March 5, 2007 / 3:49 PM / 12 years ago

Brazil's Lula urges Bush to cut farm subsidies

BRASILIA (Reuters) - Brazil’s President Luiz Inacio Lula da Silva urged the United States on Monday to cut import duties on ethanol and slash subsidies on other farm goods to help clinch a deal in the Doha global trade talks.

Brazilian President Luiz Inacio Lula da Silva speaks during a news conference in the Uruguayan Presidential ranch of "Anchorena" in Colonia, February 26, 2007. Lula urged the United States on Monday to cut import duties on ethanol and slash subsidies on other farm goods to help clinch a deal in the Doha global trade talks. REUTERS/Pablo La Rosa

“The high U.S. duties on Brazil’s ethanol make no sense. If we are going to have free trade, it should give us the opportunity to buy and sell (freely),” Lula said in his weekly radio address.

President Bush and Lula are expected to discuss Brazilian-U.S. cooperation in forging a global market in ethanol, a biofuel increasingly used to power vehicles, when they meet in Sao Paulo on Friday.

Thomas Shannon, the senior U.S. diplomat for Latin America, said on Friday that tariff cuts were a congressional issue and could not be dealt with now. Still, Lula said he would talk to Bush about U.S. ethanol tariffs, currently at $0.54 a gallon.

The Bush administration said on Monday there were no plans to cut import duties on ethanol.

“The tariff is not under negotiation and we have no intention to propose altering the tariff,” White House national security adviser Stephen Hadley told reporters.

The United States and Brazil are the world’s two largest ethanol producers and they hope to create common standards to guide international ethanol trade.

Brazil’s sugar cane-derived ethanol is markedly cheaper than the U.S. product made from corn.

Lula said the United States could tip the balance in favor of an agreement in the Doha global trade talks by cutting farm aid broadly.

“I think we are close to an agreement in the Doha round. If the United States favored an accord, it would help it happen,” Lula said on his Breakfast with the President radio address.

“So, we are asking the United States to stop the subsidies it gives today,” Lula said.

Lula called on Europe to open to products from the developing world. He also said the G20 group of developing nations needed to be flexible on industrial products and services.

As leader of the G20, Brazil has had a key role in fighting for freer farm trade within the current negotiating round of the World Trade Organization.

Foreign Minister Celso Amorim said last week he still hoped for a WTO accord in coming weeks. Amorim is in Geneva until Tuesday to meet Indian Commerce and Industry Minister Kamal Nath and other trade representatives.

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