Below is a statement by Brazil’s Ambassador Roberto Azevêdo  at a meeting of the WTO’s Trade  Negotiations Committee (TNC) on 29 March 2011.

In this statement, I’d like to touch on two main topics, subdivided in two issues each.

I : STATE OF PLAY

a) Recent Developments

I will start by underlining a disappointing but quite inescapable reality: we are before a very serious situation. Reports of the most recent bilaterals clearly indicate that the gaps among key negotiating partners are indeed very large, and some of the parties involved in those bilaterals believe them to be unbridgeable.

The first assessment of this situation happened recently in the G-11. We must emphasise, however, that these gaps are not a result of the G-11 process or, actually, of any process. We have to accept the fact that processes may assist but are themselves incapable of closing large substantive gaps. The G-11 was simply meant to facilitate a debate on inter-sectoral trade-offs of our give and take process.

In its sessions last week, the G-11 received reports that recent bilaterals provided more clarity to the negotiating gaps between key delegations. The G-11 was also informed that some of those engaged in the bilaterals were sceptical about the possibility of closing those gaps. After intense discussions, no concrete ideas or suggestions were offered in that group that its members felt had any chance of promoting convergence. The G-11 felt, however, that the WTO Membership as a whole had to be informed of this critical situation immediately.

b) Transparency

After the G-11 meetings of last week, I heard a number of delegations ask for more transparency regarding the gaps identified in the bilaterals. Only the delegations actually involved in those bilaterals know precisely what those gaps are. I pointed out, in this same setting two weeks ago, the nature of the demands that were put to Brazil and the reasons why we could not meet them. Let me recall them once again:

i) Although some very remarkable demands were also submitted to us in services, the more explicit and clear requests were made in NAMA sectorals. Brazil was essentially requested to bring duties down to zero for most – or all – of the NAMA lines of certain sensitive sectors such as chemicals, industrial machinery, electronics, hospital equipment, and forestry products. Such requests covered over 3,200 lines, just about a third of our NAMA universe. This contribution would result in average cuts equivalent to a coefficient 8. This represents an altogether different level of ambition for Brazil that had accepted a coefficient 20.

These sectors, together with those where Brazil will take a 33% cut on applied rates (and these include automobiles, textiles and clothing, footwear, toys, and others), account for over 3.3 million direct jobs in Brazil. These numbers clearly indicate the high degree of political sensitivity and social implications for Brazil.

Wrongly assuming that those requests would entail reciprocity, as one would expect in any reasonable negotiation, we initially explored alternatives that, inter alia, explored the scope of the requests, could achieve differentiated formula plus cuts, recognised autonomous liberalisation, etc. All were rejected outright.

ii) After the first initial interactions and later, already in the G-11 process, Brazil also realised that its efforts would not be reciprocated by any of the parties, either requesting or benefiting from such requests. Consequently, Brazil’s contribution would be essentially unilateral and non-reciprocal. In the G-11 discussions, key developed countries also unambiguously stated that they could not bring any additional contributions to the table in agricultural market access. For them, the market access negotiations in agriculture were either concluded or needed to have the level of ambition reduced to meet their particular sensitivities.

Let me be clear that I am not attempting to attribute responsibilities, divert blame, or anything of the type. If this were so, I would be offering arguments that show how reasonable – or unreasonable – certain positions are. Today, I will simply assume that the position of those delegations are responding to critical constraints, parameters of national interest, or very simply reflect what they need to get approval in their parliaments. I am merely stating facts. I am not interpreting positions. I am reciting positions as they were put to us.

This information, I believe, should give a better perspective on the demands put to us. As far as Brazil is concerned, we are ready to work with adjustments to the July 2008 package, as long as (a) the level of ambition does not change dramatically in areas that are sensitive to us, and (b) there is full and proportional reciprocity in areas of Brazil’s interest, agricultural market access in particular.

Clearly this gap is immense and we have not had any indications that the parties that urge Brazil to contribute further will recalibrate their offensive or defensive positions.

II – PROCESS FORWARD

a) Consultations of DG in early April

Brazil supports your decision to hold consultations in early April. Brazil will engage fully whenever invited to participate.

I must, nonetheless, express fundamental reservations regarding any process that tries to address roadblocks in a non-horizontal way. Some delegations before me suggested that we focus first on the NAMA impasse. It would be a grave mistake to seek flexibilities from parties in one pillar of the negotiations alone, without setting up a format of conversations that allows for the identification of potential trade-offs in the other negotiating pillars.

In this situation and under this particular juncture of negotiations, sequence matters a great deal. Let’s take NAMA for example. For Brazil (and each of us will have a different perspective depending on his particular interests) we cannot focus on the NAMA impasse without exploring whether there would be possibilities for trade-offs in agricultural market access. This would, in our view, irreversibly undermine a basic principle enshrined in every decision this TNC has taken so far: the principle that the only way forward has to based on a process of give and take.

Key developed countries already made clear that, for them, agricultural negotiations are over, certainly as far as market access is concerned. Any outstanding issues are to accommodate further sensitivities of theirs, not to increase ambition. Under these circumstances and despite any assurances to the contrary, addressing NAMA first and by itself would:

First – essentially indicate that, for some there would be giving, but no taking, and for others there would be taking, and no giving.

Second – such non-horizontal approach would discourage engagement. After all, those doing the giving would not believe in a process that requires them to show flexibility – which would be immediately pocketed – without any hope for reciprocity in other pillars.

b) Texts by Easter

It is Brazil’s view that, given all that has been said before, this is not a time to abandon the bottom-up approach. Some may be tempted to request Chairs or even you, Mr. Director-General, to use those texts to test landing zones and try to facilitate convergence. This may well be a big faux pas with irreversible consequences. At this juncture, gaps are so wide that any attempt to “split differences” will very likely be vehemently rejected by Members on both sides of the divide. This could be an additional blow to negotiations at a moment when we can still afford it.

I could not overemphasise how critical our situation is. We must all recognise that our actions and decisions may have a very direct impact on the perspectives to conclude this Round. Failure will come at a great cost for all of us, especially the smallest and the poorest among us.  We all must shoulder our responsibilities and be held accountable to our actions. At this juncture, inaction or omission is not an option.