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Brazil's Lula slams rich nations on trade

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Geneva- Brazil's president, Luiz Inacio Lula da Silva, Monday slammed the world's leading industrialized countries for pursuing protectionist policies while preaching the virtues of free trade.

"Sectors in which developing countries have much more competitiveness such as in agribusiness, the textile industry, the steel industry, among many other sectors, are subject to protectionist trade practices from the highly industrialized world," he said in a keynote speech to the International Labor Organization here.

Lula said the resistance of the developed countries to eliminate the billions in agricultural subsidies, and their arbitrary practices, shows that they "are totally lacking coherence with their own defense of free trade.

This lack of coherence between speech discourse and practice provokes skepticism and mistrust." Lula's remarks echoed views shared by many other developing countries. Brazil has strong views on agriculture are very much shared by us, a WTO ambassador from a major agricultural exporting country, who spoke on condition of non-attribution, told United Press International.

"We cannot be passive and just gaze at the disparity that exists between the islands of wealth and oceans of poverty," said Lula, a former trade union leader and child laborer. But his remarks, coming less than a day after he and 12 other developing world leaders met with G-8 leaders during their annual summit Sunday in the resort town of Evian - on the French side of Lake Geneva - are at variance with the position of the G-8.

The G-8 includes the United States, Japan, Canada, Germany, the United Kingdom, France, Italy and Russia. The divergence of views reflects a growing North-South divide ahead of a crucial WTO ministerial meeting in Cancun, Mexico, in September to try to inject momentum in the troubled WTO Doha round talks which faces a Jan. 1, 2005, deadline.

The Indian prime minister, Atal Bihari Vajpayee, also pressed G-8 leaders Sunday on the need to remove trade distorting agricultural subsidies and to eliminate tariff and non-tariff barriers hindering developing poor countries exports, trade sources said. Kofi Annan, U.N. secretary-general, the chief of the World Trade Organization, Supachai Panitchpakdi, and the heads of the World Bank and the International Monetary Fund also attended.

On June 1, the U.N. chief told a G-8 leaders' session that developing countries "need better access to global markets, which means a Doha round that lowers agricultural subsidies and brings down barriers to imports from poorer countries.

"Ahead of the Evian summit, Annan in a letter to G-8 leaders argued that decisions on trade would be especially crucial for the developing world. "It is through trade that the peoples of developing countries can hope to share in, and contribute to, the general prosperity of mankind," Annan said.

Meanwhile, in a statement on trade issued Monday at Evian, the G-8 leaders stressed that they will provide leadership in the talks "so that improved access to markets for all WTO members is realized, particularly for the poorest.

"They also pointed out the global talks are central to the G-8's approach to "energizing the global economy," increasing development and eradicating poverty.

"The G-8 are facing realities and the message is clear. All G-8 countries are concerned to have a good (WTO) negotiation," said a senior trade negotiator from a G-8 country, who declined to be identified. "The message from the G8 is useful," he added. The G-8 also said they are committed that the Cancun conference.

However, the WTO talks - launched in November 2001 in Doha, Qatar, have missed crucial deadlines on agreeing to terms for lowering barriers to trade in agriculture - at the end of March and on industrial goods on May 31.

Global trade in goods and services last year totaled $7.7 trillion. The United States favors the elimination of agricultural export subsidies and slashing tariffs and domestic farm support measures. However, G-8 members France, Italy and Japan, with problematic farm sectors are apprehensive to radical trade reforms in this domain.

Similarly, the Bush administration which supports the scrapping of all industrial duties by 2015 in the current WTO talks, faces strong opposition from the troubled domestic steel and textiles industries.

Overall, G-8 countries want developing countries to also agree to deep tariff cuts, something many say they are not in a position to deliver because of their lower levels of development and continued high dependence on customs duties for government budgets.

WTO member countries have also yet to agree on terms to provide poor nations without adequate manufacturing capability can secure access to essential drugs to fight AIDS, tuberculosis, malaria and other epidemics.

A deal was nearly clinched last December but failed to materialize because of objections by the United States that it could put in jeopardy intellectual property rights of pharmaceutical companies. On June 2, the advocacy group Médecins Sans Frontières (MSF) denounced what it termed the G-8 countries "continued insistence on limiting the ability of developing countries to access affordable drugs.

"On a brighter note, Lula said that "with political will" one can correct distortions, fight hunger and poverty and establish equitable trade conditions. He said he was in favor of international trade "that should be truly free" to have much more investment in the productive sector, to have much more technological and scientific cooperation, Lula said.

"We need to integrate to the dynamic stream of the international economy so that we can modernize our societies," he added.