Q&A: Luiz Filipe De Seixas Correa, Brazilian ambassador to WTO

Luiz Filipe De
Seixas Correa

Luiz Filipe De Seixas Correa, Brazilian ambassador to the World Trade Organisation (WTO), was in Delhi to attend the 39th session of the International Textiles and Clothing Bureau (ITCB) and also to discuss the strategy of the alliance of developing countries on agricultural negotiations with members of the G-20, for which Brazil is the coordinator.

"The old fox", as a commerce ministry official describes him, spoke to Business Standard about the future of the stalled trade negotiations and the roadmap charted out by the G-20.

Excerpts:

What role do you see for the G-20?

We [Brazil] are working in a coordinated fashion with India, since the two countries gave birth to the G-20. The alliance was capable of putting up a united front against the threat from the US and the European Union (EU) to the Doha mandate. We won a part of the war when we prevented the US-EU effort to push their argument at Cancun. Had a decision been taken [at Cancun], it would have been incompatible with the Doha mandate. But the war goes on.

The G-20 is now putting up a consolidated and coherent position and means business. The other participants respect us. This was not the case at Cancun because they were attacking us. There were many arguments on who should be blamed for the Cancun failure. But now all that is over and everyone is trying to see how best to put the negotiations back on track.

What is the state of play on agricultural negotiations? Much progress has not been made since....

We are trying to fix a general framework for negotiations. The Doha mandate is complicated because it is for the first time that we are dealing with agriculture, and agriculture is very confusing. The agreement on textiles took 40 years before it was brought under the GATT [General Agreement on Tariffs and Trade] rules, and even now, everyone is saying what next. In agriculture, we are at the beginning.

We are having this round because we could not negotiate under normal circumstances in the Uruguay Round. The other areas were introduced in this round to get a balance, or perhaps it was a delaying tactic [for agriculture].

You can see the current situation in two ways. You can say it is positive because we are making a programme and we are collectively pressing for negotiations. If you look at the situation from a different angle, then perhaps you can say that we are not making any progress, we have missed deadlines and that we are not even close to fixing modalities.

We are just discussing the framework for negotiations, which is somewhere between the mandate and the modalities. You can also say that we are trying to achieve "" what we could not achieve at Cancun "" the framework stage by July, almost a year late with only three months to go for the new deadline.

But [even in July] we may not be in a very different position than Cancun, from a substantive point of view. The only change is that we have a nicer environment. Instead of being nasty to each other, as was the case at one point, we are now willing to discuss things.

But do you think there will be any progress in the immediate future?

For us, the Big Two [the US and the EU] "" who are the subsidisers "" are the ones who have to move to create the necessary environment for developing countries to move. They ask for market access and we are all prepared for that, under certain circumstances. But how can you ask us to do that when subsidies still prevail?

In order to generate momentum, we have to see some movement on their part. We saw some from the EU when it announced a programme for domestic support reduction, but we are not convinced if that movement is enough. Given the US subsidies, we do not know if there will be a reduction or just a shift from one box to another, since I don't bother about the colour of the box. On export subsidies too, we want a real commitment from the EU and it should set a calendar for phasing out and eliminating them.

We want the US to do the same on export credits and the food aid programme. But how all this can be expressed in the framework is tough. Should we go for a general framework or seek specific levels? We have to see if the reality would match real commitments. Only after this is achieved can we talks of market reforms without distortions.

In the past few months, the US and the EU have talked of resuming dialogue but there is little to show for any significant change in their positions.....

In recent months, after the post-Cancun blues were over, we started getting some signals from the big two that they were prepared to move on with export subsidies. This was something like a bait that led to the meeting in Geneva in March. The signals persisted, though none of us were convinced to say that these signals would transform into reality.

The illusion is still there but it is normal since all of us want the opponents' image blurred. But they have to understand that they have to transform the optical illusion into real views. Although we left the negotiating table, we have enough gas for the next phase of talks on April 20. They have indicated that they would move but it is yet to materialise into commitment.

What are the indications that lead you to believe that there would be movement?

The EU proposal on domestic support contains some indications, but the US still has to show any movement although it says that it can do it. The problem is that the big two tend to see things as if it is a bilateral problem.

Assuming the Big Two concede on subsidies, do you see a situation where some members of the G-20 push for higher tariff cuts than the others?

The G-20 is united on reduction of tariffs and subsidies. All of us want special and differential treatment for developing countries and recognise the need to have a set of special products. We recognise the specific situations of Brazil and Argentina "" which are big agricultural exporters "" and India, China and the others, who have livelihood concerns. There is no division among us. We solved that abstract problem when the G-20 was formed.

Does agriculture hold the key to negotiations in other spheres like industrial tariffs and services?

In these negotiations, everything is linked to everything and nothing will move until all move. But agriculture is at the centre. The sequencing is such that if agriculture moves, the conditions for other negotiations will be created. It is not irrational to say so because this round exists because of agriculture.

Will the G-20 seek numbers in the framework for negotiations?

We actually say that the framework should have no numbers. We want respect for the level of ambition for the Doha mandate and that is why Cancun failed. In Cancun, we perceived that the level of ambition was lower than the mandate. But the formula on market access [tariff reduction] will be tricky because a formula without numbers can be used in very different ways. The formula has to be accompanied by parameters that circumscribe the debate on certain goals compatible with the mandate.

How do you see things in July when the framework is to be prepared? Will the WTO members be able to meet the new deadline?

Your guess is as good as mine. We would have something by July but at this stage I can't say what we will have. It can either be a full-fledged framework or something less. But there will be something in place because everyone is concerned about keeping the round going in a credible fashion.

We are hopeful that we can get some good language on the table. We are increasing the coordination between G-20 members. The negotiating circus is on and it has many rings. We are all acting at different levels. This occasion in Delhi was very useful.

Do you think the WTO membership will be able to stick to the December deadline for completing negotiations on all issues in this round?

Although everyone is trying hard, the general impression among negotiators is that it would be difficult to stick to the deadline, given the political situation with elections in the US and in many other countries, and the change of guard in the EU.