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TRADE POLICY REVIEWS: FIRST PRESS RELEASE, SECRETARIAT AND GOVERNMENT SUMMARIES

PRESS RELEASE
PRESS/TPRB/140
1 November 2000
Brazil: November 2000

Brazil's economic reform, which was initiated over a decade ago has led to a more open trade and investment regimes and, during the last four years, has produced a more market-driven, decentralized environment through the deregulation of state monopolies and prices, investment liberalization and privatization, says a new WTO report on the trade policies of Brazil. The report adds that the resulting improved resource allocation and greater flexibility have helped the economy to deal successfully with external and other shocks, facilitating in particular a rapid recovery from the financial crisis that lead to the floating of the real in 1999.

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See also:

Second press release
Chairperson’s concluding remarks


Brazil economic reform has led to a more market-driven, decentralized and flexible economic environment  Back to top

The report notes that a market-set exchange rate would now seem to provide the opportunity for Brazil to reduce, and perhaps remove, some measures taken to restrict imports or support exports, and to make a definitive break from traces of past inward-looking policies. These and other reforms aimed at fostering an undistorted balance between exports and Brazil's large domestic market offer a positive strategy to achieve and sustain higher economic growth.

The WTO report, along with a policy statement by the Government of Brazil, will serve as the basis for the trade policy review of Brazil which will take place on 30 October and 1st of November in the Trade Policy Review Body of the WTO.

Developments in economic activity were better than expected after the financial crisis of late 1998 and the prospects are for real growth of 4% in 2000, says the report. Inflation has been kept in line with the Government's target of 8%. Foreign direct investment (FDI) has increased substantially since 1996, exceeding US$30 billion in 1999. Although FDI has been stimulated by privatization, an important share has been autonomous reflecting the attractiveness of a large internal market, better access to other MERCOSUR markets, and the improved market-orientation of the policy environment. Brazil's trade as a percentage of GDP remained stable at some 20% during the period under review. Brazil remains the world's largest exporter of several agricultural products including coffee, orange juice and sugar. The United States and MERCOSUR, especially Argentina, are Brazil's most important markets, followed by the European Union (EU). The main suppliers to Brazil are, in decreasing importance, the EU, the United States, and Argentina.

The report states that foreign trade in Brazil is governed by a large number of laws, provisional measures (MPs), decrees, and resolutions, which have created an intricate web of statutes; its simplification, for example through the single trade law mentioned during Brazil's previous Review, could enhance transparency. Trade-related laws are amended frequently, including through the use of MPs issued autonomously by the President. Some amendments have helped speed up certain reforms but they may also have lessened the predictability of the regulatory structure for traders.

Brazil's main trade instrument is the tariff, whose structure and level are largely determined by a programme of convergence towards MERCOSUR's Common External Tariff (CET). In 1997, Brazil temporarily raised the tariff by three percentage points. In addition, tariffs for capital goods not produced domestically were increased from zero to 5%. As a result, since 1996 the average MFN tariff has increased to 13.7% (from 12.5%); the temporary three percentage points increase is due to be removed by end 2000. Although dispersion has fallen, escalation is still present. Brazil has bound its tariff but mostly at rates higher than applied rates; closing this gap would further improve predictability. A number of rates in the tariff schedule exceed bound levels, but Brazilian legislation requires abidance by bindings in such cases.

Automatic import licences are in place for statistical purposes and to monitor trade flow, the report says. Brazil's import licensing regime has been the subject of consultations between Brazil and some WTO Members, and is currently under review. The country is an active user of contingency measures, mainly anti-dumping.

Since 1996, protection of intellectual property rights has been enhanced through the passage of new legislation and greater enforcement efforts.

The report also notes that State involvement in production activities in Brazil has diminished substantially and distortions to inter-sectoral incentives have been reduced through the progressive adoption of more neutral sectoral policies. However, some current policies echo earlier import substitution strategies, with incentives favoring some activities while implicitly taxing others. Brazil is one of the world's major producers and exporters of agricultural products. Government intervention in the sector has decreased; support programmes, mostly minimum-price supports and rural credit at preferential rates, are targeted at assisting low-income farmers in disadvantaged areas. Assistance to agriculture appears modest, especially in the context of market distortions introduced by the support provided to agriculture in other countries, a problem that remains of major concern to the Brazilian authorities.

Since 1996, there has been significant liberalization in the services sector, mainly in telecommunications and financial services. The entry of foreign banks since 1996 has led to increased competition and efficiency in the banking system but persistent relatively large interest rate spreads suggest the possibility for further efficiency gains. Reforms have yet to produce the required improvements in activities such as transportation. Brazil took an active role in the multilateral Negotiations on Financial Services and in the Negotiations on Basic Telecommunications, making offers representing improvements on its Uruguay Round commitments in both sectors, according to the report.

As a developing country, Brazil benefited from a transition period to implement a number of commitments under various WTO Agreements. Since 1996, Brazil has been involved in 16 cases under the WTO dispute settlement mechanism, seven as a complainant and nine as a defendant; it has participated as a third party in four disputes. Brazil grants at least MFN treatment to all its trading partners. Brazil's main trade policy objective has been the implementation of the trade agreements negotiated at the beginning of the 1990s, namely the Uruguay Round and MERCOSUR. Better market access conditions for Brazilian products are also a key item on its trade agenda.

The report says that Brazil gives great importance to deepening integration in South America; it is the region's largest economy and trader, and is playing a key role in that process. Accordingly, one of Brazil's major trade objectives is the completion of MERCOSUR, by including the sectors currently excluded from free trade (i.e. automobiles and sugar), the progressive elimination of the exceptions to the CET, the coordination of economic policies, and the deepening of integration in new areas. Another key element of Brazil's agenda is the pursuit of negotiations with the European Union; efforts involving the United States, Brazil's main single trading partner, take place mostly through the Free Trade Area of the Americas initiative.

Notes to Editors

Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals. Significant developments which may have an impact on the global trading system are also monitored. For each review, two documents are prepared: a policy statement by the government of the member under review, and a detailed report written independently by the WTO Secretariat. These two documents are then discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). These documents and the proceedings of the TPRB’s meetings are published shortly afterwards. Since 1995, when the WTO came into force, services and trade-related aspects of intellectual property rights have also been covered.

For this review, the WTO’s Secretariat report, together with the policy statement prepared by the Government of Brazil , will be discussed by the Trade Policy Review Body on 30 October and 1 of November 2000. The Secretariat report covers the development of all aspects of Brazil's trade policies, including domestic laws and regulations, the institutional framework, trade policies by measure and by sector.

Attached to this press release is a summary of the observations in the Secretariat report and parts of the government's policy statement. The Secretariat report and the government’s policy statement are available for the press in the newsroom of the WTO internet site (www.wto.org). These two documents and the minutes of the TPRB’s discussion and the Chairman’s summing up, will be published in hardback in due course and will be available from the Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992 and 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), C˘te d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2.000), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995 and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

  
  
The Secretariat’s report: summary  Back to top

TRADE POLICY REVIEW BODY: BRAZIL
Report by the Secretariat – Summary Observations

Introduction

Since its previous Trade Policy Review in 1996, Brazil has continued its programme of economic reform, which was initiated over a decade ago and has, over time, led to visibly more open trade and investment regimes. Thus, during the last four years, more neutral sectoral policies have been adopted and a more market-driven, decentralized environment has emerged through the deregulation of state monopolies and prices, investment liberalization, and privatization. The resulting improved resource allocation and greater flexibility have helped the economy to deal successfully with external and other shocks, facilitating in particular a rapid recovery from the financial crisis that lead to the floating of the real in 1999.

A market-set exchange rate would now seem to provide the opportunity for Brazil to reduce, and perhaps remove, some measures taken to restrict imports or support exports, and to make a definitive break from traces of past inward-looking policies. Indeed, steps have already been taken in this direction. Nevertheless, further reforms would be useful to lessen the anti-export bias present in the tariff structure, rationalize the use of tariff concessions and of non-tariff measures, reduce remaining investment barriers and improve the provision of credit. These and other reforms aimed at fostering an undistorted balance between exports and Brazil's large domestic market offer a positive strategy to achieve and sustain higher economic growth. This is important because Brazil still faces the long-term challenge of increasing GDP per capita, which in real terms is just slightly higher than at the end of the 1980s.

MACROECONOMIC DEVELOPMENTS

The main macroeconomic development since Brazil's previous Review was the financial crisis of late 1998, and the subsequent floating of the real in January 1999, which has since depreciated some 30% against the U.S. dollar. Economic growth has been uneven in recent years, real GDP expanding at an average annual rate of about 1.7% during 1996-99, down from some 3.3% in the previous four years. However, developments in economic activity were better than expected after the financial crisis and the prospects are for real growth of 4% in 2000. Inflation has been kept in line with the Government's target of 8%, reflecting the firm stance of macroeconomic policies, the absence of a formal indexation mechanism, and the still significant output gap.

Foreign direct investment (FDI) has increased substantially since 1996, exceeding US$30 billion in 1999. Although FDI has been stimulated by privatization, an important share has been autonomous reflecting the attractiveness of a large internal market, better access to other MERCOSUR markets, and the improved market-orientation of the policy environment. FDI flows more than cover the current account deficit (4.5% of GDP in 1999). This deficit has declined notwithstanding export growth having been dampened by a deterioration in terms of trade. However, the current account deficit would seem to be of some concern, in part because of Brazil's large external debt, and the authorities are seeking to improve export performance so as to narrow the trade deficit or move into surplus. Brazilian trade policy thus features a series of measures aimed at export promotion, both through financial support and trade facilitation.

Brazil's trade as a percentage of GDP remained stable at some 20% during the period under review. There been no major changes in the composition of Brazilian merchandise trade, the share of primary products in total exports declining only slightly with a corresponding increase in manufactured exports, namely aircraft and automotive products. Brazil remains the world's largest exporter of several agricultural products including coffee, orange juice and sugar. The United States and MERCOSUR, especially Argentina, are Brazil's most important markets, followed by the European Union (EU). The main suppliers to Brazil are, in decreasing importance, the EU, the United States, and Argentina.

INSTITUTIONAL ENVIRONMENT

There have been no significant changes to the general structure of trade policy formulation or implementation in Brazil. The Chamber of Foreign Trade (CAMEX), created in 1995, formulates and coordinates trade policy. CAMEX is presided by the Minister of Development, Industry and Foreign Trade, and includes five other ministers and the President of the Central Bank. The Chamber coordinates the implementation of its decisions, but each ministry remains responsible for matters within its competence.

Foreign trade in Brazil is governed by a large number of laws, provisional measures (MPs), decrees, and resolutions, which have created an intricate web of statutes; its simplification, for example through the single trade law mentioned during Brazil's previous Review, could enhance transparency. Trade-related laws are amended frequently, including through the use of MPs issued autonomously by the President. Some amendments have helped speed up certain reforms but they may also have lessened the predictability of the regulatory structure for traders.

FDI has been encouraged by Brazil's favourable policy stance, which generally accords national treatment to all foreign investment. The Federal Government does not grant special incentives to FDI other than those available to investment in general, which vary by state. Remaining trade barriers in combination with a relatively liberal investment environment have probably led to tariff-jumping foreign investment. As the economy has become more open and as privatization continues, competition policy is gaining importance in Brazil.

TRADE POLICY DEVELOPMENTS

Brazil's main trade instrument is the tariff, whose structure and level are largely determined by a programme of convergence towards MERCOSUR's Common External Tariff (CET). In 1997, Brazil temporarily raised the tariff by three percentage points. In addition, tariffs for capital goods not produced domestically were increased from zero to 5%. As a result, since 1996 the average MFN tariff has increased to 13.7% (from 12.5%); the temporary three percentage points increase is due to be removed by end 2000. Although dispersion has fallen, escalation is still present. Brazil has bound its tariff but mostly at rates higher than applied rates; closing this gap would further improve predictability. A number of rates in the tariff schedule exceed bound levels, but Brazilian legislation requires abidance by bindings in such cases.

As foreshadowed in its previous Review, Brazil has simplified import procedures through the implementation of SISCOMEX, a computerized system for customs clearance. Import financing rules imposed in 1997 were removed in 1999; such rules often required importers to purchase foreign exchange to pay for imports either upon importation or 180 days in advance. Still in force are the lighthouse fee, applied only to foreign flag vessels, and the Merchant Marine Renewal Tax (AFRMM) on imports transported by sea.

Automatic import licences are in place for statistical purposes and to monitor trade flows. Imports subject to non-automatic licensing include products subject to a zero import duty rate, tariff quotas, the drawback regime or the “Law of Similars”. The latter aims to prevent the importation of goods when similar goods are produced domestically; it is mostly used in specific cases, e.g. certain government imports or imports of capital goods. Brazil's import licensing regime has been the subject of consultations between Brazil and some WTO Members, and is currently under review. Some import prohibitions would seem to be in place largely for economic reasons, for example the bans on the importation of used automobiles and several other consumer goods.

Brazil is an active user of contingency measures, mainly anti-dumping; there are some 46 anti-dumping measures in force. Over 1996-99, 72 anti-dumping investigations were initiated leading to the imposition of definitive duties in 36 cases. Brazilian products have been the target of several anti-dumping investigations in foreign markets. Brazil supports negotiations on the WTO Anti-Dumping Agreement. Brazil applies safeguard measure to toys, except for imports from some developing countries, which have been extended to end 2003. During the period under review, Brazil also applied the transitional safeguard of the Agreement on Textiles and Clothing.

Export promotion has been one of the key elements of Brazil's trade policy, partly to offset domestic inefficiencies such as poor infrastructure, inefficient financial intermediation, a cascading tax system and, until 1999, an overvalued exchange rate. Several export financing programmes and export guarantee funds are available including PROEX, an export credit programme the subject of a dispute in the WTO. Brazil also makes widespread use of regional support programmes in the form of fiscal incentives, including tax and duty exemptions for selective activities notably the automotive sector. All products are in principle subject to export taxes but, following the zero-rating of the duty on sugar, only cured leather appears to be currently taxed.

Since 1996, protection of intellectual property rights has been enhanced through the passage of new legislation and greater enforcement efforts. Brazil is not a member of the WTO Plurilateral Agreement on Government Procurement. In general, the law offers non-discriminatory treatment to all bidders but in certain cases preference is given to Brazilian suppliers or products.

SECTORAL POLICY DEVELOPMENTS

State involvement in production activities in Brazil has diminished substantially and distortions to inter-sectoral incentives have been reduced through the progressive adoption of more neutral sectoral policies, for example the cut back or ending of special programmes for alcohol production and informatics. However, some current policies echo earlier import substitution strategies, with incentives favoring some activities while implicitly taxing others. Thus, well above average tariffs apply to beverages, tobacco, furniture, clothing, and footwear, while tariff dispersion is particularly high for transport equipment and electronics.

Brazil has a highly diversified manufacturing sector. During the period under review, specific support programmes in the sector were applied to steel, automobiles, aircraft, and shipbuilding industries. These industries are often also the target of government assistance in other major producing countries. The Brazilian automotive regime was largely phased out as scheduled in December 1999. Assistance to the aircraft industry, through export financing, has played a role in the dynamism of this sector, especially in terms of export performance.

Brazil is one of the world's major producers and exporters of agricultural products. Government intervention in the sector has decreased; support programmes, mostly minimum-price supports and rural credit at preferential rates, are targeted at assisting low-income farmers in disadvantaged areas. Assistance to agriculture appears modest, especially in the context of market distortions introduced by the support provided to agriculture in other countries, a problem that remains of major concern to the Brazilian authorities.

Important changes have affected Brazil's energy sector since 1996. Supported by a regulatory framework introduced in 1998, the process of privatization of power utilities has attracted sizeable private investment. Current plans to increase private participation in the national oil company follow the adoption of a new petroleum law in 1997. Nevertheless, state involvement in the sector is still considerable; limitations on foreign capital participation and procurement also remain, as do price controls.

Since 1996, there has been significant liberalization in the services sector, mainly in telecommunications and financial services. The entry of foreign banks since 1996 has led to increased competition and efficiency in the banking system but persistent relatively large interest rate spreads suggest the possibility for further efficiency gains. Reforms have yet to produce the required improvements in activities such as transportation. Thus, additional efforts to improve the provision of services appear essential to support an outward-oriented development strategy.

TRADE POLICY AND FOREIGN TRADING PARTNERS

Brazil grants at least MFN treatment to all its trading partners. Brazil's main trade policy objective has been the implementation of the trade agreements negotiated at the beginning of the 1990s, namely the Uruguay Round and MERCOSUR. Better market access conditions for Brazilian products are also a key item on its trade agenda.

Brazil is a founding member of the WTO. Multilateral agreements are an integral part of Brazil's legislation and have the same hierarchical level as ordinary laws. As a developing country, Brazil benefited from a transition period to implement a number of commitments under various WTO Agreements. Since 1996, Brazil has been involved in 16 cases under the WTO dispute settlement mechanism, seven as a complainant and nine as a defendant; it has participated as a third party in four disputes.

Brazil took an active role in the multilateral Negotiations on Financial Services and in the Negotiations on Basic Telecommunications, making offers representing improvements on its Uruguay Round commitments in both sectors. In July 2000, Brazil informed the WTO Council on Trade in Services of its decision not to ratify the Fourth Protocol on Basic Telecommunications, and submitted a new schedule of commitments for consideration by WTO Members. In mid-2000, the Fifth Protocol on Financial Services was still being discussed in the Brazilian Congress.

Brazil gives great importance to deepening integration in South America; it is the region's largest economy and trader, and is playing a key role in that process. Accordingly, one of Brazil's major trade objectives is the completion of MERCOSUR, by including the sectors currently excluded from free trade (i.e. automobiles and sugar), the progressive elimination of the exceptions to the CET, the coordination of economic policies, and the deepening of integration in new areas. Another key element of Brazil's agenda is the pursuit of negotiations with the European Union; efforts involving the United States, Brazil's main single trading partner, take place mostly through the Free Trade Area of the Americas initiative.

  
  
Government report Back to top

TRADE POLICY REVIEW BODY: BRAZIL
Report by the Government — Part V

FUTURE TRADE POLICY DEVELOPMENTS

The Brazilian Government shares the view that the international economy is currently characterized by an extremely dynamic process of growing internationalization and integration of national economies, Globalization, as such process is usually named, will probably continue to mark the evolution of the international economy in the foreseeable future.

Because of the diversity of its foreign trade, both in terms of products and of partners, Brazil has traditionally been an active player in all efforts intended to strengthen the multilateral trading system.

It is from these objective conditions that stem the central elements of Brazilian trade policy, directed at minimizing the risks and maximizing the opportunities of the process of globalization for the national socioeconomic development effort, supported by the continuous enhancement of the disciplines that govern external trade.

This effort of adjustment of the Brazilian economy to the new international context is translated, on the domestic front, by the continuity and the deepening of the process of deregulation and privatization of the economy, alongside the pursuit of institutional and legal bases for sustained economic development. Reforms of the State machinery, of the tax system and of social security are under way with a view to ensuring sustained economic growth and the continued improvement in the living conditions of the Brazilian population.

On the external front, the fundamental objective of Brazilian trade policy lies in the expansion of opportunities for the participation of the Brazilian private sector in the flows of international trade. The policy of opening the Brazilian economy, implemented throughout the 90┤s, led to undeniable benefits in the areas of modernization, productivity and competitiveness. It has, however, generated a significant growth in imports. The sustainability of this process will require, in the long term, a corresponding access to foreign markets for Brazilian goods and services.

The successive GATT negotiation rounds, alongside national trade liberalization policies, have, over the last decades, produced, on the one hand, a significant reduction of tariff levels, which are, with few exceptions, the main obstacle to international trade. On the other hand, a number of sophisticated and not entirely transparent non-tariff measures and regulations have been established in the most developed countries, currently representing the major restriction to international market access. Developing countries still face discriminations in terms of market access for their agricultural products, such as the non-automatic recognition of disease free areas, additional certification prerequisites; unjustifiable border controls; traceability; and stringent requirements for foreign producers and others.

The process of broad market opening undertaken by Brazil since the beginning of the 90┤s has not resulted in commensurate access to foreign markets, as had been expected, in terms of trade barrier reduction in its main export markets. On the contrary, in many sectors, specially in those in which Brazil is highly competitive, developed countries have maintained or even increased protectionist measures.

This situation is reflected in Brazilian trade deficits registered over the last five years with its main importing markets. In the period 1995-1999, trade with the European Union, the United States and Japan were constantly negative, with accumulated deficits of, respectively, US$ 6,526 billion, US$ 12,215 billion, and US$ 1,655 billion.

With regard to trade with the United States, the main export products affected by restrictive measures are: textiles, sugar and tobacco (quotas); orange juice, footwear and ethyl alcohol (specific high tariffs); steel and orange juice (antidumping duties); fruits and vegetables, bovine meat and poultry (sanitary and phytosanitary restrictions).

Within the European Union, there are still differences in procedures among Members, with particular note of the broad environmental legislation and certification requirements with protectionist impacts. In the European market, Brazilian exports are subject to different types of barriers: sanitary and phytosanitary restrictions, quotas (sugar, bananas, fish products, Hilton Beef, textiles and poultry), antidumping and countervailing duties (silicon iron and monosodium glutamate), and technical barriers (such as warranted labeling requirements).

There remain, furthermore, serious and well-known distortions remain. They derive from the implementation of policies and practices, very often on a unilateral basis, by developed countries, which have an adverse impact on the balance of trade relations at the international level.

The attainment of greater integration in the world economy is undertaken on several fronts. Mercosur constitutes the first external frontier of the Brazilian economy, in which the current objective is to complete and improve the customs union, through the inclusion of new sectors, the progressive consolidation of the Common External Tariff and the deepening of integration in new areas, such as government procurement, services, technical standards and coordination of macro-economic policies.

Beyond Mercosur the establishment by the end of 2001 of a broader economic area within South America is being sought, through the conclusion of a free trade agreement between Mercosur and the Andean Community, bearing in mind that South America is one of Brazil’s main trading partners.

At the hemispheric level, the negotiations for the establishment of the Free Trade Area of the Americas (FTAA) are scheduled to be concluded in 2005. It is a project of major dimensions, with profound implications for the Brazilian economy.

Furthermore, Mercosur has started negotiations with the European Union, with the aim of improving trade relations between the two customs unions. or Brazil, such negotiations should not exclude, at the outset, any good or service, and should adopt the single undertaking format. The conclusion of these negotiations should coincide with those on the hemispheric context, in 2005.

The Brazilian trade policy projects of sub-regional, regional and inter-regional are not, nor could they be, seen as an alternative to the multilateral trading system. The WTO Agreements constitute the fundamental normative framework for the insertion of Brazil into the international economy. The Brazilian approach as to the central role of the multilateral trading system was reflected in the support to the launch, at the III Ministerial Conference of the WTO, of a new round of multilateral trade negotiations. Brazil believes that such a round would be an opportunity for a renewed effort to enhance the multilateral trading system, particularly through the possibility of correcting persistent distortions in the system, which became evident in the implementation of the Uruguay Round Agreements, particularly in the agricultural sector and in certain disciplines.