TRADE-LATIN AMERICA: Awaiting Clinton’s Signals on FTAA

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Nov 14 1997 (IPS) - Latin America is waiting for US President Bill Clinton to issue some signal on the future of the negotiations on the Free Trade Area of the Americas (FTAA), following his failure to win ‘fast-track’ authority to negotiate new trade agreements.

The goal of hemispheric free trade arose from the December 1994 Summit of the Americas in Miami, organised by the Organisation of American States (OAS), which has been running the preparatory phase of negotiations.

Miguel Rodriguez, who is coordinating the preparatory talks, told IPS by telephone from OAS headquarters in Washington that Clinton “will have to explain himself shortly” on what strategy he will take with respect to the FTAA, in the wake of his defeat in Congress.

After Clinton was forced to withdraw his fast-track bill Monday in the face of certain defeat, the scenario “is very complicated,” said the OAS official, who pointed to the uncertainty now hanging over the plans to formally launch FTAA negotiations at the second Summit of the Americas in April in Chile.

“It is true that the negotiations can technically get underway even though the US government has failed to secure ‘fast-track’,” said Rodriguez.

Fast-track authority gives presidents the power to negotiate new trade accords which cannot be amended by Congress when submitted for ratification. Under fast-track rules, trade agreements are subject only to a yes-or-no vote by both houses of Congress within 60 days of their formal submission.

But although Clinton’s defeat does not make negotiations impossible, a host of questions have cropped up as to future reactions on either side of the Rio Grande, said the former Venezuelan trade minister.

One of the questions is whether Washington will continue stepping on the accelerator towards the liberalisation of trade, now that the fast-track episode demonstrated that the United States is highly divided with respect to its trade policy, “with a majority expressing themselves against” free trade, he added.

That fact is a major constraint on the US model of open markets, and affects the perceptions of the other 33 members of the OAS involved in the preparatory negotiations aimed at hemispheric free trade in the year 2005, according to Rodriguez.

Clinton’s future strategy is also unclear, because to stay on a course “rejected by the legislators of his own party can have a very high political cost,” a cost that can only grow in 1998, a year of congressional elections.

The question then – said Rodriguez – is if the Clinton administration does not shift direction, is Latin America and the Caribbean “prepared to go ahead with the project, in spite of the split demonstrated by US society, lobbyists and power-brokers?”

The OAS official pointed out that no one is more keen than Clinton on defining future trade policy without further delay.

Rodriguez believes, however, that although “times have changed, the process will continue, but at a slower pace.”

Analysts in Washington, meanwhile, say Clinton has shown that he “grows in the face of failure” and resolves problems that he previously handled poorly, meaning a change of scenario by April cannot be ruled out.

Another element that must be considered, say political observers, is that after Clinton’s embarassing defeat at the hands of his own Democratic Party, the president and his party will have to find a way to meet again, on new ground.

The president withdrew the fast-track bill he had submitted in September, in the face of evidence that he would be unable to muster sufficient votes among Democratic lawmakers to push the bill through the House of Representatives.

Analysts say Clinton committed serious errors in his bid for fast-track, including delaying submission of the bill and basing his efforts on an open alliance with the Republican Party against Democratic legislators.

In the United States, Republicans are more in favour of open markets than the Democratic Party and its powerful labour and environmental constituencies. Moreover, observers say, Clinton annoyed his party by throwing himself into the arms of the Republicans without first making a serious attempt to garner Democratic support.

Without full negotiating authority, the United States would have a hard time imposing its aim to focus first and foremost on the lifting of tariffs in FTAA talks, in the face of resistance by the fast-growing Southern Cone Common Market (Mercosur) – Argentina, Brazil, Paraguay and Uruguay – which links 200 million consumers.

Mercosur wants an agenda that outlines a step-by-step negotiating process. But Rodriguez said that “in practice – and this was the experience of the Uruguayan Round of global negotiations – the stages naturally occur. The question is whether or not they are agreed on” beforehand.

He predicted that even in a worst case scenario formal discussions would begin in April, because otherwise the Santiago Summit would be left “hollow”.

Furthermore, the 34 countries involved in the process have made a huge investment in technical and political efforts in the three years of preparatory negotiations, and the progress made and the momentum acquired by the 12 working groups cannot be curbed, he added.

At any rate, no one has proposed altering the timetable nor the calendar of intensive technical efforts laid out for the period leading up to the Santiago Summit, said Rodriguez.

He maintained that Latin America has already drawn benefits from the FTAA process, which has given a boost to sub-regional integration efforts due to the region’s need to consolidate its negotiating position with respect to the United States, and collectively strengthen itself before trade barriers begin to be knocked down.

The region must not lose those benefits, Rodriguez underlined, even if the initiative towards free trade gets stuck on the “slow- track.”