United States Trade Brazil

Brazilian leaders have hardened their stance on joining a proposed hemispheric free-trade zone, saying they will agree only if the United States opens up its agricultural and steel commodities markets and modifies anti-dumping laws. Their comments over the last week are the latest in a string of Brazilian complaints that U.S. trade policy unfairly keeps the South American nation's orange juice, sugar, tobacco and steel out of the world's richest markets.

President Bush and Brazilian President Fernando Henrique Cardoso acknowledged Friday that tough negotiations lie ahead as the Western Hemisphere's two largest economies jockey for advantage in creation of a 34-nation trading bloc joining North and South America. Although Bush and Cardoso asserted that they share a belief in global free trade, they conceded that seemingly minor disagreements can have billion-dollar consequences.

Brazil, a world leader in food exports, won U.S. support and near unanimous agreement from 16 other major agricultural nations on Monday to insist liberalized farm trade be at the center of any new round of global trade talks. Farms produce the equivalent of about 50% of global economic output. But agriculture is one of the most heavily subsidized and protected sectors in the world.

Under pressure from U.S. steelmakers and labor unions, President Clinton on Friday imposed punitive tariffs on steel imports in a move that could increase trade tensions between the United States and major steel- producing nations such as Brazil, Japan and South Korea. The White House said the tariffs will apply to imported steel wire rod, which is used to make hangers, cables and fasteners, and imported line pipe.

The Clinton administration said it was planning to file World Trade Organization cases against Brazil and five other nations, accusing the countries of unfair trade practices that are hurting American businesses. Brazil was targeted for two alleged violations, one involving textile products and the other one covering the administration's belief that the country needs to increase patent protection for U.S. products.

The economic woes of Brazil have sent auto sales plunging and the impact is being felt in the United States and Europe, where manufacturers have recently come to count on the high growth and profits produced in the region, the world's eighth-largest car market. Predicting that Brazil's automobile sales will fall 17% next year, Merrill Lynch said Monday it expects the slump, combined with the lesser impact of Southeast Asia's own set of problems, to cost General Motors Corp. and Ford Motor Co.

While U.S. officials focus on the contagious turmoil in East Asia, a sharp slowdown expected in the Brazilian economy is likely to spell bigger trouble for the many American companies that have gotten rich in recent years off this country's remarkable resurgence. Legions of U.S.

International lenders Friday officially completed a plan to roll over South Korean short-term debt through March 31, a source close to the talks told Reuters. "It gives us the time to sit down and work out an agreement with the Koreans longer term," the source said. U.S. Deputy Treasury Secretary Lawrence Summers had said South Korea needs to strike a deal with international lenders "as rapidly as practicable" to roll over its short-term debt and strengthen investor confidence.

President Clinton probably will announce next week that he will seek voluntary agreements with Russia, South Korea, Japan and Brazil to limit the amount of steel they ship to the U.S., two Clinton aides and two industry officials said Thursday. Clinton is looking at two Commerce Department plans to stem the tide of cheap steel imports coming into the U.S. market. The two Clinton aides said one plan would allow Russia to continue to export steel to the U.S.