President Luiz Inácio Lula da Silva’s administration will demand a change in Joe Biden’s foreign policy and an end to the paralysis of the WTO (World Trade Organization). The company, which sets trade rules and is considered strategic for Brazil, is in a process of abandonment.
Emerging economies fear that without the WTO, the law of the most powerful countries will prevail, imposing standards, rules and behavior that could harm national exporters.
This Wednesday, Brazil’s new position will be presented by Chancellor Mauro Vieira at a ministerial meeting in Paris. Itamaraty says it is “unthinkable” that the WTO could simply die or be forgotten altogether.
The head of Brazil’s diplomacy will urge other governments, particularly Joe Biden’s government, to make a commitment to bail out the company.
Before the meeting, Mauro Vieira met with Don Farrell, Australia’s Minister for Trade and Tourism and coordinator of this Wednesday’s meeting. According to the reports of the talks, there was “complete coincidence” in the need to reactivate the WTO courts and revitalize the organization.
According to the Lula government, the current situation represents a decadelong setback in efforts to create international rules for dozens of sectors. Political erosion is still seen as damaging to the country, as it deprives emerging market exporters of any predictability to expand their activities.
The initiative is Brazil’s first concrete act on international trade and gives shape to what Lula advocates for rebuilding the multilateral system. During the G7 summit, the Brazilian President strongly voiced his criticism of rich countries and the process of emptying international organizations.
Vieira will therefore call on governments to free the WTO from its current paralysis and to clarify the need to introduce new rules.
At the heart of Brazilian diplomacy in recent decades, the WTO has played a key role in limiting distortions in rich countries, while its court has allowed Brazil to force Europeans and Americans to review their agricultural sector subsidies. In the healthcare sector, it was the Itamaraty action that forced the international community to establish rules to ensure generic drug production.
Embraer also fought a long legal battle at the WTO in order to be able to compete on an equal footing with the world’s largest aircraft manufacturers.
But since the administration of Donald Trump, the company has suffered severe setbacks. Hoping to contain China, the American began ignoring international trade rules, imposing sanctions and increasing tariffs. A trade war broke out and for many the multilateral system experienced an unprecedented earthquake since its inception.
Finally, the Trump administration dissolved the company’s Appellate Body, a sort of world supreme court for settling trade disputes between countries. By vetoing the appointment of judges, the White House has overridden the mechanism, leaving the international system without a court to punish or judge whether or not a government has broken trade rules.
But to the surprise of dozens of countries around the world, Joe Biden’s administration maintained the same behavior. The WTO remained paralyzed and its courts inoperative.
For the Brazilian government, which is now in its third year, Biden needs to clarify what he intends to do with the company, the trade rules and his ideas about eventual reform.
There are fears among foreign diplomats that with the start of a new election campaign in the USA in 2024, little can be done for a possible reform of the international system.