LATAM-TRADE: US Lack of Fast-Track – from Crisis to Opportunity

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Mar 16 1998 (IPS) - The fact that the US government will show up at the launching of the negotiations for a Free Trade Area of the Americas (FTAA) without fast-track negotiating authority, initially seen with dismay in Latin America, is beginning to be interpreted as an opportunity for the region.

This week, the capital of Costa Rica will host a round of meetings to conclude Thursday with a ministerial-level declaration that will provide a legal and operative framework for the negotiations that heads of state from the entire American continent will formally launch Apr. 19 in Santiago, Chile.

When US President Bill Clinton failed in his bid to secure fast- track authority in November, some Latin American entities and experts in trade even gave the FTAA initiative up for dead.

(Under fast-track rules, trade agreements are subject only to a simple yes-or-no vote in Congress, with no possibiity of amendment, within 60 days of their formal submission).

But today observers and participants in the three year-long preparatory phase for a free trade area stretching from Patagonia to Alaska by the year 2015 are starting to interpret Washington’s reduced maneuvering capacity as an advantage for the region.

One of them is Miguel Rodriguez, the head of the trade division of the Organisation of American States (OAS), within whose framework the idea of the FTAA initially arose in December 1994, and in which negotiations will formally get underway at the second Summit of the Americas in Santiago.

On a stop in Caracas on his way to San Jose, where he will participate in the conclusion of the preliminary talks, Rodriguez told IPS that “the end result differs radically from the initial pessimistic view” regarding fast-track.

In the light of the new situation, Latin American and Caribbean nations have begun to see the FTAA “as something in their own interests,” rather than something they were “dragged into by Washington.

“Several countries were taking part in the process without wanting to, seeing it as something inevitable that they could not be left out of,” said the former Venezuelan trade minister.

But that has changed, he added, because it has become more clear that it will be “a long process” which – if the timeframes laid out at the first Summit of the Americas in Miami are followed – will last seven years, and in which, above all, “no country can impose its own pace.

“Today it can be said without fear of committing an error something that was not clear just a few months ago: this is a hemispheric process, a hemispheric initiative, in which everyone is participating, and with respect to which everyone feels they must be prepared, because it is inevitable.

“In short, today the FTAA is not the United States,” added Rodriguez, one of the coordinators of the preliminary phase of talks, which opened in Miami in 1994 and will come to a close in Santiago.

He added that without the United States, there would be no FTAA, but rather “something different.”

But the reality for everyone, including Washington, is that an FTAA is desired “both to the south and the north of the United States,” which was partly made clear by the Clinton administration’s failure to obtain fast-track, Rodriguez said.

Actually, the main strategic role played by North America throughout the entire preparatory phase has been played by Canada, he maintained: “From the word go, it has been Canada that has understood, taken up and motorised the FTAA.”

From an operational point of view, the US government does not need fast-track to start the negotiations, but to conclude them. The Ronald Reagan administration, for example, did not have fast- track authority when the Uruguayan Round of trade talks began in 1986.

But there is a big difference between the Reagan era and the present: back then there was a clear consensus in Washington on the trade policy to be followed.

Today, meanwhile, there is a major split between the government and Congress as well as within Congress, the political parties and among key social players. “Behind fast-track, the big internal debate is the US role in the global economy,” said the OAS official.

Another aspect in which the region’s perception of the route from Miami through San Jose to Santiago has changed, especially in the past few months, is the fear that the United States would “swallow” the rest of the markets through the FTAA.

“It is an enormous challenge. It will force the region to improve its level of competitiveness and prepare itself for competing, within a few years, in equal conditions with one of the world’s most competitive countries – but one which will definitely not eat us up,” argued Rodriguez.

The FTAA will not only encompass goods, but will also regulate services, intellectual property, investment and policies on competition – the last two of which go beyond the scope of the World Trade Organisation.

The programme to be signed by the presidents in April will project a complete opening of trade 10 years after the end of the talks, scheduled for 2005. But far-reaching guidelines and regulations will already go into effect that year.

Rodriguez admitted that there would be areas in which competition would be impossible. But, he added, the preparatory phase demonstrated that “there are many niches of competitiveness,” and countries and products which have already won, in the worst possible conditions, the battle for making inroads into the big northern market.

The OAS official said the stage coming to a close this week had been one of the region’s most “enriching” experiences, which had permitted each country to clearly assess its situation with respect to each area of negotiation and draw up strategies.

The preparatory phase was based on 12 working groups which met at least three times a year, while deputy ministers gathered twice a year and ministers once. Some 600 experts from the 34 member countries of the OAS – from which only Cuba is excluded – participated in the preliminary talks.

If that process had not taken place in the intensive, orderly, systematic and participative manner in which it did, Clinton’s failure to secure fast-track could have toppled the whole project, said Rodriguez. “But by then, the FTAA was already an investment in which many had staked a great deal,” he added.

The negotiations for the FTAA will be Latin America and the Caribbean’s “contract with globalisation,” which will ensure that globalisation in the region will be “orderly rather than savage,” Rodriguez concluded.