U.S., Brazil Talks Prove Frustrating : Shultz Unable to Make Headway on Trade, Other Issues

Secretary of State George P. Shultz raised serious concerns with Brazilian officials Friday about aspects of Brazil’s trade and foreign policies, but accomplished little more than an agreement to continue efforts to resolve the differences.

Shultz’s talks Friday were probably were the most important of the South American leg of his 10-day overseas trip, which also includes stops in Central America. Unlike Argentina, Uruguay, Bolivia and Ecuador, the other South American countries on the schedule, Brazil has not improved its relations with Washington during the Reagan Administration.

A major focus of Shultz’s visit to this modernistic but barren capital was Brazil’s strong protectionist trade practices, particularly those that shut out U.S. computer and other high-tech products and its refusal to keep pharmaceutical manufacturers here from copying drugs created by U.S. firms without paying what the Americans consider to be proper compensation.

Another major dispute has been the relatively unrestrained--from the U.S. point of view--arms sales by Brazil to such nations as Libya. Of sharpest concern are the reported talks between Brazilian arms makers and Libya’s radical government for the sale of missiles that can carry nuclear weapons.

To date, the Brazilians have sold the North African nation several hundred million dollars worth of weapons. However, the missile system sought by Libya, called the ORBITA, is still in the development stage, and the Brazilians say no deal has been made yet.

‘Expressed Concerns’

At a news conference, Shultz agreed obliquely, saying, “I don’t see any evidence of any direct missile sale.” However, he added that “I expressed my concerns” about weapons that can carry nuclear weapons.

State Department officials had said earlier that they hoped for a commitment by Brazil not to pursue the missile deal with Libya, but Shultz indicated that nothing had been accomplished. He said only that U.S. officials “will continue to discuss these questions and express our concerns.”

Neither was there any indication that Shultz got any further in his demands that Brazil relax its most stringent trade protectionist policies. Shultz said all the Brazilians agreed to do was continue discussions, and “we hope to bring an end (to the disputes) and resolve them.”

American anger over the issue reached a peak July 22, when President Reagan ordered retaliation by restricting U.S. import of some Brazilian products, a severe blow to a country that counts on selling massive amounts of goods in the U.S. market. Shultz also discussed various world issues with Brazilian officials, including Central America. He appeared to draw the personal endorsement of Foreign Minister Roberto Costa de Abreau Sodre of the American effort to brand Nicaragua as the reason for the failure of the latest Central American peace plan.

Sodre told reporters after meeting with Shultz that he agrees that it is the Sandinista government that is out of step with the other four nations in the region. “Nicaragua has to take a democratic position in order to reach an easier solution to the conflict,” Sodre said.