Brazil warns that war may hinder trade talks

news.ft.com By Richard Lapper and Raymond Colitt in Brasília Published: March 14 2003 23:01 | Last Updated: March 14 2003 23:01

War in the Middle East could increase economic isolationism and set back free trade negotiations, Brazil's foreign minister has warned.

Celso Amorim told the Financial Times: "Once you have entered into a period of instability it becomes more difficult. People tend to become more defensive and more nationalistic. It doesn't augur well."

He suggested that the rift over Iraq between the US and some European countries would "inevitably affect trade negotiations", in reference to the current Doha round of World Trade Organisation talks.

Such a setback would be particularly damaging because President Luiz Inácio Lula da Silva has begun to abandon his longstanding opposition to the US-led Free Trade Area of the Americas.

The success of Brazil's trade negotiations with the US and Europe depends largely on progress at the WTO.

"In a politically unstable world it is more difficult to make political and economic concessions," said Mr Amorim. "There is no feeling of rejoicing about this. We need US leadership for many things we need to do in this world."

Brazil has offered to help Colombia's US-supported government to combat growing drug-fuelled violence. Mr Amorim said Brazil had proposed an arms embargo to be monitored by the United Nations Security Council, denying weapons to leftwing guerrillas and rightwing paramilitaries.

But Brazil would not accept Colombian requests to classify clandestine leftwing groups as "terrorists", suggesting this would end all possibilities for negotiation. Mr Amorim said it was important to keep communicating.

He welcomed US acceptance of a multilateral approach to the political crisis in Venezuela, where Brazil is leading a group of six "friends", along with the US, Spain, Chile, Mexico and Portugal. He said prospects for a negotiated settlement to the political crisis in Venezuela had improved since the end of the general strike.