Brazil, China weigh nuclear trade deal (Free Trade)

RIO DE JANEIRO, Brazil - One day after announcing that Brazil was negotiating the export of uranium and nuclear technologies to China, the Brazilian government Wednesday tried to calm fears raised by the potential accord.

"Brazil has not made any decision," Eduardo Campos, Brazil's science and technology minister, told the state news agency Agencia Brasil on Wednesday during a state visit to China.

In a news release later Wednesday, Campos tried to distance Brazil from declarations a day earlier that Brazil and China would negotiate the sale of non-processed uranium to supply 11 new nuclear reactors in China. Profits from the export of uranium, officials had said, would be used to jumpstart the flagging nuclear program in Brazil, Latin America's largest nation.

Brazil's nuclear programs could lead to the creation of another supply source for the nuclear ambitions of other developing nations. Brazil has already been under fire for refusing to allow inspectors from the International Atomic Energy Agency into a planned facility for enriching uranium.

Brazil said Wednesday it would study China's offer to purchase non-processed uranium. The matter will be discussed again in August when Campos' Chinese counterpart, Zhang Yunchuan, visits Brazil.

Campos also said that cooperation with China eventually could extend to enriched uranium, an ingredient for nuclear weapons.

Brazil's decision to pursue enrichment capabilities is a direct challenge to a new doctrine proposed by President Bush in February. Although a global Non-Proliferation Treaty allows uranium enrichment for peaceful purposes, Bush, concerned that terrorists may build a simple nuclear weapon, seeks a change to prevent countries that do not have enrichment capacity from obtaining it. In exchange, countries could buy nuclear fuel at a friendly price as long as they subjected themselves to tough international inspections.

Brazil rejects the Bush proposal and has been under fire since last year for refusing to allow spot inspections by the International Atomic Energy Agency (IAEA) like those Libya and Iran recently agreed to. The agency wants to inspect centrifuge technology that will be used to enrich uranium at a nuclear research center in Resende, outside Rio de Janeiro.

"We are in discussions with Brazilian authorities to ensure any new nuclear facilities are appropriately monitored," IAEA spokesman Mark Gwozdecky said in a telephone interview from Vienna, Austria.

The U.S. government has expressed concern but not criticism about Brazil's plan to enrich uranium.

James Goodby, a former nuclear arms inspector, said that by not opposing Brazil's enrichment project, Washington is undermining its own negotiations with North Korea and Iran to dismantle their nuclear programs.

"Once you adopt a selective policy on proliferation, you are on a slippery slope," said Goodby, now a research fellow at the Brookings Institution, a policy research organization in Washington.

Brazil sits on the world's sixth largest uranium reserves and maintains that uranium enriched at Resende would be used only for peaceful purposes, since Brazil's constitution forbids development of hostile nuclear technology. Brazil fears inspections of its new energy-efficient centrifuge technology expose it to potential copying of its technology and loss of future market share in a lucrative field worth billions.

Although Brazil does not allow inspectors to see this technology, it does allow them to examine its two operating nuclear reactors.

"Brazil's program is completely peaceful. Brazil is one of the few countries that opens its nuclear installations," said Edson Kuramoto, director of the Brazilian Nuclear Energy Association in Rio de Janeiro. "There is no need to worry that Brazil is interested in hostile uses."

Kuramoto was surprised by the announcement in China but said the association's 1,200 scientists welcome news that earnings from uranium exports to China could bring Brazil the $1.8 billion it needs to finish the Angra 3 nuclear reactor outside Rio de Janeiro. An additional $750 million would be needed to ensure Brazil had the technological capacity to enrich enough uranium to run all three of its reactors.

During Brazil's 21-year dictatorship, ending in 1985, Brazil secretly sold more than 26 tons of uranium dioxide to Iraqi dictator Saddam Hussein. In 1989, the head of Brazil's nuclear weapons programs was hired by Saddam as a consultant.

Brazil is not being accused of returning to those dark days, but global security experts see reason to fear Brazil's march toward nuclear expertise.

"For some it does generate suspicions about what Brazil and Lula's (da Silva's) government intend," said David Albright, president of the Institute for Science and Security, a Washington policy research organization specializing on nuclear security issues. "I don't think they seek nuclear weapons, but are they going to become an irresponsible nuclear trader?"

"The Brazilians know they cannot compete with the big uranium producers," he added, "so are they going to be selling to the Burmas and Vietnams, which means smaller quantities, which is all Resende would be able to export?"

After his election in October 2002, Brazil's President Luiz Inacio Lula da Silva hinted in speech to top military leaders that he intended to resume Brazil's struggling nuclear research program.

"Why is it that someone asks me to put down my weapons and only keep a slingshot while he keeps a cannon pointed at me?" da Silva asked in the speech critical of non-proliferation agreements. He added, "Brazil will only be respected in the world when it turns into an economic, technological and military power."

(DTN) U.S. Trade Representative Robert B. Zoellick announced today the U.S. * Central America Free Trade Agreement (CAFTA) will be signed on Friday, May 28, 2004, at the Organization of American States (OAS) in Washington, DC. Zoellick will sign on behalf of the United States and trade ministers from Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will sign on behalf of their nations.

"CAFTA will promote U.S. exports to a large and important market, even as it supports continued openness and democracy in Central America," said Zoellick. "The FTA will reinforce free-market reforms in the region and will also strengthen the rule of law and sustainable development. Signing CAFTA will fulfill a vision of expanded economic opportunity and trade put forward by President Bush, and will send an important message that the United States is strongly committed to free trade with our Central American neighbors."

President Bush first announced his plan to negotiate an FTA with Central America in a speech at the OAS in January 2002. Following the passage of Trade Promotion Authority and the successful conclusion of a year-long negotiation, the President notified Congress on February 20, 2004 of his intent to enter into the CAFTA. Under the Trade Act of 2002, the earliest date the agreement could be signed is May 21, 2004.

EU, Mercosur nations recommit to free trade deal by October

By ROBERT WIELAARD
The Associated Press
5/27/04 5:52 PM

GUADALAJARA, Mexico (AP) -- The European Union and four South American nations -- Argentina, Brazil, Uruguay and Paraguay -- will aim to sign an "ambitious" free trade accord in October.

The announcement Thursday came as the U.S. drive for a Free Trade Area of the Americas, as well as free trade talks in the World Trade Organization, are at a stalemate.

EU officials and trade ministers from the four Mercosur nations emerged from four hours of talks saying a trade deal was possible, one week after each side made important concessions that injected new vigor in the talks.

"We all had the sense it is possible, with hard work, to finish by the target date of October 2004, with a good and balanced agreement," Brazilian Foreign Minister Celso Amorim said.

Given the precarious state of trade negotiations elsewhere, he spoke of a "window of opportunity" that may disappear.

EU Trade Commissioner Pascal Lamy said both sides weighed their respective trade concessions and saw "progress is possible."

Delegates said they would seek an "ambitious agreement," covering farm trade, industrial tariffs and services.

It would be the first for the EU with a bloc of nations.

The announcement that negotiations will move ahead came a day before 25 EU leaders open talks with their counterparts from 33 Latin American and Caribbean nations.

The summit will be an occasion for the EU to signal it wants to push for free trade deals in the years ahead with a dozen Central American and Andean nations.

"We are not in competition with the United States," EU External Relations Commissioner Chris Patten told reporters.

But he noted the EU seeks deals that cover agriculture -- a politically sensitive area in which Europe has always been protectionist and Latin nations competitive. The United States was opting for "lighter" accords without farm trade, which Washington wants covered in the WTO talks that collapsed last year.

The EU-Mercosur negotiations began a few years ago. They were initially meant to be concluded after January 2005 -- the deadline for the WTO talks.

Lamy said while the EU and Mercosur remained committed to the much wider WTO process, he will ask EU governments to implement the deal with Mercosur by the end of this year if the WTO negotiations remain at an impasse.

EU officials said regardless of an acceleration of an EU-Mercosur deal, liberalizing farm trade remained an essential part of the WTO talks.

The EU has offered Mercosur total trade liberalization for eggs, corn, flour and other products and deep tariff cuts for juices and fruits. Sensitive products, such as meat, would remain subject to quotas and possibly duties, officials said.

In turn, the EU wants Mercosur to open public works projects to European bidders and also open up their banking, insurance and other service industries, plus car, chemical and pharmaceutical sectors.

The Europeans also want the South Americans to protect hundreds of other products that enjoy protection in Europe, based on regional origin, against imitators.

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