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The Brazilian Congress is considering the suspension of intellectual property rights of American products in Brazil to force the U.S. to change its policy on the subsidies it now grants its cotton farmers.
For Fernando Gabeira, a Rio de Janeiro representative for the PV (Partido Verde -Green Party) and one of the legislators taking part at the Chamber of Deputies' committee dealing with the subsidies question, suspending intellectual property rights might be the only way left to Brazil to get some leverage in the dispute.
"Even when they have the right, it is hard for poor countries to go against rich countries," Gabeira said last week in Brasília, the Brazilian capital.
He also talked about the economic and social advantages Brazilians might see in such an action. Gabeira mentioned the breaking of AIDS drugs patents, which would significantly reduce Brazil's expenses with fighting the disease.
But the new Brazilian threat goes well beyond breaking drugs patents. What the Lower House committee is discussing is to simply allow the free copy and reproduction of every intellectual property including books, music, movies and software.
According to Washington-based Environmental Working Group, a non-profit organization specialized in environmental investigations, American cotton farmers received US$ 1.6 billion in federal subsidies in 2004.
The U.S. has until July 1st to explain what they are going to do about their subsidies to cotton farmers, who have a very strong lobby in Washington.
The American practice was condemned by the World Trade Organization after Brazil and other countries sued the U.S. over the matter. The WTO went against the U.S. once and then again after the American appeal was rejected.
The WTO decided that the U.S. subsidies were distorting world prices for cotton since it stimulated overproduction.
Neil Turkewitz, an executive vice president of the Recording Industry Association of America, told the Los Angeles Times that "Essentially, the Brazilian position would be, 'We're going to have state-sanctioned piracy,' "
The Times article also heard U.S. trade officials who commented that it's not unusual for nations to retaliate in trade disputes with the imposition of high tariffs. They indicated, however, that sanctioning the copying of a country's products is unconventional and maybe illegal.
For Richard Mills, a spokesman for Rob Portman, the U.S. Trade Representative, the Brazilian response is premature. "We intend to comply so there will not be any need for retaliation," he said.
Pedro Camargo Neto, an adviser to the Brazilian Rural Association and a former trade official of Brazil's Agriculture Ministry suggests that the Brazilian legislators purpose is to draw the Silicon Valley and Hollywood into a trade battle, which already counts on the American drug industry.
"We want other parties in the United States to understand that what the cotton lobby is doing is not in their interest," Camargo told the Times.
Former U.S. ambassador at the UN during the Reagan administration, Ken Adelman, criticized on a May 9 article, in the Washington Times, the preferential treatment the Bush administration has been giving Brazil and what he sees as the communist government of President Luiz Inácio Lula da Silva.
"Brazil presents the U.S. with a set of challenges - commercially and geopolitically - as serious as those posed by Venezuela or Cuba...Brazil - particularly its President Lula da Silva - is one of those Washington conundrums: an antagonist of American
policy but one strangely treated like a partner and ally."
Adelman goes on: "Lula's younger days of communist rallies and his long ties to Fidel Castro are unmentioned in Washington. But his country's out-of-control theft of American intellectual property may dredge all of that up.
The author criticizes Brazil for breaking AIDS drugs patents: "Even as Miss Rice stood beside Lula at press conferences, the Brazilian government was telling the media it would confiscate AIDS drug patents from American companies, saying it could not afford the drugs. Days later, this hemispheric power with a thriving aerospace industry predicted it would gain a permanent seat on the U.N. Security Council.
Adelman asks that the U.S. punishes Brazil for its disrespect for intellectual property: "Brazil's trade violations and abandonment of intellectual property rights are well known, and it must be treated by Washington as the global power it is. Some groups have even asked the U.S. to rescind Brazil's trade privileges with our country - worth almost US$ 3 billion in duty-free imports - because of chronic inability to stabilize the software and entertainment piracy emanating from Brazil."
And Adelman concluded: "The stakes of this modern piracy are high. IP theft has already cost the U.S. some 750,000 jobs. It costs our businesses a whopping US$ 200 billion yearly, the U.S. Customs Service says. This war is waged on many fronts: music, software, films and pharmaceuticals the most flagrant. It must be waged against many foes: Brazil, China and India foremost among them."
The Brazilian ambassador in Washington, Roberto Abdenur, answered Adelman's criticism in a letter to the Washington Times, published May 12 in that paper:
"I was surprised and dismayed to read Monday's Commentary column "Praise for piracy?" by Kenneth Adelman. With all due respect, the text is based on a series of gross misperceptions and distorted arguments.
"I do not think I need to say much about the references to President Luiz Inácio Lula da Silva. Mr. da Silva's historical struggle for social justice, his long-standing commitment to democracy and his credentials as a consistent and innovative world leader speak for themselves.
"Having said that, let me clarify the nature and the dynamic of the relations between Brazil and the United States. Although, of course, it is only natural that our two nations have different views and outlooks on some international issues, the fact is that there is fundamental convergence in our support for democracy.
"Brazil has been a bulwark of stability in its region. Presidents da Silva and Bush have developed a very friendly relationship and a smooth and fruitful dialogue. Our governments consult and work together on a wide range of subjects.
"They understand and respect each other. Besides the many elements that have been at the core of the friendship between Brazil and the United States for almost two centuries, those are the factors that today underlie this particularly positive stage of our bilateral relationship.
"As regards Mr. Adelman's allusions to intellectual property rights, I would like to stress that combating piracy is a national priority in Brazil, one that is shared by the Brazilian executive authorities, Congress, civil society and the business sector.
"In October 2004, a new National Council for Combating Piracy and Intellectual Property Crimes was established. The council, headed by the deputy minister of justice, and with significant private-sector representation, is a watershed in the coordination of initiatives and actions among different governmental agencies and the private sector.
"More law enforcement actions have been taken in the area of intellectual property rights in recent months and years than at any other time. Seizure and raids have been significantly increased.
"As for the specific issue of drug patents, I must underline that it is an important component of a much broader policy Brazil has put together to fight against AIDS. This policy, of which we are very proud, has produced results at both the prevention and treatment levels that are recognized all over the world.
"The intellectual property rights dimension of its programs is fully consistent with international law. The Doha Declaration on Trade-Related Aspects of Intellectual Properties and public health leaves no doubt about that.
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