Letter from President Luiz Inácio Lula da Silva to European Leaders

(25 October, 2005)


"With the coming WTO Ministerial Conference in Hong Kong, the Doha Round negotiations enter now in a critical phase. The negotiations on Agriculture, the engine, presently face the perspective of a possible paralysis.

In October, following the commitment assumed by President George W. Bush at the G-8 Meeting, in Gleneagles, the United States presented a proposal to reduce domestic subsidies in Agriculture. Even if it does not fully meet our expectations of a “substantial reduction” of current subsidies levels, this proposal was an important step and an incentive to the G-20, the grouping of developing countries interested in Agriculture, to present ambitious proposals concerning the reduction of domestic support and cuts on tariff and non-tariff barriers. Concerning market access, the G-20 proposal constitutes the middle ground between the US and the European proposals. Basically, the G-20 proposes that both developed and developing countries make a step beyond that made during the Uruguay Round in terms of market liberalization. Brazil and the G-20 are ready, as demonstrated in our proposals, to play their part, if the main partners are animated by a sense of balance and proportion.

Now, we await with great interest that the European Union presents, this week, its contribution on market access. We nurture the expectation that the proposal contemplates an effective market opening for agricultural products, both processed and unprocessed, from developing countries.

As the first importer of agricultural goods, the EU plays a pivotal role in the international trade. Therefore, the upcoming European proposal for the negotiations in Agriculture will define the size of the contribution the other countries will give to the negotiation in this area. The EU proposal on Agriculture will also be used as an important reference to the efforts Brazil might undertake in areas such as industrial tariffs (NAMA) and Services. Moreover, considering the close links between the different pillars of the agricultural negotiations, an effective EU move, representing a real market liberalization, will provide an incentive to other partners, particularly the United States, to make additional moves, which we consider essential, in the field of domestic support.

Finally, I wish to point out that I am aware of the fact that some developing countries which benefit from preferential treatment in the European or US markets may have ambivalent positions regarding tariff reductions. However, I am sure Your Excellency will agree with me that keeping a dependency on a few products and markets, based on artificially high tariffs, will not assist those countries to develop in an autonomous and sustainable way. Brazil already recognizes and applies the principle of asymmetry in its relations with poorer developing countries. Brazil also reiterates its intention to work towards providing those countries adequate treatment to their needs, and will be ready to cooperate with the EU to find a fair and equitable formula to reach this goal.

Therefore, at this crucial juncture, I would value Your Excellency’s cooperation in attempting to influence the EU proposal on market access in agricultural market access, so that it provides impetus to the negotiations. This will only happen if a significant reduction in tariff- and non-tariff barriers is achieved – a reduction that goes beyond what was agreed in the Uruguay Round. The success of the Hong Kong Ministerial Conference, and indeed of the Doha Round itself, depends on the efforts our EU partners are able to make in this area of trade that is so vital for developing countries."