Brazil may challenge "Buy American" at WTO

BRASILIA Tue Feb 17, 2009 12:11am GMT

BRASILIA (Reuters) - Brazil may challenge the legality of a "Buy American" clause in the recently approved U.S. economic stimulus package at the World Trade Organization, Brazilian Foreign Minister Celso Amorim said on Monday.

"It's a complex legal analysis, but we're doing it," Amorim said. "(Going to the WTO) is a real option," he told the state television channel TV Brasil in a program to be aired later this week.

The U.S. Congress approved a $787 billion plan to jump-start the world's biggest economy on Friday, stipulating that public works and building projects funded by the stimulus use only U.S.-made goods, including iron and steel.

Major commodities exporter Brazil has been a key player in the Doha round of global trade negotiations, and had hoped the G20 group of leading economies would honor a November pledge in Washington to avoid protectionism.

Amorim said the U.S. move was counterproductive, likening it to a pain-killer that heals the symptoms of disease but not its cause. He said the Doha round was not dead but would be hard to revive.

"It's a bad sign. ... It's not positive at a moment when the world economy is trying to revive," Amorim said.

Chinese official media also blasted the Buy American provisions over the weekend, saying they were "poison" to the world economy.

U.S. business groups last week criticized Congress and warned the clause would dilute the bill's impact and invite other countries to keep American goods out of their stimulus programs.

Amorim said he thought Brazil could challenge the "Buy American" clause at the WTO, despite not being a signatory to an international agreement on government procurement.

Brazil's President Luiz Inacio Lula da Silva will speak against global protectionism at the G20 meeting in London next month, Amorim said.

Amorim is expected to meet U.S. Secretary of State Hillary Clinton later this month to prepare a visit by Lula to the United States this year.

(Editing by Stuart Grudgings and Todd Eastham)