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Zero-for-Zero should be on agenda for Brazil leader’s U.S. visit

In a recent Reuters story, Alonso Soto noted that on an upcoming visit to Washington, Brazilian President Dilma Rousseff’s staff intends to launch complaints about alleged U.S. crop subsidies with Obama administration officials.

“Brazilian authorities expect to have more evidence of (market) distortions by early next year, to challenge the United States,” Soto reported.  “In the meantime, officials say Brasilia will seek to press the United States to be more transparent about its subsidies.”

Talk about the pot calling the kettle black.

In an extensive report released last fall, DTB Associates, LLP noted…

“Overall government support for Brazilian agriculture has mushroomed over the past decade. The government has raised support prices for a range of commodities and increased funding for other programs as well.”

The report notes that Brazil’s violations of crop subsidy limits established by the World Trade Organization (WTO) “have gone unrecognized due in part to the complexity and in some cases overlapping nature of the programs.”

The report further notes that Brazil provides a multitude of “subsidized agricultural credits” through various programs that are “very complex and non-transparent.”  In addition, “Brazil operates a wide range of tax measures, some of which may have the effect of an export subsidy.”

Nevertheless, Soto reports that Brazil “plans to apply pressure on Washington by questioning its farm program at the World Trade Organization’s agricultural committee.”

“We need to act multilaterally at the WTO to reduce those alleged U.S. crop subsidies,” an unnamed Brazilian official told Reuters.

On this, we can agree.

Brazil is the world’s #1 producer and exporter of sugar, propped up by a series of long-established and extensive government subsidies.

A congressional resolution proposed by Rep. Ted Yoho of Florida would zero out all U.S. government support programs in return for Brazil simultaneously zeroing out all of its government support programs.  This multilateral zero-for-zero policy would be administered under the auspices of the WTO.

Let’s hope zero-for-zero is on the agenda for President Rousseff’s visit in June.