MercoPress. South Atlantic News Agency

Brazil/US closer to a formal trade agreement

Brazil and the United States signed a letter of intent for the creation of mechanisms to promote bilateral trade and foster business dealings, including ethanol, but left aside more ambitious goals such as a full-fledged free trade agreement.

The first meeting in Rio do Janeiro of the mechanism for informal bilateral consultations was headed by U.S. Commerce Secretary Carlos Gutierrez and Brazilian Development, Industry and Trade Minister Luiz Fernando Furlan.

Gutierrez said that Washington was seeking bilateral accords with regions and other countries all around the world, including Brazil.

He said the U.S. government believed that the Americas have a great future in store. "The establishment of this commercial dialogue with Brazil is a priority for the Bush Administration ... We are working hard with our Brazilian counterparts to ensure that this Commercial Dialogue delivers concrete steps to make both of our nations more competitive in the global economy," he said.

"By making it easier to conduct trade and investment between our two countries we can create a win-win situation for both Brazil and the United States," Gutierrez added, also emphasizing the need to push for greater trade integration between Washington and the rest of the hemisphere.

U.S.-Brazilian trade amounts to some 40 billion US dollars annually.

Gutierrez did not refer directly to the U.S.-sponsored Free Trade Area of the Americas, or FTAA, a measure that has stalled largely because Brazil and the other members of Mercosur have rejected the terms initially proposed by Washington.

He did, however, refer to bilateral trade agreements signed between the United States and Chile, Peru, Central America and the Dominican Republic that seemed to have emerged as a secondary option for binding together a global bloc that would unify the trade markets from Canada to Argentina.

But a number of issues have remained sidelined in discussions with Brazil, including protection of intellectual and investment property, customs barriers and the liberalization of services.

Analysts say that agreement would be essential on these and other points to achieve substantial advances on trade matters among Washington, Brasilia and the other Mercosur nations of Argentina, Paraguay and Uruguay.

Brazil wants Washington to substantially reduce tariffs on imports of ethanol produced from sugar cane. The South American country is the world's largest producer and exporter of the fuel, which is often mixed with gasoline.

Gutierrez recalled that Washington has been pursuing a strategy to diversity its sources of energy and reduce vulnerability in that area.