focus and Coordination a must...

Those who follow what top government and private sector officials are saying about the priorities and true results of Brazil’s trade policy, and the diversity of opinions in the media on this subject, should certainly be confused by now.

The problem begins with an all too common mixup involving three distinct areas: foreign policy, trade policy, and trade itself.Quite frequently, positive trade numbers are portrayed as a direct consequence of foreign or trade policies. But that’s not quite the way things are.

International trade is an activity that depends essentially on how private companies do business – cost reductions, product and market diversification, and so on.

The public sector is left with the task of managing macroeconomic essentials such as exchange and interest rates, and maintaining and supporting the infrastructure required by exporters.

For its part, foreign policy is primarily a government task, involving the broadening of diplomatic relations worldwide to facilitate the flow of goods, services and individuals. It also encompasses tasks like defending universal values such as sovereignty, peace, democracy, and environmental protection among others.

Trade policy is simply that branch of foreign policy dealing with problems that arise from certain discriminatory practices implemented or imposed by countries: tariffs, quotas, non-tariff barriers, subsidies, dumping, regulatory obstacles, investments, intellectual property rights and so on.

Unlike foreign policy or trade, which should remain constant and universal, trade policy is a long-term endeavour that demands focus and intense coordination.

Focus is a must because of the ever expanding variety of alternative negotiating formats: bilateral, regional, multilateral and so on.

Where Brazil’s trade policy is concerned, I feel that multilateral solutions should be a priority – those in which bargaining and possible results are broader and more relevant, while able to minimize difficulties created by the discriminatory practices already mentioned.

Regional agreements involving a large number of countries, such as the proposed Free Trade Area of the Americas and the European Union-Mercosur accord, are a second option. In both cases, negotiations unfortunately have yet to produce a balance between concessions offered and received.

Finally there is the worst option of all: bilateral agreements, which as most recent cases show, generate little additional trade and feature highly discriminatory practices.

(From InfoBrazil, Dezembro 09, 2004)

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