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MOTTA VEIGA, Pedro (da). Brazil and the G20 group of developing countries, in
GALLAGHER Peter, LOW Patrick, STOLER Andrew. Managing the challenge of WTO
participation. 45 case studies, Cambridge: Cambridge University Press, 2005

Disponible sur http://www.wto.org/english/res_e/booksp_e/casestudies_e/case7_e.htm
Dernire consultation le 16 juillet 2008


Brazil and the G-20 Group of Developing Countries
Pedro da Motta Veiga*
* CNI (Confederao Nacional da Indstria), Rio de Janeiro, Brazil.

Disclaimer:
Opinions expressed in the case studies and any errors or omissions therein are the
responsibility of their authors and not of the editors of this volume or of the institutions with
which they are affiliated. The authors of the case studies wish to disassociate the institutions
with which they are associated from opinions expressed in the case studies and from any
errors or omission therein.


I. Introduction
It is widely known that Brazil, as a major exporter of agricultural and agro-industrial goods,
has adopted an offensive stance in negotiations on the liberalization of trade in agriculture
taking place in the WTO, as well as in other negotiating processes. In line with this Brazil has
participated actively in the Cairns Group a coalition of developed and developing countries
exporting agricultural products both during and after the Uruguay Round. As the launching
of a new multilateral round of trade negotiations was being discussed, Brazil pushed for
including in the agenda ambitious goals related to market access and the reduction or
elimination of export and domestic support schemes. Moreover, in the Free Trade Area of the
Americas (FTAA) and EU-Mercosur negotiations, Brazil has presented proposals consistent
with those developed in the multilateral arena.
However, in the months preceding the WTO Ministerial Conference in Cancn in September
2003, an interesting process of strategy-shifting took place, involving Brazils stance in
negotiations on agriculture.
Without breaking with the Cairns Group and giving up its pro-trade liberalization stance in
agricultural negotiations, Brazil led the setting of an issue-based developing countries
coalition aimed at bargaining jointly during the Ministerial Conference and beyond. This new
coalition, the G20, brought together developing countries which traditionally adopted
differing even opposed positions in the agricultural negotiations in the WTO; the
simultaneous presence of Argentina and India in the group is the best example of this novelty.
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It is worth noting that the shift in Brazils negotiations strategy was driven not only by the
internal dynamics of the agricultural negotiations in the WTO, but also by a broader shift in
the countrys foreign economic policies especially in its trade negotiations strategy
towards a view where the North-South axis acquired a growing relevance. Brazils leadership
in the setting of the G20 is perhaps the best example, at the multilateral level, of the countrys
new southern stance in trade negotiations.


II. The local and external players: roles and interaction
One of the more interesting features of the decision-making process leading to the
establishment of the G20 was that it involved intensive interaction between public and private
domestic actors and between these actors and external players. Even more interestingly, the
domestic and external dynamics became more and more interconnected as the G20 was set up
and became a relevant player in agricultural negotiations at the WTO.
The domestic interplay involved continuous co-ordination between public agencies and
between public- and private-sector representatives, leading to the setting up of new structures
and institutions, including a non-governmental organization (NGO) focused on technical
research related to agricultural negotiations which is financed by the main private associations
of the Brazilian agribusiness.
On the domestic front, the adoption by Brazil of increasingly assertive and autonomous
positions in agricultural trade negotiations has been backed, in structural terms, by the
impressive modernization Brazilian agribusiness underwent during the 1990s.
By the late 1980s, agricultural exports concentrated on primary goods coffee, cocoa and
cotton, among others and were strongly regulated by state-owned sectoral bodies. As a
consequence of this and until the beginning of the 1990s, the private sector did not show a
great deal of interest in trade negotiations, and the participation of agribusiness
representatives in the Uruguay Round was very timid. During the negotiations to launch the
sub-regional integration process, the private sector adopted an essentially defensive stance,
focused on the alleged risks of competition in the domestic market arising from the
elimination of tariffs among Mercosur member countries.
From 1995 onwards, driven by large investments, a strong expansion of agribusiness
productivity took place in Brazil. This process speeded up at the end of the decade, and sector
representatives began to push the government to adopt more aggressive negotiating positions
in agriculture, in the FTAA and EU-Mercosur trade talks. In the WTO, the new position taken
by the private sector was crucial for the governments decision to ask for the setting up of
agricultural-products-related dispute settlement panels in their actions against the United
States and the European Union (EU).
In early 2003, summing up these evolutions in attitudes, the Brazilian Minister of Agriculture
called for the adoption of an autonomous position in the agricultural negotiations, a position
which also reflected as shown below some disappointment towards the recent
performance of the Cairns Group. At that time, the main sectoral Brazilian agribusiness
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associations created a research institute geared to providing technical support to the ongoing
agricultural negotiations at the WTO as well as at the preferential fora.
As the so-called Harbinson paper was made public in the WTO talks, during the first half of
2003 a working group, created as a joint initiative by the ministries of Agriculture and
Foreign Affairs, undertook a cautious and detailed analysis of the paper, criticizing it and
formulating technically sound proposals on each of the points it raised. Later on, the working
group expanded to integrate other ministries, governmental agencies and private
representatives related to the agriculture and agribusiness sectors.
A similar position was adopted once the joint EU-US document on agriculture was made
public, in the weeks preceding the Cancn Ministerial Conference: the day after the
document was issued, the working technical group began to work on this new proposal,
analyzing and assessing each paragraph, deconstructing it, according to a participant of the
group from the private sector.
On the external front, the political origin of this coalition can be traced back to the Brasilia
Declaration signed between Brazil, India and South Africa in June 2003. According to the
Brazilian Minister of Foreign Affairs, the G20 was not born in Cancn or in Geneva, during
the weeks preceding the WTO Ministerial Conference. It emerged from the political trust built
up between Brazil, India and South Africa some months earlier.
The creation of the new coalition also seems to be related to a growing feeling of
disappointment with the Cairns Group and its positions on agricultural negotiations before
Cancn.
In the view of a private-sector representative, the WTO informal mini-ministerial, held in
Egypt in July 2003, made it explicit that Australia was exerting the strongest leadership within
the Cairns Group; however, it did not wish to adopt a more aggressive stance in the
negotiations, favouring instead the EU-US bilateral understanding as a first step towards
untying the agricultural knot in the multilateral negotiations. According to this private sector
representative, the G20 began to emerge in Egypt, when it became clear that Australia and
the Cairns Group would not seek to counterbalance the EU and US common interests.
The timid reaction of the Cairns Group to the EU-US joint document on agriculture issued
some weeks before Cancn strengthened the incentives, on the Brazilian side, to look for
political alternatives to what was being perceived as a new Blair House Agreement, excluding
the interests of developing countries. As a Brazilian diplomat put it, Cairns was paralyzed
and Brazil seized the opportunity created by this leadership vacuum to gather support to its
paper in Geneva.
However, the document prepared by the public-private working group in Brasilia turned out
to be very aggressive as far as market access demands were concerned. In the view of high-
level officials, this stance could isolate Brazil in the negotiations, jeopardize efforts to build a
coalition around the Brazilian paper, and compromise the objective most valued by the
Brasilia authorities of attracting some of the most important developing countries to this
new coalition.
One of the consequences of this, according to a Brazilian diplomat, was that
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Brazil had to reduce its ambition in market access issues in order to gather the support
of India and China for its demands against developed countries domestic and export
subsidies. It had also to emphasize the idea of proportionality of concessions to be made
during the negotiations: developing countries were supposed to pay less than the
developed ones in the agricultural negotiations.(1)
The historical evolution of G20 also includes a period of intense activity in Geneva prior to
Cancn. As a Brazilian diplomat puts it,
the group met frequently at the level of heads of delegation in Geneva prior to Cancn.
The group also met (and continues to meet) at the technical level to discuss specific
proposals in the context of the WTO agriculture negotiations, and to prepare technical
papers in support of the groups adopted common platform. The frequent contacts and
meetings at the ministerial level in Cancn further consolidated the group and made it
possible for the G20 to resist the strong pressure to break its common position.
In the words of a leading negotiator,
Since its inception the G20 had established close relationships with other groups in the
WTO with a special interest in the agricultural negotiations. The G20 is not a closed
group. On the contrary, it is open to the participation of other interested countries that
share its objectives and positions. It is thus only natural for the group to have close
contacts with other groups. A majority of G20 countries are members of the Cairns
Group and there is a large degree of coincidence between the positions of both groups
which naturally support each other and try to co-operate for their common purpose: the
faithful implementation of the Doha mandate.
The frequent contacts with other groups and coalitions did not jeopardize the identity of the
newly born G20. Making reference to the relationship between the G20 and the Cairns Group,
a Brazilian diplomat stressed that
each has its own personality. The G20 tries to strike a balance between the interests of
trade liberalization and the development objectives of its members. Cairns is more
focused on trade liberalization. Their respective agendas and interests coincide as
regards the need to end trade-distorting policies in agriculture and for the opening of
developed countries markets. The difference lies in the definition of special and
differential treatment for developing countries, especially in the area of market access.
The G20 clearly accepts the need for a dual approach to market access that fully takes
into account the needs of rural development and the situation of countries with a large
rural population. The Cairns Group acknowledges in its platform the need for special
and differential treatment for developing countries, but defends as is only natural
due to its composition, where major exporters of agricultural products play a central
role and where developed and developing countries are present a policy more
committed to open markets in agriculture, in both developed and developing countries.
As the G20 is composed only of developing countries and as it tries to combine the broader
interests of economic and social development, especially in rural areas, with trade
liberalization, it has established strong ties to other developing country groups: the African
Group recognized the existence of common ground with the G20 in the Cairo Communiqu
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and some African countries have joined the group since Cancn. Others have indicated their
interest in the groups work and may join in the future, according to a high ranking diplomat.
These ties and contacts produced some non-negligible impacts on the dynamics of the
agricultural negotiations at the Cancn Ministerial Conference: At Cancn, the G20
maintained frequent dialogues with the Cairns Group and the African Group and the G20s
reaction to the Derbez text incorporates elements of the position of both groups. In the case of
the African Group the issue of cotton was taken up by the G20 as part of its platform.


III. Challenges and the outcome
The first challenge: the establishment and the composition of the G20
The G20 was created in response to the EU-US text on agriculture. Why the focus on
agriculture? The common position reached by the United States and the EU created the risk of
reducing the scale of ambition set in Doha with consequences, in the light of the central role
of agriculture in the Doha Development Agenda (DDA), for the whole of the Round. And
why an alliance of developing countries? The US-EU common paper revived the North-South
polarization in a crucial area of negotiation and generated concrete risks of marginalization
for the interests of the developing countries in this central issue. The understanding between
the two major trading partners had the potential to affect the ambitious targets set at Doha,
especially as far as developing countries interests and development issues were concerned:
developing countries from both sets of interests came together when they realized that the
EU and the United States had joined forces and come up with a text that was highly
unsatisfactory.(2)
Hence the first challenge faced by Brazils strategy was the setting up of an issue-based
coalition composed exclusively of developing countries. On the one hand, southern coalitions
bloc-type coalitions in trade negotiations were broad in scope but their effectiveness has
proved very limited. On the other side, the most successful experience in the setting up of a
North-South issue-based coalition the Cairns Group had, in the view of Brazilian
diplomacy, run out of steam. As stressed by two analysts, the coalitions of today, including
the G20, having learnt from the failings of their predecessors, utilize some elements of both
the bloc-type coalitions and issue-based alliances.
As emphasized by one of the leading official Brazilian negotiators, the establishment of the
group and its composition involved a political decision and sent a message to all participants
in the Round, especially the developed countries, that there was a new factor to be taken into
account in the negotiations. The creation of the group was a political statement.(3)
According to a representative of the Brazilian private sector, the setting up of G20 challenged
not only the agricultural policies of the developed countries, but the legitimacy of the model
adopted by those countries to negotiate in multilateral fora, presenting their agreed position as
a fait accompli to developing countries.
From the Brazilian point of view, the decision to form a coalition of developing countries
with heterogeneous interests in the agricultural negotiations represented a significant shift in
the countrys negotiation position on this issue; it was now driven by the offensive interests of
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a large exporter but also by the objective of breaking the North-South protectionist front in
agricultural negotiations through the setting up of a new southern agenda on agriculture,
albeit less ambitious than the Cairns Groups agenda.

The second challenge: building consensus and retaining cohesion in the G20
The second challenge faced by Brazil in the emerging coalition involved the ability to build a
consensus among developing countries with heterogeneous interests in the multilateral
negotiations on agriculture. Cohesion of the coalition has been a major concern of Brazilian
diplomacy, and consensus-building within the G20 required that much attention be directed to
the design of negotiating technically consistent proposals in order to avoid the G20 being
labelled as a coalition that merely sought to block progress and was uncommitted to a positive
outcome for the WTO Ministerial Conference. As a Brazilian diplomat recalled, At Cancn,
the group not only presented its views and influenced the elaboration of the proposed final
text of the conference, but, also, after the presentation of this text, it met for several hours and
prepared a number of concrete amendments to the text for the final round of negotiations
which unfortunately never took place.
The co-ordination between technical experts from the Brazilian government and the private
sector, and the experience accumulated in Braslia during the months preceding Cancn
played here a central role, allowing Brazil and then the G20 to develop a sound,
substantive position dealing with the complex issues involved in the agricultural negotiations.
The battle to maintain the cohesion of the G20 was described by one of the main Brazilian
negotiators at Cancn as follows:
Even before the Ministerial Conference, some developed countries tried to dismiss the
group, by refusing to take its proposals seriously and by accusing the group of trying to
introduce an ideological dimension in the negotiation, by importing into the WTO
positions and tactics that had their origin in the North-South dialogue. This reflected a
sort of annoyance with an attempt by a group of developing countries to try to interfere
with the agreement between the EU and the United States which should represent the
basis for the results on agriculture at Cancn. The attempts by many countries from the
G20 and other groups to change the bilateral deal to better reflect their interests were
met with a negative reply.
Once the G20 was set up, another battle began at Cancn, as some developed countries
attempted to divide the Group and to create difficulties in its relations with other groups
in the WTO, especially the Cairns Group and the African Group. In spite of strong
pressures put on members of the group, the G20 remained united during the whole of
the conference, with the withdrawal of only one delegation from the group. Another
delegation, Nigeria, joined the group in the final stages of the meeting. After Cancn a
small number of countries also left the group, but others became members, for example
Tanzania and Zimbabwe.



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The outcome: a high level of legitimacy and Brazil becomes a major player in agricultural negotiations
In spite of criticisms from developed countries and the fact that no agreement on agriculture
was reached at the end of the day in Cancn, the G20 was perceived by public opinion, in
both the North and the South, as a legitimate and constructive effort by developing countries
to advance their interests in the WTO negotiations and to defend the idea, officially agreed in
Doha, of a development round.
Since Cancn, the G20 has been widely recognized as a major new player in agricultural
negotiations, and one whose interests should be taken into account if some agreement on this
issue is to be reached in the WTO. In December 2003 the EUs chief negotiator, Pascal Lamy,
participated in the G20 ministerial meeting, held in Braslia, implicitly confirming this
understanding. Another G20 ministerial meeting was held in So Paulo in June 2004, and
during the first half of 2005 the group embarked on technical and political consultations with
a view to injecting momentum in ongoing agricultural negotiations.(4)
The G20 is clearly today an important partner in the agricultural negotiations in the WTO and
the five main partners remain in the group. The failure of the Cancn Ministerial Conference
and the consolidation of the G20 help to explain the Non-Group-5 (NG-5), created in March
2004, which put together three major developed players in the agricultural negotiations
(United States, EU and Australia the leader of the Cairns Group) with Brazil and India,
respectively the most liberal and the most protectionist member of the G20.
In the view of Brazilian diplomats and representatives from civil society organizations, once
the period of blame-shifting that followed Cancn was left behind, the initiative of setting
up the NG-5 reflected the recognition that the process of decision-making in agricultural
negotiations had to change to integrate the G20.
Beyond that, the setting up of the NG-5 is considered to be a very important initiative, as the
technical and political work of its members paved the way for concrete proposals which
proved essential to consensus-building in Geneva on the negotiations framework. As one
NGO representative put it, After the meeting of the NG-5 in So Paulo in June 2004,
consensus was reached among members as far as the export and domestic subsidies were
concerned, and the market access issues remained as the only area of dissent. A very
important step was made in this meeting, making the work carried out in Geneva in July 2004
easier.
According to Brazils Minister of Foreign Affairs, The G20 has produced a change in the
dynamics of agricultural negotiations, which migrated from the Blair House model to the NG-
5 model as far as decision-making is concerned. It is not by chance if the text on framework
presented for discussion in July 2004 represents a progression from the G20 point of view as
compared with the text presented at the beginning of the WTO Ministerial in Cancn.
The official view in Brazil on the 1 August package is quite positive, although it is widely
recognized that a lot of work remains to be done. The adopted framework is perceived as a
text which respects the Doha mandate and its level of ambition, and represents a substantial
improvement as compared with the text submitted in Cancn as far as agricultural
negotiations are concerned.


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IV. Learning from the experience
The assessment of the strategy of setting up the G20 is widely positive in Brazil, despite the
setback of the WTO Ministerial Conference where the coalition made its dbut. Brazil
continues to participate in the Cairns Group, and has made significant efforts to keep the G20
coalition alive and has involved itself with India in the NG-5, which put together the
major players in the multilateral negotiations on agriculture.
Many lessons can be learnt from the Brazilian experience of setting up the G20, but two will
be emphasized here. The first relates to the importance of the domestic dimension in the
formulation of the national position on a negotiation issue central to Brazil. The domestic
dimension is about political negotiations involving groups with different views and interests
as far as trade negotiations are concerned: in the case of Brazil, these negotiations played an
important role in shaping the option of building a coalition with other developing countries
and in balancing liberalization goals and development objectives.
The technical and institutional component of the domestic dimension in setting up the G20 are
worth highlighting. Technical preparation and permanent co-ordination among public
agencies and with the private sector helped to build domestic consensus supporting the
official position in the negotiations. These mechanisms have been kept active before, during
and after the Cancn Ministerial, and it seems correct to assert that they have become more
and more dense and complex. Capacity-building initiatives in the private and public sector
made their contribution in this way: the Ministry of Agriculture has created a specific
institutional structure to deal with trade negotiations in a systematic manner; agribusiness
sectoral associations have supported a research institution charged with presenting technical
proposals for agricultural negotiations, and they have participated in the Brazilian Business
Coalition a forum representing industrial, agribusiness and services sectors in trade
negotiations.
The second lesson refers to the convenience (or not) of replicating the coalition-setting
initiative in the area of non-agricultural market access. The assessment of one leading
negotiator is clear-cut on this point:
After Cancn, and in the light of the role the G20 played at the conference, there have
been some suggestions that the group could perhaps play a larger role encompassing
other areas of the WTO agenda or even the broader agenda of co-operation for
development. Perhaps this is only natural and reflects the need that is felt in many
quarters for a new coalition to revitalize the debate on development issues in
international fora. This is even more true in the light of growing fatigue with orthodox
adjustments, self-regulating market forces as an answer to development problems and
the negative aspects of globalization. Nevertheless, the G20 is perhaps not the answer
and to try to expand the mandate of the group would possibly jeopardize its unity. One
of the strengths of the G20 is its ability to combine a political stance with a focused
approach to agricultural negotiations.




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Bibliography
Brazilian Mission in Geneva (2003 and 2004), Carta de Genebra, various issues

Hugueney Filho, C. (2004), The G20: Passing Phenomenon or Here To Stay?, processed

Jank, M. S. and M. Q. Monteiro Jales (2004), On Product, Box and Blame-Shifting: Negotiating Frameworks
for Agriculture in the WTO Doha Round, ICONE, 14 May

Narkilar, A. and D. Tussie (2003). Bargaining Together in Cancn: Developing Countries and their Evolving
Coalitions, mimeo


OTES:
1.- It is worth noting that, within the Brazilian Government, divergent positions did exist as far as the agricultural
negotiations were concerned: the ministry in charge of the agrarian reform and issues relating to the small-scale
agriculture supported defensive positions in these negotiations, while the Ministry of Agriculture had a strongly
pro-liberal stance, supported by the modern agribusiness sectors. Hence, the G20 platform, less ambitious in the
market access issue and more attentive to developing countries concerns related to food security and small-scale
agriculture, helped to generate a broad domestic consensus around the official position.
2.- Narlikar and Tussie (2003).
3.- Idem.
4.- A G20 website was recently created and a link to this website can be found on the homepage of Brazils
Ministry of Foreign Affairs.