The Boys in Brazil
November 8, 2005; Page A16
No doubt it was more fun this weekend for the press corps to cover flag-burning, window-smashing anti-American protesters in Che Guevarra T-shirts than to write about progress in slow and often tedious global trade negotiations. Street theater always sells better than policy. But the latter is the real news from President Bush's trip to the Southern Cone, and it's infinitely more important to the future of 500 million Latin Americans.
Most reports cast the fourth Summit of the Americas as a showdown between Mr. Bush and Venezuelan strongman Hugo Ch?vez. To read some of the accounts, you'd think the Ch?vez vision provided a serious alternative to the continuing expansion of free trade and global competition, and to the prosperity that has come with them. Give the Castro acolyte some credit for media savvy and sound bites -- which is what you have to fall back on when you lose on substance.
And lose Se?or Ch?vez did, because the real action this weekend didn't take place at the summit in Argentina but a day later on the American President's visit to Brazil. Mr. Bush and Brazilian President Lula da Silva went a long way toward agreeing on a common strategy to reduce farm subsidies that just might salvage the Doha round of global trade-opening.
"Your president has criticized the agricultural subsidies that the developed world pays to its farmers -- trade-distorting subsidies that undercut honest farmers in the developing world," Mr. Bush said in a speech in Brasilia. "I agree with President Lula." As Brazil's ambassador to the U.S. told us, "The visit was very constructive, and that fact was really apparent in the Brazilian press."
And no wonder, because Brazilian farmers have been pushing for decades to compete on a level global playing field. Reducing farm subsidies was supposed to be the centerpiece of the Doha round, which started four years ago this month. But the talks have since run into trouble, largely over farm issues. The U.S., Europe and Japan have resisted liberalizing their farm markets, while Brazil and its allies in the so-called G-20 have refused to move on other market areas (services and manufactured goods) until they see more progress on agriculture.
Several weeks ago, Mr. Bush tried to jump start the Doha talks by proposing large immediate reductions in U.S. "agricultural tariffs and trade-distorting subsidies," and total elimination over 15 years -- if other nations do the same. That tossed the ball over to the European Union, which is divided on the subject but has so far resisted similar reductions largely due to opposition from France. Unless the U.S. and the developing world can present a united front on behalf of freer trade, the French will never budge.
The U.S. has agreed with the developing nations' G-20 that only 1% of a country's agricultural products would qualify as "sensitive" products that receive protection. By contrast, the EU wants 8% to be excluded from trade liberalization, and the so-called G-10 -- including Israel, Iceland, Japan, Switzerland and Norway -- want 15%. The next time you hear some Nordic moralist deplore American attitudes to the Third World, just ask about farm tariffs.
It's true Mr. Bush made less progress on a Free Trade Agreement for the Americas, but Doha is the far bigger prize. The U.S. has already struck "bilateral" trade accords with Chile, with the nations of Central America, and of course with Mexico (Nafta). Other Latin countries can pursue similar deals if they want, just as they can liberalize their own economies without American prodding. Too many countries have used the future promise of a larger FTAA as an excuse not to do anything in the interim.
All of which makes the Lula-Bush entente even more significant. President Lula may be a recovering leftist, but he has governed as a pragmatist and he understands that Brazil's national interest lies in being part of the global economic system. The U.S. also has a stake in liberalizing trade around the world, and especially in Latin America, where protectionist policies have prevented the growth that has done so much to ease poverty in Asia. You might even call all of this an example of "multilateral" U.S. trade diplomacy designed to counter the "unilateral" French.
Sooner or later, the press pack will figure out what happened in Brazil, and might even report it. Meantime, we thought our readers would like to hear the good news.