31.03.2015

CLIPPING INTERNACIONAL NEGINT Brasília, 31 de março de 2015

Índice

I. OMC ______2 SA pulled out of WTO treaty over bill, security industry says ______2

Corrosion of WTO’S mandate Live Mint (Índia) ______3

WTO Sets up Disputes Panel over Russian EU Trade Tariffs ______6

II. NEGOCIAÇÕES REGIONAIS E BILATERAIS 7 EGA Product List Nearly Ready; Parties Set Format For Scope Negotiations __ 7

III. OUTROS ______11 's Pots And Pans Clamor For Progress ______11

Brazil Has No Room for Errors, Finance Minister Says ______12

Brazil's Rousseff, Levy rush to ease fears about austerity plan ______13

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I. OMC

SA pulled out of WTO treaty over bill, security industry says

BD Live (África do Sul)

THE realisation that the contentious Private Security Industry Regulation Amendment Bill

would not pass scrutiny by the World Trade Organisation (WTO) is what prompted the

government to pull out of the body’s General Agreement on Trade in Services (Gats).

This is the claim of international trade analysts and leaders in the private security

industry who spoke at a media briefing on Monday. Section 20 of the draft law stipulates

that all private security companies relinquish 51% of their South African units to local

ownership.

This comes after Police Minister Nathi Nhleko said last week that SA would withdraw from

its commitments under Gats to consult WTO member states over the private security bill.

Mr Nhleko also explained that a committee would be assembled to adjudicate

applications for partial exemption made by foreign-owned private security companies.

The committee would include representatives of the Civilian Secretariat for Police, the

Private Security Industry Regulatory Authority, as well as the Departments of Trade and

Industry, Home Affairs and International Relations.

The Security Industry Alliance (SIA) is opposing the bill, saying foreign-owned security

companies, including G4S, Securitas and ADT, would be subjected to compulsory

expropriation without compensation if the bill is passed into law.

Webber Wentzel director Peter Leon said on Monday that the bill created a system of

compulsory indigenisation of private security companies with no compensation.

He said "it has vague conditions for exemptions for companies" but it "didn’t say

companies will be exempted on a retrospective basis".

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"You can’t pick and choose when it comes to the WTO. It’s a set of agreements that SA signed up to. Gats does provide for certain general exceptions, but they have to apply to article 14 and must not lead to arbitrary inhibition of trade," Mr Leon said.

The bill has been waiting for President Jacob Zuma’s signature for more than a year.

The SIA has threatened legal action if the bill is signed into law, while WTO member states where affected companies are based could seek compensation from SA.

SIA official Costa Diavastos said the provisions for exemptions in the act were "nebulous, unclear and impractical".

"The multi-ministerial committee will be positioned on whether each organisation will be exempt or not. It is unclear how they will apply their thinking," he said.

Trade analyst Peter Draper said other African countries were beginning to emulate SA’s

"restrictive" practices and the country would be locked out of investment destinations due to such policies.

"Our partners in the region are watching SA closely and emulating what we do. Markets in Namibia, Zambia and others are becoming closed to SA because they see the policies we are putting in place," Mr Draper said.

However, police ministry spokesman Musa Zondi said SA was within its rights to "modify" its Gats and WTO commitments.

"SA can modify its international commitments. The modifying member shall enter into negotiations with a view to reaching agreement on any necessary compensatory adjustment," he said.

Corrosion of WTO’S mandate

Live Mint (Índia)

“This is a very auspicious moment,” says Roberto Carvalho de Azevêdo, as the World

Trade Organization (WTO) celebrates its 20th anniversary. After being Brazil’s trade

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envoy to WTO, Azevêdo took over the reins at the trade body 19 months ago. The successful conclusion of WTO’s ninth ministerial conference at Bali, Indonesia, in

December 2013, three months after he assumed office as director general, got his innings off to a positive start. “After an 18-year drought, Bali proved that the WTO can deliver negotiated outcomes,” Azevêdo had said proudly, after the conclusion of the meeting on the shores of the Indian Ocean. A binding agreement on trade facilitation to harmonize customs procedures across the world along with eight “best endeavor outcomes” (promising to do the best) in agriculture and development for the developing and least-developed countries raised a glimmer of hope that the Doha Development

Agenda (DDA) negotiations can be turned around. DDA negotiations were launched in

2001 to enable the developing and poorest countries to integrate into the global trading system. “2015 is going to be the year of great significance to the multilateral trading system,” Azevêdo declared, at an unusual briefing convened by the Association of

Correspondents of the United Nations in Geneva last week. Members, he said, are busy implementing all the results of the Bali package as well as working on the post-Bali work programme to conclude the DDA negotiations at the tenth ministerial conference in

Nairobi, Kenya, later this year. He described the current phase of work among members as a “solution-finding mode” for addressing the difficult issues in agriculture and industrial goods. “As far as substance is concerned,” he acknowledged, “we have challenges in the domestic support and market access pillars (of the Doha Agriculture dossier).” WTO’s Dispute Settlement Body is functioning well and poised to hit the 500- mark for adjudicating trade disputes. Twenty-three new members, including countries torn by the war on terror such as Iraq and Afghanistan, are currently negotiating to join the trade body. All in all, WTO has done well as a global custodian of the multilateral trading system over the last score of years. But a dispassionate assessment would, however, suggest a few “corrosive” developments, as well as positive ones. The biggest positive development was China joining WTO in December 2001. “The high watermark of multilateralism is marked by the accession of China to the WTO after the success of the

Uruguay Round (which led to the establishment of WTO in 1995),” said a Western trade analyst. But since then, “there is a slow retreat from multilateralism—it is not a disaster yet but a source of considerable anxiety”. WTO has essentially “plateaued” after China’s accession and if anything, its overall performance is a “C-minus”, according to the

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analyst, who spoke on condition of anonymity. The dispute settlement system, which is touted as a jewel in WTO’s crown, has functioned well despite some major resourcing problems. From brooms to aircraft, bananas to cotton subsidies, the controversial US zeroing methodology in anti-dumping trade spats (a calculation device used by the US to establish anti-dumping duty) to Havana rum trademark cases, and the removal of quantitative restrictions to shrimp-turtle trade frictions, almost every issue has been adjudicated. Of course, the US has the distinction of not complying with major rulings for over 10 years. Azevêdo maintained that the dispute settlement system has worked well in 90% of the cases. But it is the non-implementation of the 10% of cases that could prove corrosive in the coming years, as it had happened with the wheat flour and pasta cases after the Tokyo Round subsidies code of 1973-79. Clearly, “one swallow doesn’t make a summer”, said another legal analyst, suggesting that non-implementation implies that a trading elephant can simply buy its way out instead of implementing the rules.

Besides, “what is emerging, however, is a palimpsest of legal regimes: private arbitration, investment treaties, bilateral, regional, and multilateral agreements”, said former WTO appellate judge David Unterhalter. “In this ever-shifting space, the project of multilateralism is not assured… If the WTO was to become but a historical commitment to a foundational set of rights and obligations, then the institution will wither, and with it, the system of dispute settlement,” Unterhalter suggested in his farewell speech last year.

When it comes to the Doha negotiations, it is one of the great ironies that those who launched the round—the US, the European Union (EU) and other industrialized countries such as Norway and Japan—are not prepared to live with the mandate they had agreed to, on the grounds that the realities have changed. Now, after 14 years of spasmodic negotiations, all the previously agreed decisions—the 2001 Doha agreement, the 2004

July framework agreement and the 2005 Hong Kong Ministerial Declaration—as well as the December 2008 draft modalities are set aside to enable one or two members to have their way. Significantly, “the December 2008 draft modalities (in agriculture) are the basis for negotiations and represent the end-game in terms of the landing zones of ambition”, Azevêdo wrote three years ago, in his previous avatar as Brazil’s trade envoy.

But, in a burst of energy to conclude the Doha Round at the tenth ministerial conference, attempts are now being made to find out what one major industrialized country can live with in the disciplines for agricultural domestic subsidies. It is always credible to arrive at

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compromises by involving all key entities in the room—as the author of the last revised draft agriculture modalities, ambassador Crawford Falconer of New Zealand, did in 2008.

(Falconer had arrived at those modalities after an intensive phase of negotiations with the four major members—the US, the EU, India and Brazil, which was then represented by Azevêdo.) Otherwise, there will be serious questions on the “integrity” and

“credibility” of a process that produces a half-baked, gerrymandered outcome to put the

Doha Round to bed. That would be a shameful and quiet burial in the night of a poor person in poverty. History would not be kind!

WTO Sets up Disputes Panel over Russian EU Trade Tariffs

The Poultry Site (Inglaterra)

GLOBAL - The dispute settlement body of the World Trade Organisation has established a disputes panel over Russia’s tariff treatment of agricultural and manufacturing goods from the EU.

Russia was first referred to the World Trade Organisation in October last year following new import regulations on certain goods.

The move followed retaliatory action against the EU over its stance in the crisis between

Ukraine and Russia.

The European Union claimed that the measures were inconsistent with part of the GATT agreement made in 1994 and with the Customs Valuation Agreement.

On 10 March, the EU made its first request to the disputes settlement body for a panel to be established to look into the dispute.

The EU said that despite efforts to find a solution with Russia, the measures remained in place and continued to hamper trade.

The EU then called for the establishment of a panel to examine the dispute for the second time last week.

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Russia, however, told the WTO that it was convinced that this matter could be resolved

through further consultations with the EU.

Despite Russia’s request, the dispute settlement body established a panel.

Brazil, Canada, Chile, China, Colombia, India, Japan, Korea, Moldova, Norway, Ukraine

and the United States have reserved their third-party rights to participate in the panel’s

proceedings.

II. NEGOCIAÇÕES REGIONAIS E BILATERAIS

EGA Product List Nearly Ready; Parties Set Format For Scope Negotiations

Inside U.S. Trade (EUA)

The United States and other participants in the talks for an Environmental Goods

Agreement (EGA) have paved the way to begin substantive negotiations in May on which

products will ultimately subject to tariff elimination. They have done so by setting

Wednesday (April 1) as the deadline for participants to come forward with their final

product nominations, and by agreeing on the format for conducting the negotiations on

product scope, sources said.

The 17 EGA members have spent the last eight months submitting product nominations

based on 10 broad categories of goods related to the environment. The April 1 deadline

is aimed at wrapping up that process so that EGA members can spend the following

month consolidating the list and eliminating duplicates, before beginning the product

scope negotiation at their next round, slated for May 4-8 in Geneva.

In terms of the format of that negotiation, EGA members have agreed to individually

examine each of the roughly 600 tariff lines that has been proposed, and gauge the

support among the membership for its inclusion in a final deal, sources said.

During this process they will also examine the so-called “environmental credibility” of

each product, which refers to its contribution to environmental protection or

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conservation. EGA members have not developed any general criteria for determining a product's environment credibility, and will therefore examine it on a case-by-case basis, sources said.

One Geneva source said EGA members are considering starting with the highest- numbered tariff lines in the Harmonized System (HS) and working their away down.

To help speed up the process of considering and negotiating each tariff line, EGA members will also group together any tariff lines that are related to each other, sources said. For instance, members could consider tariff lines connected with light-emitting diodes (LEDs) all at once, even though they would normally be located in various HS chapters, according to one Geneva source.

But even if members decide to group these lines together, the decision on whether the lines should be liberalized will still be done on a line-by-line basis, another Geneva source said.

This source said EGA members will begin this line-by-line analysis at the May round, but will not make any final decision at that meeting as to whether these products will be in or out. He indicated that EGA members would repeat this line-by-line process at least two more times before finalizing the list. This source said EGA members would not discuss he length of tariff phaseout periods during the May round.

EGA members appear to have attached different degrees of weight to the April 1 deadline for submit all remaining product nominations. The United States in particular is pushing for it to be a hard deadline for all countries except the three that joined the EGA in the last few months: Israel, Turkey and Iceland. By contrast, other EGA members see it as soft deadline after which any participant would still be able to submit additional product nominations, sources said.

“April 1 is the deadline for product nominations, with flexibility being provided for new members,” a spokesman for the Office for the U.S. Trade Representative said in a March

27 email to Inside U.S. Trade. “Most EGA members have nominated products in this process thus far, and we expect new members will also nominate products soon.”

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EGA members during the fifth round of talks in Geneva March 16-20 discussed product nominations for the final three environmental categories that they agreed on at the outset of the talks -- environmental monitoring, analysis and assessment; environmentally preferable products; and resource efficiency.

According to a March 27 press release from the Norwegian mission to the WTO, Norway nominated nine tariff lines in the category of environmentally preferable products. Its nominations included bamboo construction materials and pumps that are powered by renewable energy.

Environmental credibility is one of three potential hurdles in the EGA talks that have been highlighted by Geneva sources as well as Simon Newnham, minister- counselor for trade at the Australian Embassy in Washington. Australia is the permanent chair of the EGA talks.

The others are how to address so-called “dual-use” goods, which have both environmental and non-environmental applications, or how to assuage fears by some countries that lowering tariffs under the EGA could amount to them giving up leverage in the Doha round negotiations on industrial tariffs.

One Geneva source said that, like environmental credibility, EGA members will address these two issues as they arise in the line-by-line negotiations on product scope. “All of those issues … will be part of the discussions as we go through line-by-line,” the source said. “How we resolve all of them will be done on a case-by-case basis.”

Some environmental groups like the Sierra Club and the World Wildlife Fund have criticized the EGA on the grounds that some of the products under discussion may not be environmentally friendly or produced responsibly.

One way EGA members attempted to address this criticism was by bringing in experts to describe the environmental impact of specific products under consideration. For instance,

Norway invited Professor Edgar Hertwich, the director of industrial ecology program at the Norwegian University of Science and Technology, to give a presentation on resource efficiency at the round, according to the Norwegian mission's press release.

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Similarly, EGA members are not being specific on how to address other challenges that could arise in the talks, like how to address so-called “dual-use” goods, which have both environmental and non-environmental applications, or how to assuage fears that lowering tariffs through the EGA could amount to countries giving up leverage in the

Doha round negotiations on industrial tariffs. One Geneva source said these issues would be addressed as they came up.

Brazil and Mozambique sign agreement for cooperation and Investment facilitation

MacauHub (China)

The Brazilian Minister of Development, Industry and Trade, Armando Monteiro, Monday in Maputo is due to sign a Cooperation and Investment Facilitation Agreement (ACFI) with the government of Mozambique, according to a statement from the ministry.

The ceremony will also be attended by Brazil’s Foreign Affairs Minister, Mauro Vieira, and the Minister of Foreign Affairs and Cooperation of Mozambique, Oldemiro Balói.

The agreement aims to strengthen the internationalisation of Brazilian companies by giving investors greater security.

Mozambique will be first country with which Brazil will sign the ACFI, which should drive negotiations with other African countries.

According to minister Armando Monteiro, “we will boost investments, reduce risks and settle disputes. The new agreement includes social responsibility clauses and commitments to local communities,” he said.

Under the agreement a joint commission will be created, with government representatives from both countries, to monitor the agreement, investment opportunities and, above all, joint action to prevent disagreements and promote amicable settlement of any disputes.

In 2014 trade between Brazil and Mozambique totalled US$74 million.

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The Brazilian delegation has already visited Sao Tome and Principe and after Mozambique

will travel on to Angola and Ghana.

III. OUTROS

Brazil's Pots And Pans Clamor For Progress

Forbes (EUA)

NEW YORK – The Petrobras scandal in Brazil has metastasized beyond President Dilma

Rousseff’s control, bringing Brazilians back onto the streets in a groundswell of

discontent. This latest iteration of the “panelaço,” that distinctly Latin American form of

mass protest by banging pots and pans, served to mute a recent nationally televised

speech and send a clear message of “you’ve had your chance and blew it, we’re not

listening anymore!”

But amid the clanging there are upbeat notes for the patient and well-tuned ear.

Investors who are positioning to weather the gloomy forecasts for the country’s

immediate prospects can take heart in the positive back-story at play: the mainstream

voting populace’s focus on transparency and good governance. That these two pillars for

sound and sustainable business have also converged in the political spectrum bodes well

for the country’s business landscape in the long run.

For now, however, all due caution is in order. Brazil is mired in a political and economic

crisis s with no easy solution. The next national elections are way off in 2018, and

despite the rumors, impeachment is a practical non-starter. Rousseff’s coalition will likely

continue a haphazard duck-and-swerve through this confidence crisis. In parallel, the

ruling Workers’ Party will pull out the stops to shore up its core constituencies, namely

unions, low or no-income beneficiaries of cash transfer programs, and historical

strongholds in the north and northeast.

The center-right opposition has the wind at its back. Its lead party, the Brazilian Social

Democratic Party, has been consistently narrowing the election gap—losing the

presidential election in 2014 but by the narrowest margin since 2002. It now has a

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historic opportunity to lock in elements of the lower middle-class previously loyal to the

Worker’s Party. Many of these voters lament the deterioration of the country’s once- revered economic champions, such as Petrobras and CSN, the national steel company.

They see government ineptitude as the cause, and are growing increasingly angry about it..

In order to capitalize on this discontent, the opposition needs to further shed its

“business elite friendly, out of touch with the people” image and cultivate one palatable to the emerging middle class – a coveted group whose agglomerated support is essential to winning the presidency and leading majority coalitions in the Congress. The fact that the opposition is rallying around two interconnected themes—governance and rational economic policy—is a clear reflection of public attitudes. And with increased economic stagnation, public awareness and agitation only increase in demanding an answer for how each and every one of “their Reais [currency] are being spent.”

The kitchen quartets have played their tune. But what seems at first to be the sounding of an alarm is also a demonstration of Brazil’s world-famous optimism and resilience in the face of disappointment. It is clearly determined to cast away the “take-off, crash- landing” narrative which Brazilians are raised to loathe and lament. Persistence, agility, and a geologist’s patience are in order for sure. But at least for now, the focus is zeroed in on what is central and sound for business and society alike.

Brazil Has No Room for Errors, Finance Minister Says

The Wall Street Journal (EUA)

SÃO PAULO—Brazil’s policy makers have run out of quick fixes for the country’s economic problems and the government has no room for mistakes as it implements new policies to get its budget in order and spur growth, Finance Minister said Monday.

During President ’s first term in office, the government used a series of so-called anticyclical measures including targeted tax cuts and subsidized credits for many types of purchases to try to keep consumers spending and companies investing.

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“We have to recognize that the scenario has changed,” Mr. Levy said at a conference

Monday. “The capacity for anticyclical [measures] has been used up.”

Mr. Levy has begun to roll back many of those measures, and has announced tax increasesand spending cuts to reduce the government’s budget deficit, keep the national debt under control and maintain the country’s investment-grade credit ratings.

The finance minister, who has held that job since early January, said Brazil’s public debt is relatively high compared with its peers and needs to decline for it to hold on to its current ratings.

Mr. Levy’s efforts are already having some success. Last week Standard & Poor’s Ratings

Services left its ratings for Brazil in investment-grade territory with a stable outlook.

Finance ministry officials have met with analysts from Fitch Ratings in recent weeks, along with S&P analysts, but Fitch hasn’t announced its decision yet.

The commodities boom that until recently fueled economic growth in Brazil and helped swell government coffers has ended, and the country’s leaders need to adapt to the new reality, Mr. Levy said.

As part of that effort, the government is making a strong effort to make social spending more sustainable while ensuring it has adequate revenue, he said. With all the changes the government is making, as long as it avoids making mistakes, the country’s economy should start to recover soon, Mr. Levy said.

“If we avoid risks, I’m certain that we’ll get through the adjustment phase rapidly,” he said. “We’re going to have new conditions in a period of significant growth.”

Brazil's Rousseff, Levy rush to ease fears about austerity plan

Reuters (EUA)

Brazilian President Dilma Rousseff and Finance Minister Joaquim Levy moved swiftly on

Monday to quash concerns about their working relationship following a political stir over the weekend that threatened to derail the passage of austerity measures.

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At a São Paulo event that gathered more than 600 business leaders, an adamant Levy said the government will get congressional approval for spending cuts this year and avert a debt rating downgrade.

The comments came after Levy told a private audience last week that Rousseff was well- intentioned but does not always act in "the most effective way," remarks that stoked fears of tensions between the two at a time when the government is struggling to push through budget cuts.

Levy said over the weekend that his remarks had been taken out of context, a view that

Rousseff endorsed on Monday.

"There is no need to create a fuss about this. He has explained himself exhaustively,"

Rousseff said at an event in the northern state of Pará. "I'm sure he was misunderstood."

The benchmark Bovespa stock index accelerated gains and rose over 2 percent as both leaders spoke. Brazil's currency, the real, wiped out early losses and firmed 0.61 percent against the U.S. dollar.

Rousseff named Levy after winning re-election in October, pressed by rapidly deteriorating budget and current account deficits and what seemed an imminent downgrade of Brazil's credit rating. Their partnership has proved fruitful so far, with Levy winning additional responsibilities, sources told Reuters this month.

'SOLID TRUST'

Levy also said on Monday he will meet Senate President Renan Calheiros to discuss the fiscal austerity push.

Levy, unlike Rousseff, is a strong advocate of free markets. He helped design a similar fiscal adjustment program under former President Luiz Inacio Lula da Silva, Rousseff's predecessor and political mentor.

Since her second term started in January, analysts and investors have closely monitored signs for any ideological differences might drive them apart. But Monday's comments

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reinforced the view that Rousseff is engaged with Levy's fiscal plan and is supporting it, traders said.

Levy said "there is mutual, very solid trust" between Rousseff and him. "We will continue to work together to finalize the adjustment program."

The Rousseff administration remains "strongly confident" that Congress will pass legislation aimed at streamlining spending, Levy said on Monday. Passage of those measures should help the economy resume growth later this year, he added. (Additional reporting by Renan Fagalde and Cesar Bianconi; Editing by Todd Benson and Richard

Chang)

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