Agricultural powerhouse Brazil on Monday saw a USD10 billion trade boost from what President Luiz Inacio Lula da Silva called a victory in world trade talks to end rich nations’ farm subsidies.

Lula’s center-left government led poor nations in the World Trade Organization (WTO) talks that reached a deal at the weekend to end billions of dollars in export subsidies. “The key number is zero for export subsidies”, Brazilian Foreign Minister Celso Amorim told reporters.

Amorim expected the elimination of the subsidies to create around USD 200 billion in extra trade for developing nations. He saw up to five percent, or USD 10 billion, of that going to Brazil.

A top exporter of sugar, coffee, meat, orange juice and soybeans, Brazil formed the G20 bloc of poor nations at WTO talks in Cancùn, Mexico last year, to dismantle rich nations’ farm subsidies. The Cancùn talks collapsed as the G20 tried to push agriculture into the center of talks. “We finally managed to reach American hearts and minds, European hearts and minds and now subsidies are no longer such a huge obstacle to exports”, Lula told a business conference, before congratulating his ministers on “victory” in Geneva.

<B>Farmers want more</B>

The G20 argued rich nations’ agricultural subsidies priced its competitive agricultural exports out of world markets and kept some of the world’s poorest nations in poverty.

“The ones that really wanted a deal were the developing countries”, said Mario Marconini, a former WTO official and director of the Brazilian Center for International Relations.

Away from the political celebrations, Brazilian farmers said there was still a long way to go at the WTO. “The only concrete result is on export subsidies but that won’t be immediate”, said Ricardo Cotta, trade adviser at the National Confederation of Agriculture.

He saw some progress in WTO talks on cutting domestic subsidies by fixing an overall target and limits for individual products. “But very little was gained on market access”, Cotta said, adding that countries could draw up lists of sensitive farm products which needed special protection.

Brazil exported USD 73 billion in goods and services in 2003. Agriculture, accounting for just over 40 percent of Brazil’s export earnings, is essential to economic recovery in South America’s largest country.

Leaders of Brazil’s sugar industry said there was very little benefit for their sector. They are awaiting a preliminary WTO ruling this week on Brazil’s challenge to EU sugar export subsidies. The G20 will now focus on reducing the 90 billion euros in domestic subsidies given to European farmers and the nearly USD 40 billion given to US farmers.

What remains to be seen is the extent to which the G20 can stay together when talks resume in 2005. Top members Brazil, India and China, have different and competing interests in access to industrial and farm markets. “It’s still a very preliminary advance”, said trade specialist Marcos Jank, who advised Brazil at the Cancun talks.