Brazil’s Bilateral and Plurilateral Trade Agenda

Trade relevant facts(2003)

Annual export: USD 83 bio ~ 1,2% of world tradeIndustrial exports amount to ~ 60% of Brazil’s total exportsAgricultural exports amount to ~ 40% of Brazil’s total exportsRanks third in world share of total agricultural exports3% of world’s population, GDP and investments7th biggest consumer in the world15th biggest economy in the worldOne of the BRICs

Context for RTAs post-1985

Democratization

”Lost decade”

Liberalization

International insertion

1985-today

Plurilateral

MERCOSUR (1991)

Bilateral

MERCOSUR-Bolivia Association Agreement (1996)

MERCOSUR-Chile Association Agreement (1996)

Ongoing negotiations

Bilateral MERCOSUR-EU MERCOSUR-SACU MERCOSUR-

Colombia, Venezuela, Ecuador

MERCOSUR-Peru MERCOSUR-Mexico MERCOSUR-India MERCOSUR-Egypt

Plurilateral FTAA

EU-MERCOSUR and FTAA

Background

Issues

Threats & Opportunities

Status

Link to Doha Development Agenda

Trade relations(2003)

Export Import Industrial share

Agricultural share

EU ~22% ~24% ~50%

FTAA ~55% ~ 50% ~70%

Timeline

Preparatory phase

FormalLaunch

Conclusion EiF

FTAA 1994-1998 1998 01.05 12.05

EU-MERCOSUR

1995-1999 1999 10.04

Issues

One (FTAA) vs. three (EU-MERCOSUR) pillars

All WTO-trade areas on the table

Labour and environment excluded

Scope differs

Political and strategic threats

EU-MERCOSUR Negotiation is test

case for MERCOSUR

Future policy autonomy

Compromising perception of Brazil as developing country leader

FTAA Negotiation is test

case for MERCOSUR

Can MERCOSUR survive in an FTAA?

Future policy autonomy

Brazil isolated in its ”own region”

…and opportunities

EU-MERCOSUR Institutional

strengthening of MERCOSUR

Power equilibrium

FTAA Lock-in of reforms at

national level

Socio-economic threats

EU-MERCOSUR Erosion of gains vis-

à-vis the WTO Limited gains in

industry ”Sensitive issues”

FTAA Erosion of gains vis-

à-vis the WTO Limited gains in

agriculture ”Sensitive issues”

…and opportunities

EU-MERCOSUR Increased

agricultural exports Increased

investments

FTAA Increased industrial

exports to the US Increased

investments ”Investment

guarantee” Protection of

preferential access to US market

Status

EU-MERCOSUR Exchanging offers Possibility of meeting in

October New Commission Probable extension of

deadline What happens in the

WTO?

FTAA Standstill: Offers and

modalities New president No new meeting

scheduled Extension of deadline Bilateralisation within the

negotiation What happens in the

WTO?

Link to the WTO

Timing

Issues

Alliances

Concessions

Future perspectives

Conclude ongoing pluri- and bilateral negotiations?

Initiate new bilateral negotiations? MERCOSUR-Central America MERCOSUR-Japan MERCOSUR-China MERCOSUR-South Korea MERCOSUR-Thailand MERCOSUR-Russia MERCOSUR-Morocco

Conclusions

2003-2004: Mixed results for Brazil’s regional and multilateral negotiationsBilateralization of trade agreements in the Western HemisphereIncreased focus on South-South bilateral trade agreements combined with a wait-and-see approach concerning the FTAA and EU-MERCOSUR negotiationsSouth-South trade cannot in the short run replace US and EU, but importance has increased, both economically and strategicallyComplementary strategy is still needed