1) From the time preceding its independence, Brazil had suffered the adverse consequences of poorly conducted trade negotiations, which had an adverse effect on both the economic and social development conditions. In fact, the Navigation and Commerce Treaty of 1810, signed between Portugal and England was an extortionate price to pay for protection of the Portuguese Court by the English fleet, and represented an unbridgeable obstacle to industrial development both in Brazil and in Portugal. Following negotiations working towards Portugal´s recognition of Brazil´s independence, at which England acted as intermediary, Brazil signed with England the infamous Treaty of Friendship, Navigation and Commerce of 1827. This was the price demanded by England for its unnecessary good faith offerings, since the war for the Independence of Brazil had already been decided by force of arms.

2) According to the Treaty of Friendship, Navigation and Commerce, effective for 15 years, Brazilian customs duties were to be imposed at 15%, a low rate even today, providing no protection to new-born industry. Moreover, the treaty stated that no other country could enjoy lower rates. [1] Meanwhile, in the English market, no consideration was given to Brazilian products, such as coffee and sugar, a position England reserved for its colonies. In the Brazilian territory, the English could enjoy innumerable privileges such as their own courts of law [2], with military contingents to execute their decisions, even against the Brazilian State. Further, Brazil had yet to assume the foreign debt owed by Portugal to England, which rendered difficult the administration of the new state´s public accounts. This agreement represented the first formal failure in Brazilian trade diplomacy. [3] Its impact was such, as to give rise to a period of serious political instability in Brazil, resulting in the downfall of D. Pedro I in 1831.

3) The English, in reality, conditioned Brazil to their economic imperialistic concepts formulated at the Vienna Convention of 1815, where free trade was determined the right of its subjects at the expense of other peoples and nations. Such a concept has surprisingly survived to this day and is adopted unqualifiedly by other countries with imperialistic regimes who also claim to be advocates of “free trade” in clear acknowledgement of the propagandist creativity of the English. [4] In keeping with such thinking, the English diplomats [5] at that time consulted private enterprise and systematically analysed national commercial interests, something which, in an incipient manner, Brazil started only recently.

4) In order to avoid monopoly by the English, Brazil was taken to extend those conditions offered to England to its other commercial partners by way of a series of treaties, including with France, Austria and the United States of America (US). Such treaties should have expired in 1842, however due to insupportable English pressure they were postponed until 1844 when Brazilian economic independence was truly born in a phase of great national prosperity. Nevertheless, there was no lack to extreme pressure from several of our commercial partners to reform the infamous treaties. It is to the merit of the Second Empire to have resisted such pressure.

5) Despite such remarkable resistance and its positive results, the first international act of the Republic was to consent to the re-stated claims of the US and on 31st January 1841, a customs agreement was signed. [6] In accordance with that treaty, all American claims were accepted, while Brazil´s interests were not met, either in the industrial area, the development of which was hindered, or in the agricultural area, where many products, important to the Brazilian economy, such as sugar, had access to the US denied. Despite the treaties advantages to them, the US terminated the agreement in 1914. Once again, Brazil had conducted negotiations with no sense of business reality and at a regrettable level of incompetence. [7]

5.1) With perspicacy, Eduardo Prado almost one hundred years ago analysed the scene behind the US motivation to enter into commercial treaties. To quote him generally: “Commercial Treaties! Here is the big American ambition…from its monopolistic world view, not content with the domestic market in which they hold a monopoly against the foreign nations through prohibitive customs tariffs…it was for the same purpose of selling its products and creating special advantages in foreign markets that the US hoped to impose commercially reciprocal treaties upon all countries of the Americas”. [8]

6) Following this, Brazil embarked on a period of automatic alignment, following US unilateral interests, set out in several policies, such as the Monroe Doctrine, that of the “big stick” and the Pan-American, promoting continental absorption. This policy was criticised by Lima Barreto who denounced it as being indecently submissive to the US and essentially ineffective. [9] With the liquidity crisis and subsequent bankruptcy of Brazil in 1930, the country´s commercial negotiations and international financial conditions were even further compromised. As a consequence, the government of President Franklin D. Roosevelt proposed a Reciprocity Agreement with Brazil which assured low tariffs on American industrialised products, established an exchange policy for the country and promised to preserve free customs clearance for coffee and rubber into the United States. Oswaldo Aranha, President Varga´s ambassador in Washington, said in support of the treaty which was later formulated and subsequently signed, that Brazil had little to ask of, but a lot to offer the US. [10] The beginning of the Second World War only aggravated the submission of Brazil to US commercial interests.

7) At the end of the Second World War, within the new political order proposed for the world, negotiations began, resulting in the General agreement on Tariffs and Trade, signed in 1947 by 23 countries, including Brazil. [11] The main principles of the GATT were the most favoured nation clause, [12] the national treatment clause and the transparency and fixation of tariff clauses. Brazil was represented on this occasion by a delegation whose main objective was inclusion in the multilateral trade system of the most ancient economic sector, that of major importance to humanity and for developing countries in particular: agriculture. However, in the words of Roberto Campos, a junior secretary within the delegation, “we lost the battle”. [13]

8) The GATT system, with a general secretariat established in Geneva, Switzerland, implemented a new commercial negotiation procedure based on a series of “rounds”. Through these, greater commercial liberalisation was intended, upon concessions from one country to another, and extended to all other commercial partners by force of the all-encompassing most favoured nation clause. [14] The most recent GATT round to date, was the Uruguay Round, initiated in 1986 and ending in 1994, resulting in the foundation of the World Trade Organisation (WTO) which succeeded GATT.


9) From its inception in January 1948, all initiatives for GATT rounds came from the US, the country that retained the indisputable leadership of the capitalist world. Following the relative decline of the US economy and with the growth in participation of the European Economic Community (EEC), the present European Union (EU), and Japan in world commerce, the US has reacted with an arsenal of unilateral measures incompatible with the judicial order of GATT, among which lie the Trade Acts and the pressures on its trade partners to adopt the infamous voluntary restraint agreements. The GATT system did not provide a structure to combat such abuses due to the lack of automatic application and dependency on consensus in all phases of process.

9.1) Thus, for the first time in GATT´s history, a new round was requested by a country other than the US: Japan. Having consulted strategists in the private sector, the EU, followed by the US, adhered to the idea of a new Round, and hinted of enormous opportunities, resulting from increased commercial advantage. Launched in Uruguay in 1986, the negotiations have since become complex as the North-Americans and Europeans intended to include in the GATT system the so-called “new areas”, notably services, investments and intellectual property. In fact, both the EU and US economies had become services oriented, and services generated the major commercial surplus for the US.

9.2) Also, for the first time in GATT´s history there was a reaction to the agenda by developing countries, mainly by the “Group of Eleven”, led by India and Brazil, that had been liberated from automatic alignment with the US. [15] The “Group of Eleven” opposed the inclusion of new areas without the admission in the multilateral system of the traditional areas of commerce, agriculture and textiles, all of great importance to the economies of developing countries. There was then an acrimonious dispute which paralysed any continuation of the Round, once the consensual system of GATT required unanimity. During this dispute, the US availed themselves of all legal and illegal means to move Brazil out of its position, including a campaign to destabilise the country. [16]

10) The impasse was overcome by the progressive inclusion of traditional areas and immediate integration of new areas. As a result, the treaties of the Uruguay Round were signed on 15 April 1994, and included the agreement that created the WTO in early 1995. Among the treaties signed were agreements respecting investment measures related to commerce; intellectual property; textiles; safeguards, subsides and compensatory measures; services; agriculture; and conflicts resolution. [17] The final result was positive, from an abstract and long term perspective, in that the legality of the multilateral system had been improved, however according to the GATT secretariat, in concrete terms, the developing countries were once more the losers of the Round, in that according to a survey, 64% of what resulted from the Round benefited developed countries. [18]

10.1) For Brazil, the result was even worse due to the fact that in the final phases of the Round, the country had been immersed in a serious internal institutional crisis, [19]
preventing the formulation of any strategic economic policies for registration in the GATT before the signature of the WTO treaties. Thus, Brazil was prevented from negotiating in the opening of the internal markets and obtaining the concessions of its commercial partners in counterpart. With no strategic planning, Brazil liberalised its markets unilaterally, and with nothing going in return to its partners, had in effect a multilateral commercial system. The US, the major beneficiary of the unilateral opening of the Brazilian markets, effectively maintained its illegal restrictions for many years, as in the case of footwear, orange juice, steel, sugar, and financial sectors.

11) During the phase of impasse at the Uruguay Round, 25 free trade agreements, permitted by GATT article 24 were signed between 1986 and 1994 [20], due to a certain lack of confidence in the GATT multilateral system. Again, the US took advantage, seeking absolute regional commercial leadership by way of the NAFTA [21] initiatives signed in 1992, and of the FTAA [22], during this phase of negotiation. Brazil, for its part, along with its regional partners Argentina, Paraguay and Uruguay, signed the Assumption treaty one year before in 1991, by an ambitious initiative of the regional common market, MERCOSUR. The objectives of MERCOSUR are the free flow of capital; goods; services and people; the creation of a common external tariff and the establishment of a common external policy for commerce; and the co-ordination of macro-economic policies. With the exception of a common external tariff (with many exemptions, including sugar which has awaited a successful outcome from Brazilian commercial diplomacy for almost two hundred years), the remaining objectives are yet to be achieved.

12) From the developing countrie´s perspective, until now, the WTO experience has not been positive, given that in commercial terms, the concentration of wealth and global commerce in the developed countries has increased. Similarly, the modest concessions made to the agricultural and textile sectors were not enough to give a competitive advantage to the developing countries because they were of a level which permitted developed countries to maintain the control over the respective markets. The inclusion of new areas has granted the developed countries access to the service market of the developing countries, but has not permitted the developing countries access to the service market of their developed partners, protected as they are by the barriers of common immigration policies. [23] Nor did the investment agreement handle the delicate issue of the improper complicity of the developed countries to fiscal fraud in the developing countries. [24]

12.1) The intellectual property agreement subjected the developing countrie´s national authorities to the developed countrie´s in an unjustifiable waiver of their sovereignty by means of the “pipeline” principle. The rules of origin agreement permitted institutionalised protectionism in the areas of free trade and its use to diverge the traditional flow of commerce. The subsides agreement favoured developed countries, and the anti-dumping agreement was also largely ineffective. It did not repress the arbitrary use of that institution in domestic legislation, principally in the US, but also in other developed countries [25], and the practice of financial and technological dumping, common in companies within the developed countries remaining unrestrained.

12.2) Even the WTO dispute resolution system in which so much hope was entrusted, did not fulfil expectations in the years of its operation. Problems resulted from the lack of proper procedural rules, compromising the legality and efficacy of the system. The system lacked even the most basic legal terminology and procedures, such as the counterclaim. The effectiveness of the Secretariat was questioned, as was that of the judicial division, in panel activities. Also criticised was the WTO director-general election system for its ambiguity. [26] With the situation worsening, and the possibility of a new round throwing the international community into a cold and uncertain water, including the inevitable risk of loss of credibility to the system, it seemed an unlikely option to pursue. Why then was the decision made to hold a new round at this point??


13) During the ministerial conference of the WTO, due to take place in Seattle, Washington State, US, from 29th November to 3 December 1999, it is expected that a new round of negotiations in the multilateral commerce system will be launched. For the second time, the US had not taken the initiative, this time it being the EU, [27] following Japan who was first during the Uruguay Round. The US, after histrionic disagreement for some weeks, emerged with a tentative agenda for the proposed new round which it would like to call the “Clinton Round” (sic). The objective of the EU regarding the Millennium Round is to keep the organisation competitive through new mechanisms to be created to compensate the effects of the decreased use of the agricultural subsidy, along with the low cost of the industrial and agricultural services of the developing countries. The US shares in these objectives. Japan intends to maintain its commercial importance.

14) Of the developing countries, India, which is traditionally the most alert to manoeuvres of a neo-colonial nature, was initially against the launch of a new round because it believed the implementation of the Uruguay Round accords to be more important. [28] Thereafter, India, together with Colombia, agreed to negotiate regarding the agriculture and service sectors. [29] Brazil conditioned its approval of the new round on development in the agricultural sector, conforming to the pronouncement of President Fernando Henrique Cardoso as with Minister Celso Lafer´s statement to the effect that the country would not make any further tax concessions. [30] MERCOSUL is seeking to achieve co-ordination of its efforts in the agricultural area. South Africa has instructed developing countries on the development of a greater union in defence of the common interest. [31] Certainly some sectors treated by certain treaties of the Uruguay Round shall be subject to review by the Year 2000, such as the agricultural, textile and service sectors, and must therefore by included in the agenda of the new round.

15) The US has presented to its commercial partners in the WTO a rather insignificant agenda for the Ministerial Conference, which included agriculture; sanitary measures; technical barriers to commerce services; intellectual property; customs valuation, rules of origin; pre-shipment inspections; investments; subsidies and textiles and all matters addressed by the Uruguay Round treaties. [32] However, the real agenda of the US to the new round is only discussed within that country internally and includes the question of labour issues, or social dumping; the environment; electronic commerce; multilateral investment agreement; government purveyance; and, in the agricultural area, the issue of the licensing of genetically modified products. [33] All of these issues represent enormous risks for the developing countries because they will not be treated objectively, equally or altruistically, but as instruments for the exclusive leverage of the commercial advance and promotion of US hegemony.

15.1) Thus, the effect of the social dumping argument is not to promote the welfare of the worker in the developing countries; on the contrary, it leads to the loss of competitiveness in these countries due to unemployment. [34] The multilateral agreement on investments aims to assure the free financial flow and guarantee of currency convertibility of the product of tax frauds and the actions of organised crime to North-American banks, managers, counsellors and, principally, beneficiaries of more than half of this spurious capital. [35] The environmental question does not aim at the protection or recuperation of the environment but to prevent the developing countries from producing in agricultural areas that have been kept unproductive as a result of scandalous market losses, caused by US and EU subsidies. The question of electronic commerce aims to prevent the consumer country from charging taxes on such kind of commerce, as the US considers itself more as vendor than consumer by way of such commercialisation. The objective of inclusion of the governmental expenses issue is to enlarge commercial hegemony, however the objective of recognising the lawfulness of genetic transformation technology and food production is questionable as the environmental and medical effects of such techniques are as yet unknown.

16) In its turn, the EU has shown that it learns quickly, more so than the US, presenting a vague and generic agenda defending different issues such as “to continue efforts to increase the liberalisation of goods and services commerce and to avoid protectionist measures” and, occasionally, has made use of surprising cynicism such as to effect “measures that may benefit the developing countries”. [36] Its real agenda is certainly the maintenance of its common agricultural policy (CAP), through which there are US$300 billion in annual subsidies and an orgy is promoted for the European agricultural producers, whilst a great part of the world´s population is sentenced to poverty. With the exception of agriculture, the US and EU tend to adhere to the same agenda against the developing countries, as in the case of investments; services; labour; the environment; governmental purveyance; electronic commerce etc.. Divergence will take place only in relation to specific details, that is, in defining who keeps what of the spoils.

17) Japan has not as yet presented its specific agenda, similarly to the EU, but it is expected that it will support all the measures implicating the increased legality of the multilateral system so as to be a potentially important ally of the developing countries. Canada frequently, but not always, defends the same points of view as the US. Regarding agriculture, it can be expected that the Canadians will be in favour of its liberalisation. Canada will support a multilateral regime for competition rights, concentrating risks and opportunities for developing countries. Risks with respect to the wishes of certain trade partners to usurp the matters of competition law and anti-trust from the local authorities, and opportunities, in regulating important matters such as financial and technological dumping.

18) If Brazil and MERCOSUL have an agenda, it has not yet been made public or submitted for national debate. President Cardoso has already mentioned the agricultural question to be of great importance. [37] In fact, according to the most recent data published by financial agents of the rural sector, 40% of the Gross National Product is represented by agriculture; that corresponds to 35% of Brazilian exports and a commercial surplus of US$ 11 billion. According to sector analysts, Brazil, in the short period of a year would have the capacity to double its agricultural performance if market conditions permitted major access. Brazil and Argentina belong to the Cairns Group [38]
that co-ordinates its efforts around liberalisation of the sector, co-operation that can be effective in the next round. However, agriculture is not the only important sector for a country with the economic and geographic diversity of Brazil. There are other relevant themes to improving internal social conditions and for the progress of the nation. These themes shall be defined with professionalism, within a broader strategic plan for Brazil, after consultation with the civil society at large, and shall be negotiated with firmness, perseverance and transparency. No hesitation or quibbling can take place with so much at stake for the future of the country. We need positive and concrete results from our commercial diplomacy.