Transcript 1. The conditioning factors affecting Brazil`s positions

Task Force
Brazil, trade multilateralism and the
WTO: a medium term perspective
WTO Public Forum
Geneva, September 26th, 2012
The task force: organization and components
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Components:
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Ivan Tiago Machado Oliveira
José Serrador
Leane Cornet Naidin
Lia Valls Pereira
Pedro da Motta Veiga
Pedro de Camargo Neto
 Coordination: CINDES
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Rabih Nasser
Ricardo Markwald
Sandra Polónia Rios
Soraya Rosar
Vera Thorstensen
Structure of the presentation
1.The conditioning factors affecting Brazil’s positions
2.Characteristics of trade multilateralism for Brazil
3.Brazil's multilateral trade agenda: drivers and components
1. The conditioning factors affecting Brazil’s positions (1)
Current economic situation leads to defensive stances in trade negotiations
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Low economic growth compared to other BRICS
Competitiveness deficit of the industrial sector
Appreciation of the Brazilian currency
De-industrialization debate (Dutch Disease???)
Increasing participation of resources intensive sectors in the GDP growth
Current dilemma:
• Adopting industrial policies geared to stopping the changing winds and to
sustaining a broadly diversified industrial sector
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• Preparing the economy for the productive transformation whose vectors
are the industrial and agribusiness segments natural resource-intensive
1. The conditioning factors affecting Brazil’s positions (2)
Domestic factors:
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Economic dimension - Scenario hypothesis:
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increasing weight of sectors intensive in natural resources
transformation of the industry structure: less diversified but more competitive
consolidation of internationalised competitive segments in the service sector
continuity of the recent trend in Brazilian FDI.
Economic drivers lead to more offensive positions, but Brazil would also be concerned
with the preservation of “policy spaces” for dealing with productive transformation
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Political dimension: aspiration for active role and international recognition
Political driver lead to assumption of increasing responsibilities
1. The conditioning factors affecting Brazil’s positions (3)
External factors:
• Accession of China and Russia to the WTO: shift in the balance of power
within the multilateral trade system
• Growth in the number of PTAs, which might generate erosion of market
access conditions to Brazilian exports
• Small number of PTAs in which Brazil takes part
• Emergence of global challenges not directly associated to trade issues, but
having intersections with trade (climate change, food security,...)
WTO will continue to be the priority forum for Brazil, a position compatible
with domestic productive transformation and with the assumption by Brazil
of global responsibilities
2. Characteristics of trade multilateralism for Brazil
The main characteristics of multilateralism that fits Brazil’s interests:
• The consolidation and improvement of the existing rules
• The gradual incorporation of new issues into the agenda
Justification for putting emphasis on rules:
• Capacity of multilateral negotiations to generate improved market access
has been drastically reduced
• Trade flows are growingly being distorted by NTBs
• Efforts of tariff liberalization should be kept in the multilateral agenda, but
they can be pursued in the regional and bilateral fora
3.Brazil's multilateral trade agenda: drivers
Three elements were taken into account to define Brazil's thematic agenda in
the WTO and its main objectives in the negotiation of the selected issues:
• Economic and political importance of multilateralism for Brazil's
international strategy
• Profound changes introduced by the emergence of Asia require the
strengthening of rules that mitigate risks of unfair competition and of trade
conflicts and tensions
• Prospects of productive transformation of the Brazilian economy, which
allows for less defensive positions and for the incorporation of some new
issues in its multilateral trade agenda
3. Brazil's multilateral trade agenda: components (1)
Issues associated to the priority to multilateralism
• Rules for preferential agreements: mechanisms for monitoring and
revising preferential agreements and disciplines for preferential rules such
as RoO, TBT, SPS
• Dispute settlement system: central issues are related to the enforcement
of the decisions adopted
• Plurilateral agreements in the WTO: Brazil has traditionally opposed the
negotiation of these agreements in the WTO, but plurilaterals with a
conditional MFN clause may be necessary to allow progress
3. Brazil's multilateral trade agenda: components (2)
Issues associated to global transformations and implications for competition
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Industrial subsidies: strengthening the disciplines applicable to subsidies and the
reintroduction of a broadened concept of non-actionable subsidies, including the subsidies
contemplated by Article 8 of the ASCM
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Agricultural subsidies : progressive convergence of the treatments accorded to industry and
agriculture
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State-owned companies: setting of disciplines that promote transparency in the shareholding
control of the companies
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Non-tariff measures (NTMs): increase transparency regarding the use of public and private
standards. Plurilateral agreement on harmonization of NTMs
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Private norms and standards: this issue introduces a new challenge to the traditional limits of
the WTO. This discussion should be incorporated into the WTO agenda as such
3. Brazil's multilateral trade agenda: components (3)
Issues related to productive transformation in Brazil
• Investment: This could be an appropriate moment for reconsidering the traditional Brazilian
stance regarding agreements on investments protection (growth of Brazil’s outward FDI)
• Services: This issue is brought to the Brazilian agenda of priorities due to the need to
increase productivity and competitiveness in the services sector as the industry undergoes a
productive transformation
• Climate and Trade: The agenda should incorporate rules for BCAs and for subsidies and
enforcement of the disciplines applicable to technical norms
Exchange rates and trade: the only point of divergences