US Seeks Stronger Ties With Brazil
Agricultural subsidies, closed markets currently mar the bi-lateral relationship
WASHINGTON, DC - 06/13/06 - Brazil and the US must "band together" to strengthen trade ties to counter China's fast-expanding economic influence, according to US Commerce Secretary Carlos Gutierrez.
Seeking to boost economic links after efforts failed to create a Free Trade Area of the Americas pact, Gutierrez recently told Brazilian and American business executives that China - not the US - should be seen as Brazil's main business competitor.
"This is not a time to be divided," Gutierrez said as he wrapped up a recent five-day visit to Brazil.
China imports vast amounts of Brazilian soy and iron ore. But cheap imports of Chinese products including textiles and shoes, coupled with the rising value of Brazil's currency against the US dollar, have seriously damaged other industries in Latin America's largest country.
China should not only be seen as an export market with 1.3 billion consumers, but also as a nation of 1.3 billion "new competitors," Gutierrez said.
The US for years wanted to clinch a regional trade agreement that would slash trade barriers and open new markets in a 34-nation zone stretching from Canada to Chile. Brazil would have been a key player, its economy the hemisphere's second-largest after the US.
But the talks have bogged down amid a stalemate between Brazilian and US demands.
Brazil has insisted on deep cuts in the subsidies handed out to American farmers. The US has countered with demands that Brazil open up its manufacturing and services markets, as well as combat piracy of products from DVDs to music compact discs.
Early last week, Gutierrez and Brazilian Minister of Trade and Industry Luiz Fernando Furlan signed a memo of understanding for informal talks between the two nations on trade-related issues.
Gutierrez said Brazil has taken solid steps over the last year and a half in enforcing intellectual property rights, but that the country still has more work to do.
The same disputes also have held up efforts by the World Trade Organization (WTO) to forge a global trade treaty for the group's 149 member nations.
The group missed an April deadline to schedule a conclusion to negotiations.
Looming over the talks is the July 2007 expiration of a US "fast-track" law, which requires the US Congress to either accept or reject international deals as a whole without being able to pick them apart line by line.
Gutierrez said the US has made an offer to make deep cuts in farm subsidies, but encouraged Brazil to take a leadership role in encouraging developing countries to open their markets.
Without similar concessions from Brazil and other developing nations, the push to clinch the trade deal could face defeat in the US Congress, Gutierrez said.
"Our farmers and our members of Congress will say, 'Why are you giving such large agricultural concessions?'" he added.
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