Bridges Weekly Trade News Digest • Volume 13 • Number 10 • 18th March 2009
Brazil’s Lula Presses Obama on Doha
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Brazilian President Luiz Inacio Lula da Silva paid a visit to the White House on Saturday, making him the first Latin American head of state to meet with US President Barack Obama in Washington. The two leaders discussed the global financial crisis and ongoing world trade talks at the WTO, with Lula leaning on his US counterpart to push for movement in the negotiations.
“We need to discuss the Doha Round,” Lula said before the meeting, referring to the WTO talks. “We need to make it clear that protectionism can offer some short-term relief, but in the medium term, it can cause a disaster in the world economy,” he said. “Brazil is against the return of protectionism.”
Brazil, the world’s tenth-largest economy and major agricultural exporter, has long pushed for a conclusion to the Doha Round. But the Obama administration has not been as explicit in its support for a deal that would lock in tariff and subsidy cuts.
“It may be difficult for us to finalise a whole host of trade deals in the midst of an economic crisis like this one,” Obama said. But the US has “committed to sitting down with our Brazilian counterparts to find ways that we can start closing the gap on the Doha Round and other potential trade agreements,” he added.
The leaders also discussed ethanol production, which Obama acknowledged had been “a source of tension between the two countries.”
The US slaps a tariff of US$ 0.14 per litre (US$ 0.54 per gallon) on imports of biofuels, a measure that critics say is a protectionist tactic intended to tilt the playing field in favour of US corn producers. Last summer, Brazil threatened to challenge the tariff at the WTO’s Dispute Settlement Body (see Bridges Weekly, 4 September 2008, http://ictsd.net/i/news/bridgesweekly/27688/). But no official complaint has been filed.
“It’s not going to change overnight, but I do think that as we continue to build exchanges of ideas, commerce, trade around the issue of biodiesel, that over time this source of tension can get resolved,” Obama said.
The US is the world’s largest producer of the biofuel, while Brazil is the largest exporter.
Lula continued his US tour this week, meeting with business leaders in New York City.
ICTSD reporting; “Lula to talk credit, protectionism with Obama,” REUTERS, 13 March 2009; “Obama says investors can be fully confident in US,” BLOOMBERG, 14 March 2009.
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