SAO PAULO, Brazil - A top U.S. trade official urged President-elect Luiz Inacio Lula da Silva Monday to help create a hemispheric free trade zone by 2005, but Silva's economic advisor called the current timetable "unworkable."
Deputy U.S. Trade Representative Peter Allgeier said America was counting on Brazil's support for the Free Trade Area of the Americas, which would include 34 nations from Canada to Argentina.
"The change in government in Brazil presents the an opportunity to forge a new relationship," Allgeier told some 400 businessmen at a seminar in the American Chamber of Commerce. He said there was no "fundamental change" in relations with the election of Silva, a former union boss who has been critical of the FTAA.
"We expect this relationship to deepen, particularly as we work together as co-chairs of the FTAA to ensure that these negotiations reach a successful conclusion by January 2005," Allgeier said.
Brazil has complained about U.S. trade barriers to its farm produce, and Silva has called Washington's FTAA proposal tantamount to "annexing" the Brazilian market. But Allegeier said all issues were open to negotiation.
"The negotiation leaves nothing off the table," he said. "Farm subsidies are a central part of the negotiations. Our position is very clear as to what the objectives should be. We want to eliminate tariffs and other non-tariff barriers on agricultural trade."
Still, Silva's top economic advisor said it was unrealistic to expect countries to prepare proposals for market access by Feb. 15.
"We need a new timetable," Guido Mantega said during a break in the seminar.
"The United States is not reducing its protectionism, especially regarding agriculture products," he said. "That makes the deadline unworkable."
Silva, who won a landslide victory in October and takes office Jan. 1, favors a go-slow approach to the free trade zone. He has said Brazil won't simply throw open its borders — and its market of 175 million people — without concessions by the United States.
"Brazil can't give without getting something back," Mantega said. "The timetable must be reviewed."
Mantega also reaffirmed Silva's pledge to honor all international agreements and to maintain fiscal austerity. He said a budget surplus and low inflation were priorities "to recover the credibility Brazil has lost on the international market and resume receiving credits."
Investments and credit dried up this year as Silva rose in the polls. Markets feared that the former union boss could lead Brazil to an Argentina-style default on its foreign debt.
Mantega said he was "moderately optimistic" about Brazil's economy and predicted growth of between 2.5-3.3 percent next year, with a trade surplus of US$15 billion. He also forecast inflation of 11-12 percent in 2003, with interest rates remaining high at around 17.5 percent.
The figures were close to the consensus among 400 businessmen in a survey by the Chamber released Monday.
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