By Sergio Leo From Brasília - Valor, 21/09/2004

Photo: Marisa Cauduro / Fotosite / Valor
Allgeier: "We know that there are problems on the border with Paraguay, people who bring pirated products to Brazil"

The United States does not require changes to Brazilian laws, but it wants concrete information from Brazil on government actions to enforce intellectual property protection laws, United States Deputy Deputy Trade Representative Peter Allgeier told Valor. If the Brazilian responses are unsatisfactory, the country can be excluded from the General System of Preferences (SGP), which guarantees the entry of Brazilian exports equivalent to US $ 2,5 billion in American territory, without payment of tariffs.

Allgeier revealed to Valor, however, that he is in no hurry to redefine Brazil's situation in the SGP. The decision may take "several weeks". Second man in the hierarchy of the United States Commercial Representation, under Robert Zoellick, Allgeier arrives in Brazil today, for discussions with the Brazilian government, preceded by a lecture at the Brazil-United States Chamber of Commerce. He recognizes Brazil's "hard work" with the US to unlock discussions at the World Trade Organization (WTO), and says that this week's meetings in Brasilia could unlock discussions for the Free Trade Area of ​​the Americas (FTAA).

Here are the main excerpts from the telephone interview yesterday:

Valor: What is the main objective of your trip to Brazil?

Peter Allgeier: We are going to hold a meeting of the Brazil-United States Bilateral Consultation Mechanism, created a few years ago to deal with issues related to our bilateral relationship. Let's look at some problems; the main one is the protection of intellectual property. We will also discuss issues such as the outcome of the World Trade Organization negotiations and what each of us is doing in the other trade negotiations. We can share an assessment of where we are in the various negotiations, such as between Mercosur and the European Union, or the various bilateral agreements that we are negotiating in the region.

Value: Mr. did you have any prior information about Brazil's performance in intellectual property?

Allgeier: We have, for some years, consulted with Brazil on the problem of violation of intellectual property protection in Brazil, particularly in the area of ​​copyright, and this is an issue that is certainly recognized by our industry, which calculates having lost $ 750 million last year to piracy in Brazil. But this is also an issue that raises the attention and concern of the Brazilian domestic industry. Second, there was the Parliamentary Commission of Inquiry on piracy, which did a very comprehensive job on the subject and generated a wide range of responses. On our side, we have the added dimension that protection of intellectual property is one of the criteria required by law in the assessment of our General System of Preferences.

Valor: What about the measures taken by the Brazilian government?

Allgeier: In terms of what Brazil is doing, or saying it is doing, we had some meetings in the last few months, to exchange views on this. One of the things we will see this week is the report on the steps that Brazil is taking or planning to take and that describes what we do in the United States to ensure the enforcement of laws. This report will be one of the main things that we will evaluate, back to the USA, after September 31, as part of the SGP review. In the SGP system, interested parties in the USA can raise concerns and ask us to investigate, and the American industry has filed a petition saying that we must investigate this issue in Brazil. In June, we postponed any review for 90 days, until the end of September, to have the chance to confirm everything with Brazil, we knew about the Piracy CPI, we wanted to see what would come out of it. What we can say is that it will be an important element in the review.

Valor: Is it possible to say whether or not Brazil will lose the advantages of the SGP?

Allgeier: We are not going to make that kind of decision during our visit to Brazil. What we will have is a very substantive dialogue with the Brazilian government, and the different agencies in the country. We will use the report as a point of reference, collect as much information as possible, and exchange views on what can be effective in the future. We are going to take the information back to the United States, and do an intragovernmental review of this material and others that we collect. At some point in the future, we will make a decision on whether to continue the investigations, whether to conclude them, whether to modify the benefits for Brazil. But it is not a decision to be made either on that trip or precisely on September 31.

Valor: Is there no deadline for the decision?

Allgeier: What is there is a schedule, which sets September 31 as the date for us to analyze what happened in that period. It will take at least a few weeks to evaluate the results of this among US government agencies. What kind of material do we have, what clarifications will we need. But there is no legal requirement that we make an announcement on a certain date. Realistically, these several weeks are what we will need; is what we will spend to evaluate the material, very possibly we will ask for additional clarification.

Valor: What kind of information or improvement in government action will be needed to avoid Brazil's exclusion from the SGP?

Allgeier: It is, by far, a question of law enforcement; it’s not that we’re looking for a lot of changes in intellectual property protection legislation. There are some things that Brazil will explain to us, how they intend to improve coordination between the various agencies with responsibilities to watch over the law. We know that there are problems on the border with Paraguay, people who take pirated products in other markets to Brazil. What actions is Brazil preparing to face these problems? These are issues of education, of people, and perhaps, of the Judiciary, of prosecutors, about protection of intellectual property. We will focus on law enforcement. There are changes in the civil code, from what we hear.

Valor: What mr. do you mean by “educating the Judiciary”? Doesn't Justice have enough information?

Allgeier: We find in other countries the need for a modern assessment of the variety of these crimes, the damage they inflict. And also for people to assess what kind of activities contribute to this piracy. We will share opinions on what we do and what is done in the country.

Valor: What aspects of the American experience could be transposed to Brazil?

Allgeier: We are not trying to impose the American system on any country. We will exchange views on how our prosecutors have acted against piracy, the equipment used to manufacture pirated goods. We can exchange views on how our customs system operates, on the import of pirated products, how to recognize this material. These are technical questions. Customs is an area where it will be useful to share experiences.

Value: Mr. discuss the recent American barriers against Brazilian shrimp exports?

Allgeier: Certainly, we hope that the Brazilian side will raise this issue. We have a senior Commerce Department official who will discuss the matter in detail. We need to exchange views on this before any decision is made.

Valor: What do you intend to do in relation to the WTO decision to condemn the Byrd Amendment, which allocates surcharges to American industry on exports from other countries accused of dumping?

Allgeier: The administration's position on the Byrd Amendment is very clear. We accept that we will have to comply with the WTO rule. The budget submitted by the president to Congress did not include funds for payment to producers as provided for by the Byrd amendment. It can be repelled in Congress, and we are working on this controversial issue there to reject or modify the Byrd Amendment.

Valor: Brazil asked for the right to retaliate against the United States for this amendment. Does this create any new friction between the two countries?

Allgeier: Brazil and other countries are pursuing their rights in the normal WTO process. Obviously, we hope to be successful in fulfilling our WTO obligations, and countries would not have to face the decision to withdraw benefits granted to the United States.

Valor: How does Brazil's activism in the WTO, with cases such as the challenge to American cotton subsidies, affect the relationship between the two countries?

Allgeier: Our preference, in all cases, is to negotiate a solution. WTO cases help to clarify the interpretation of the organization's rules. But the most favorable result is to negotiate a solution.

Value: Mr. disappointed with the FTAA results? Do you intend to discuss the matter now?

Allgeier: We would prefer to see the FTAA moving at the same pace (as in other negotiations) or more quickly. However, in recent months, both we and Brazil and other countries have decided that the focus should be on getting the WTO negotiations back on track. One reason is that there is really a place where we can deal more effectively with agricultural issues such as subsidies, domestic and export.

Valor: And now?

Allgeier: We now have a good frame of reference at the WTO to move forward with the negotiation of these elements. This can become very useful for us in the FTAA, in the sense that people will have more confidence that these issues will be dealt with more effectively, outside of here, at the WTO. Another issue that has made it difficult for us to advance in the WTO is the need to ensure compliance with the law in intellectual property. I hope that one of the side benefits of our discussion this week through the bilateral mechanism is that it makes it easier to deal with these issues in the FTAA. Obviously, it is something that, to be put back on track, has to be discussed with other countries, not just Brazil and the United States. Our hope is that work at the WTO and our work on the bilateral mechanism can help in this regard.

Valor: With the delays in the FTAA and the progress of negotiations between the European Union and Mercosur, cannot the United States lose space in the Brazilian market?

Allgeier: We are following the negotiations between the European Union and Mercosur, and we are going to see what will happen in terms of investments, services, government purchases. I cannot imagine that Brazil will give things to the EU in the negotiation and not be prepared to negotiate the same issues with the United States in the context of the FTAA. We have similar interests in services and government procurement, let's take a closer look and don't want to prejudge the results.