Upon assuming command of the nation, President Luiz Ináncio Lula da Silva declared that trade negotiations are of vital importance for Brazil. Beyond an internal effort to improve the competitiveness of our products and to diversify our exports, he made it clear that we could not stop the struggle, on the international stage, for the opening of new markets and for more just rules, respecting the sovereign right of the Brazilian people to decide about their model for development.

In this spirit, the Lula government has sought to reinforce MercoSur, promote South American integration, explore new trade partnerships * above all with large developing countries * and to actively participate in the negotiations in process: the WTO, the FTAA process and the MercoSur-European Union negotiations.

In terms of the FTAA, we encountered a complex negotiating context from the point of view of Brazilian interests, subject to a timeframe that left a narrow margin for the eventual correction of the direction of the talks. The way that negotiations have developed, the FTAA project is far from the spirit and connotations of the expression "free trade." In effect, the proposals under discussion include regulatory aspects on services, investment, government procurement and intellectual property which would directly impact the regulatory capacity of countries.

Meanwhile, the outlook for gaining free access to the largest market in the hemisphere for the products in which we have a competitive advantage (above all, but not only, agriculture) is not encouraging. Priority issues for Brazil, such as agricultural subsidies and anti-dumping measures, will be excluded from the negotiations. The discussions about market access have been done in a fragmented manner, such that MercoSur was given less favorable treatment, with [phase-in] periods for market access [to the U.S.]longer than those offered to other countries in the continent.

It should be remembered, however, that we already have negotiating channels to move forward with an agenda for Latin American integration in the context of ALADI (Latin American Integration Association), especially for South America. These measures benefit from the legal coverage of the so-called "license clause" in the WTO, which authorizes the exchange of trade preferences between developing countries. Given this, the main interest in our involvement in the FTAA negotiations resides in the expectation of access to the North American market, which, due to its dimensions and dynamic nature, cannot be ignored. It is about, therefore, finding an adequate equilibrium between our offensive objectives, to look at it from the perspective that is combative and realistic at the same time, and the need to not compromise our capacity to design and implement public policy around social, environmental, technological development.

Through a process of reflection and discussion inside the government, which has involved the Congress and civil society in the debate, President Lula approved the broad outlines of the Brazilian position on the FTAA. To be succinct, this position * which is obviously always subject to certain adjustments in the negotiation process * can be described in the following way: 1) The substance of the issues of market access in goods and, to a limited degree, services and investment would be dealt with in a 4+1 negotiation between MercoSur and the U.S.; 2) The FTAA process properly stated would focus on some of the basic elements, such as dispute settlement, special and differential treatment for developing countries, compensation funds, sanitary and phytosanitary rules and trade facilitation; 3) The most sensitive topics and those that represent new obligations for Brazil, such as the rules around intellectual property, services, investment and government procurement, would be transferred to the WTO, using as an example the position advocated by the U.S. regarding its most sensitive areas, such as agricultural subsidies and anti-dumping rules.

The re-envisioned focus on "three tracks" was the object of close consultations with our MercoSur partners and was presented to our North American partners also. It was also debated during the [FTAA] mini-ministerial meeting on the "Wye Plantation" last May and it will be presented in El Salvador this week during the 14th Meeting of the FTAA Trade Negotiations Committee.

The Brazilian vision was also taken by President Lula to a recent summit with the presidents of the Andean community in Colombia. The substantative debate on the FTAA, which followed the president's presentation, contributed to the beginning of coordination vis-à-vis negotiating positions among South American countries. While we recognize that there are important differences between MercoSur and the Andean countries, dialogue between us is fundamental not only for the FTAA negotiations, but for our own South American integration, which is our principal priority.

Therefore, instead of tying ourselves to unrealistic conceptions about a Free Trade Area of the Americas, such as one which revolves around an unattainable consensus, we prefer to concentrate on the "Possible FTAA" which is able to productively reconcile the necessarily different objectives of the 34 participating countries. It is from this consistent and realistic viewpoint that the joint declaration resulting from the meeting between presidents Lula and Bush in Washington expressed the understanding that the two countries will cooperate towards the successful conclusion of the negotiations within the previously agreed upon timeframe.

But timeframes, as we have repeatedly stated, cannot take precedence over content. And "successful negotiations," in Brazil's case, signifies the preservation of the space to autonomously decide our environmental, technological and industrial policies as well as to obtain better conditions for market access in the sectors in which we are most competitive * and which are currently faced with elevated protectionist barriers. The Lula government will not adhere to agreements that are incompatible with Brazilian interests, but it will explore, as a sovereign nation, all of the alternatives for the promotion of our trade and the acceleration of our development.

--------- Celso Luiz Nunes Amorim, 60, is the Minister of Foreign Relations. He held the same post in the government of Itamar Franco.