AMERICAS: Crossed Wires between North and South

By Mario Osava Reprint | | Print |

Mario Osava

BELO HORIZONTE, Brazil, May 14 1997 (IPS) - The US Trade Secretary Bill Daley said today his country was aiming for the Free Trade Area of the Americas (FTAA) to be “the first trade agreement for the 21st century and not the last of the 20th.”

Daley admitted Washington’s priorities – services, intellectual property, government purchases – were not the same as those of the continent’s developing countries.

“For us there is no sense in negotiating an agreement which limits itself to repeating the World Trade Organisation (WTO) with the elimination of tariffs,” he said in a speech to the Business Forum of the Americas which started its discussion of the 12 FTAA issues Wednesday.

Brazil’s foreign minister, Luiz Felipe Lampreia, said it was legitimate for the United States and Canada to have greater interest in a “post WTO agenda.”

But it is equally legitimate for the developing countries and the Mercosur “to aim to concentrate on issues like agriculture, textiles and manufactured goods, protection mechanisms for the weakest (members) and clarity in antidumping norms,” he said.

“The next generation of trade questions which already need attention are enforced technology transfer, standards, electronic trade, the drawing up of commercial laws and, also, corruption,” added Daley.

The US official stressed that negotiations were already underway between the rich countries in relation to foreign investments and greater transparency in government purchases.

The arguments of the US Trade Secretary and the Brazilian foreign minister put the conceptual discrepancies of the two nations in this preparatory stage of the FTAA negotiations clearly on the table, reflecting the conflicts of interest between North and South.

“There’s no need to reinvent the wheel,” said Lampreia, stating the methodology for negotiating trade agreements has already been installed on various previous occasions, even on a world-wide scale.

The WTO had allowed for “equilibrium between the developed and developing countries,” an aspect which should also be considered in the Pan-American negotiations, he said.

For instance, the agricultural sector, which is not a priority for the United States, could, however, be the decisive factor in a more cautious, gradual and slow process in the implantation of the FTAA, as suggested by several Latin American nations, especially those of the Southern Common Market (Mercosur).

Meanwhile, the fast-track completion of the free trade bloc, hoped for by the United States, would not gain the support of the agricultural sector.

“It would be a disaster,” said Martha Roberts, from the Florida Department of Agriculture, a US state which sent some 72 representatives to the Belo Horizonte meeting with the official delegation in order to defend their interests.

Florida is the main citrus fruit producing area of the United States, which is actively protected from the strong competition of Brazilian orange juice by an import tax of 472 dollars per ton – nearly 50 percent of the value of the product.

“We recognise the need to develop trade on the continent, but carefully so that it does not endanger our agriculture,” Roberts told IPS.

She thus justified the heavy pressure exerted by the agricultural sector on Congress against the fast-track intentions of the central government, aiming to negotiate the FTAA above the heads of parliamentarians.

Roberts said she was very pleased to find they were practically in full agreement with the brazilian entrepreneurs.

Antonio Ernesto de Salvo, president of the National Confederation of Agriculture of Brazil, said, however, the agricultural entrepreneurs of his nation disagree with the US counterparts.

“The FTAA is very convenient for the agriculture of the Mercosur and in particular that of Brazil. The faster the removal of tariffs the better,” he said.

Arguments in the Business Forum and a seminar on trade and agriculture over the last two days left the level of agreement between the Southern agricultural sector and the Northern industrial sector, and viceversa, patently clear.

Agriculture is always the most sacrificed area in this type of negotiations. It came out of the Uruguay Round of the General Agreement on Tariffs and Trade (the WTO predecessor) frustrated, and was hoping for better treatment in the new round to start in 1999, said Brazilian rural leader, Pedro Camargo Neto.

“The FTAA could be a great opportunity for modernising the international agricultural market,” said Camargo, member of the International Counciel of Agriculture, Food and Trade Policy (IPC), which organised the seminar.

Camargo said was sure “a good agreement in the Americas would have strong influence in the WTO.”

The rural leaders of the Mercosur are hoping for an American hemisphere “declared free of subsidies of any kind and non tariff barriers.”

But Dean Kleckner, leader of the main organisation of US farmers, said the subsidies should not concern the Latin Americans.

“In ten year’s time there will be no more agricultural subsidies in the United States,” he said. The non-tariff barriers will only disappear in 20 year’s time, with the FTAA, he said, defending a slow gradual elimination.