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Last Updated: Thursday, 29 May, 2003, 12:20 GMT 13:20 UK
US trade talks stumble on farm aid

By Tom Gibb
BBC correspondent in Sao Paulo

US Trade Representative Robert Zoellick (left) meets Brazil's agriculture minister Roberto Rodrigues
There was tension behind the handshakes

US Trade Representative Robert Zoellick has ended a two-day visit to Brazil in which he heaped praise on the economic policies of the new left-wing government.

But Mr Zoellick failed to win progress on the issue of free trade, the purpose of his visit.

He hoped to push forward the agenda for creating a Free Trade Area of the Americas (FTAA) by 2005.

Brazil's new left-wing leader, President Luiz Inacio Lula da Silva, has inherited an agreement between 34 North and South American nations to form a free trade area by 2005.

But while the project is a priority in Washington, there is far less enthusiasm in Brasilia.

Protecting farmers

During his visit, US trade representative Robert Zoellick insisted that everything would be on the negotiating table.

But the present US proposals do not envisage ending subsidies to US farmers.

As South America's main exports are agricultural, there's a general perception that Washington is offering a bad deal.

Brazil's president is busy trying to form a joint negotiating position with other South American nations to confront the US proposals.

A growing list of countries, including Argentina, Venezuela and Ecuador, appear to be in agreement on the need to stick together.

Deadline slips

After meetings with Mr Zoellick, Brazilian ministers said Brazil did not regard the 2005 deadline as binding.

For his part, Mr Zoellick said the US was willing to discuss agricultural subsidies, but only in the World Trade Organisation (WTO).

Many analysts believe there is no way Washington will reduce subsidies unless the European Union (EU) does the same, a prospect that remains a long way off.

The issue is likely to be the main item on the agenda when the Brazilian president goes to Washington next month to meet President Bush.

Mr Zoellick ended his visit by describing Brazil as a vital partner in the region, saying that despite the difficulties, he was convinced further conversations would bring advances.

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