MercoPress. South Atlantic News Agency

Brazilian officials: We'd rather negotiate with EU than U.S.

The Brazilian government, which is at odds with Washington over the planned Free Trade Area of the Americas, or FTAA, said Monday that it would be easier and more profitable for the Mercosur trade bloc to negotiate with the EU.

Two members of President Luiz Inacio Lula da Silva's Cabinet said that European nations are introducing "important changes" to its common agricultural policy that clear the way for a free-trade agreement between the European Union and Mercosur, a bloc comprising Brazil, Argentina, Uruguay and Paraguay.

The issue of farm subsidies has been a sore point in negotiations aimed at making the U.S.-sponsored FTAA a reality by 2005.

Big agricultural exporting nations such as Brazil are pressing the United States to drastically reduce the huge subsidies paid to farmers, saying such payments distort markets and hurt non-U.S. growers.

According to Brazilian Agriculture Minister Roberto Rodrigues, the EU decision to revise its agricultural policy goes beyond trade issues, and is "a very important political signal." Foreign Trade Minister Luiz Fernando Furlan added that the negotiations between Mercosur and the EU were easier because they involved a smaller number of countries.

"In the FTAA, negotiations involve 34 countries, which makes debate more difficult," said Furlan, an agribusiness executive.

He added that, in his opinion, both sets of negotiations could conclude simultaneously. The ministers made their comments while attending a meeting with business leaders from Germany and Brazil in the central city of Goiania aimed at promoting investment in agribusiness.

The subject of ending rich countries' farm subsidies, currently one of the main themes of Brazil's foreign policy, was discussed at the gathering.

The EU's decision to revise its common agricultural policy, promising to reduce subsidies, moved the negotiations along considerably, Furlan said.

Agribusiness is Brazil's principal economic activity and its main export earner.

For his part, Rodrigues, whose criticism of the United States has been sharper than Furlan's, blasted Washington's "lack of ambition" concerning the FTAA.

"After Cancun, the United States decreased the intensity of the negotiations, and for this reason the FTAA is not progressing," he insisted.

Washington's position leaves Mercosur free to negotiate an agreement with Europe, he said.

The most recent round of negotiations under the auspices of the World Trade Organization, held in Cancun, Mexico, at the beginning of October, ended in failure. Brazil, which led a group of developing countries in opposing agricultural subsidies at the meeting, attributed the failure to U.S. "intransigence" on this issue.