. And if we can attribute to the GOB a 
fault in its strategy, that mistake occurred because of its 
timidness in regards to India's demands regarding flexibility.... 
The G-4 ministers were marching on the thin line separating two 
types of agreements: a minimum, realistic and little ambitious 
agreement, which the GOB aimed for, and the 'no-agreement,' which 
was the veiled option being supported by a significant number of 
developing nations and, after yesterday's outcome, by the US and the 
EU." 
 
¶3. "Doha Round failure" 
 
Former Brazilian Ambassador in Washington Rubens Barbosa maintained 
in influential center right national circulation daily O Estado de 
¶S. Paulo (6/22): "The failure in the multilateral trade negotiations 
was not a surprise. A US Democratic Congress would hardly give 
President Bush authorization to negotiate trade agreements, when the 
Republican majority denied fast track mandate to Clinton eight years 
ago. Elections in France, the pre-electoral climate in the US and 
the Congress' negative attitude in regards to reviewing US subsidies 
also helped to create a more protectionist than favorable climate 
for free trade. It is hard to accept that Brazil is presented as one 
of the responsible nations for the failure in the talks.... Brazil 
neither subsidizes nor protects its agricultural production. The GOB 
and its private industrial sector signaled that they could make 
concessions if and when the US and the EU presented proposals 
representing real gains for the Brazilian agricultural sector. As 
that did not happen, it is better not to have an agreement than to 
have a bad agreement." 
McMullen