Brazil industry leaders skeptical on Doha progress

Tue Mar 25, 2008 3:56pm EDT

By Raymond Colitt

BRASILIA, March 25 (Reuters) - Brazilian industry leaders on Tuesday welcomed signs of progress in the Doha round of world trade talks but were skeptical that a deal could be reached this year.

"There's been progress but with a global financial crisis and U.S. elections, it will be very difficult to agree on the final numbers," Soraya Rosar, director of international negotiations with the National Industry Confederation, said in an interview.

Brazil, a global agricultural powerhouse, has been a key player in the Doha round as leader of the G20 group of developing nations demanding freer farm trade.

The presidents of Brazil and the European Commission said last week they were optimistic a deal could be reached shortly.

Increased European and U.S. willingness in general and more flexibility on industry tariffs in particular brought negotiators closer to a deal in recent weeks, Brazil's chief negotiator Roberto Azevedo told Reuters on Monday.

Under the more flexible proposal currently discussed, leading developing countries like Brazil and India could choose either a lower overall tariff cut on manufactured products with few exemptions or a higher overall cut with more exemptions.

But agreeing on the actual numbers will remain a daunting challenge, said Fernando Pimentel, director of the Brazilian Textile Association.

"God and the devil are in the detail. It's a good start but we shouldn't rely on a Doha deal," said Pimentel, who favors bilateral trade talks with other countries and blocs.

Leaders of Latin America's largest economy doubt whether Brussels and Washington will deliver.

SIGNS 'NOT GOOD'

"The signs are not particularly good," said Mario Marconini, director of international negotiations with the influential Sao Paulo industry federation Fiesp.

"The White House seems more optimistic than the U.S. Trade Representative," he said in reference to recent talks he held with officials in Washington.

Brazil is also uncertain of support from its allies.

"We don't know whether our own partners -- like South Africa and Argentina -- will stand by us," Marconini said.

Brazil's proposed exemptions total 13 percent of manufactured products, including certain shoes, textiles, and chemical products. Argentina's list of exemptions reaches 16 percent, both well above the initial 10 percent limit proposed within the Doha round, the confederation's Rosar said.

As members of the South American customs union Mercosur, both countries coordinate their proposals.

The Doha round, launched in 2001 to boost the global economy and ease poverty in the developing world, has repeatedly missed deadlines and stalled.

“The only way to conclude the Doha round this year, is if everybody agrees on a less ambitious accord," Rosar said.

Azevedo is traveling to Geneva on Sunday to resume negotiations within the World Trade Organization.

(Editing by Cynthia Osterman)