TRADE-AMERICAS: FTAA in the Slow Lane without Fast-Track

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Feb 17 1998 (IPS) - Formal negotiations on a future Free Trade Area of the Americas (FTAA) will be launched in April, but amidst the uncertainty brought by the U.S. administration’s limited negotiating ability, the OAS and SELA said in Venezuela.

The secretary-general of the Organisation of American States (OAS), Colombia’s Cesar Gaviria, said that the fact that the government of Bill Clinton would come to the Apr. 18-19 hemispheric summit in Santiago without “fast-track” negotiating authority would not hinder the start of formal talks.

But regardless of the widespread confidence that the U.S. government will obtain fast-track within the next few years of negotiations, Clinton’s failure to do so at this point will throw a shadow over the start of what are already complex negotiations, Gaviria admitted.

Meanwhile, the Latin American Economic System (SELA) – a regional body comprised of 27 Latin American and Caribbean members – released a report Monday on the current state of the preparatory phase of FTAA negotiations.

The report says the FTAA talks are at “a difficult and unusual juncture,” and “will be shrouded in uncertainty” if – as expected – Clinton goes to Chile without fast-track.

SELA adds that the financial crisis in Asia, which it says will undoubtedly trigger a fresh surge of protectionist sentiment in the United States, is a further obstacle towards fast-track.

Gaviria was in Caracas this week to inaugurate an OAS meeting on how to foster transparency in election campaigns.

Although deputy trade ministers from the Americas meeting last week in San Jose failed to reach consensus on key aspects of the FTAA negotiations, Gaviria pointed out to reporters here that a Mar. 18-19 ministerial-level meeting would also be held in Costa Rica to discuss important questions such as the matters to be included in the negotiations.

Since the first hemispheric summit decided in December 1994 in Miami that a tariff-free zone stretching from Alaska to Tierra del Fuego was to be created by the year 2005, the OAS has been in charge of organising the preliminary negotiations and meetings.

In its report, “U.S. Options in the Face of the FTAA”, SELA says that even though the United States will be able to participate in the negotiations if Clinton fails to obtain fast- track authority by April, it will have “an ambiguous internal mandate.”

The report was the first released by SELA since its Caracas headquarters was totally destroyed by two fires 10 days ago. The permanent secretary of SELA, Argentina’s Carlos Moneta, said the document demonstrated that in spite of the emergency, the regional forum would remain “a stanchion for the reaching of collective positions by Latin America and the Caribbean.”

SELA points out the paradox that after much hesitation and doubts, Latin America and the Caribbean finally look ready to set out on formal talks towards an FTAA, while the government that pushed the hardest for negotiations on continent-wide free trade in the first place, the region’s foremost economic power, appears to have been weakened by its inability to obtain fast-track.

The SELA report details the elements leading up to Clinton’s failure last year to secure fast-track authority, which allows the president to negotiate trade accords without worrying that they could later be amended in Congress. Under fast-track rules, trade agreements are subject only to a yes-or-no vote by both houses within 90 days of their formal submission.

According to SELA, the trouble over fast-track is a consequence of the instability of U.S. policy since 1994, the last year in which the executive and legislative branches were controlled by the same party.

The two branches stopped cooperating on trade matters, and Clinton failed to come up with a compromise deal that would satisfy the necessary number of both Democratic and Republican lawmakers to guarantee success for his quest for fast-track.

The SELA officials in charge of closely monitoring U.S. policy doubt that Clinton will secure fast-track this year, either before or after the Santiago summit. They point out that it would be difficult for the U.S. administration to reach a consensus between Democrats and Republicans in a year of legislative elections.

In fact, says the report, U.S. policy will be tinged with a campaign climate until the first year of the coming century. Leaders of both parties are already heavily involved in the struggle for nomination to the presidential elections of the year 2000, which will affect their cooperation with Clinton, the experts add.

Furthermore, U.S. opponents of free trade will use fears of a flood of Asian products, given the efforts of troubled economies from that region to stage a recovery through an aggressive export offensive, to further their agenda, SELA predicts.

The regional body expresses its doubts over the possibility of another bid for fast-track by Clinton. But, it adds, if he tries again and fails, he will have “a battery” of already existing trade accords with the region, which do not depend on further legislative ratification.

Clinton will also be able to fall back on a special authority granted him by Congress in 1994 for global trade negotiations conducted up to 1995. The tariff reduction he could achieve with that instrument would be limited, however.

But, the report warns, it would not be advisable for accords negotiated in the wake of the Santiago summit to be submitted to ordinary approval by the U.S. Congress. That would require a two- thirds majority in the Senate, which could introduce amendments and prolong the process indefinitely.