Economy & Trade, Headlines, Latin America & the Caribbean

TRADE-AMERICAS: San Jose Declaration to Set FTAA Plan

Estrella Gutierrez

CARACAS, Mar 14 1998 (IPS) - Three years and three months of discussions will become reality next week, when the San Jose Declaration sets the legal and operational outline of negotiations for the Free Trade Area of the Americas (FTAA).

The trade bloc will be formally launched by the 34 governments involved in April.

One of the lead players in the FTAA preparatory phase, Venezuela’s Miguel Rodrigues Mendoza, gave IPS a preview of the declaration to be officially presented at the close of the meeting of American Trade Ministers in the capital of Costa Rica.

The San Jose Declaration was designed to fulfil the same role as the Punta del Este Declaration, which launched the Uruguay Round of trade negotiations in 1994.

The Uruguay Round laid the foundations of the World Trade Organisation (WTO) of today.

“It will make no showy claims, but will set the path and the plan for negotiations,” said Rodriguez, director of the Organisation of American States (OAS) Trade Unit, and will form the guidelines for the launch of negotiations during the Second Hemisphere Summit on April 18 and 19 in Santiago, Chile.

Rodriguez, former Venezuelan trade minister (1991-1994), explained that although some important factors, like the number of negotiating tables and the headquarters of the seven-year process, have still to be decided, an informal meeting in Miami began to tackle these issues this week.

But the ministerial declaration already has the four core elements ready: the principles which will rule the negotiations, the objectives in each of the areas, the structure of negotiations and how they will be brought about, and support mechanisms for the process.

The main negotiating principles are also four in number.

Firstly, all the nations of the continent will participate (except for Cuba, which was expelled from the OAS in 1961), and they will work on a consensus basis, with no one group able to impose a decision on any other.

Secondly, the negotiations must be “consistent with the WTO,” meaning all import and export tariffs must be eliminated within 10 years from the beginning of the process in absolutely all sectors.

Thirdly, the countries may participate either individually or as groups. Central America, the Andean Community, the English- speaking Caribbean Community and the Southern Cone Common Market (Mercosur) are all planning to act as blocs.

Meanwhile, the three nations of the North American Free Trade Agreement (NAFTA), Canada, Mexico and the United States, will act individually, as will Panama and the Dominican Republic.

And lastly, the negotiations must be “considered as a whole, meaning no element will be agreed until everything is agreed,” said Rodriguez.

Hence, as occurred with the Uruguay Round, each area will advance at its own, but nothing will be closed without global evaluation.

The possibility of negotiating in phases, as proposed by Mercosur was rejected by the others, causing a great dichotomy at the time, but this “is no longer an argument,” said Rodriguez, as “no one proposes it any more.”

What is being looked into is the joint design of measures to come into play by consensus before the end of the negotiations in 2005, the date set in the first Americas Summit in Miami, in December 1994.

One of the most important objectives in the frontier-free trade area from Alaska to Patagonia is that the FTAA “be a new, independent agreement which will coexist with other existing schemes, and not be the fruit of the amalgamation or adhesion to other agreements.”

“This is a radical change,” said Rodriguez, referring to previous proposals of an FTAA made up by other countries adhereing to the already existent NAFTA agreement, in case by case negotiations, or through the convergence of various agreements, as proposed by Mercosur.

This coexistence of various levels of agreement is important to blocs aiming for a common market. But in the cases like NAFTA itself, the Group of Three (Colombia, Mexico and Venezuela) or bilateral tariff-free zones like Canada and Chile, logic dictates they will be subsumed by the FTAA.

Another point is that specific objectives be established for each area of the negotiations, for example, a national treaty for each country on investments coming from other FTAA member States.

There is still polishing to be done here, but the framework has already been set, said Rodriguez.

In reality, the objective is for much more than a traditional free trade zone. It will include commitments on competition, investment, intellectual property and services, the first two of which are not even regulated by the WTO.

“In practice, it is of such breadth that it will establish a framework for the construction of hemisphere economic relations, and not only trade,” said the OAS official.

“In the form it is planned at present, the FTAA is a model free trade agreement and can be seen as Latin America’s contract with globalisation. Latin America can participate in the design of this and assure itself the process will be ordered,” he explained.

The Miami Commitment also states the negotiations “must have obtained concrete progress by 2000,” which means, as with the Uruguay Round, some complementary accords could be brought in during an evaluation meeting this year.

In fact, negotiators from several countries have commented Washington is hopign for a continent wide investment liberalisation agreement by the year 2000. Rodriguez said, if this is actually the case, the project will be technically easy and politically difficult.

The structure of the negotiations is the aspect which represents most problems only a few days before the process base document is to be signed.

There is consensus that the negotiations be managed by a negotiation committee, similar to the Uruguay Round process, with the Trade ministers having one or two meetings per year to evaluate the process and a technical secretariat to deal with logistics.

But the big difficulty is how to get the 12 prepareatory phase working groups to the negotiating tables, whether to join them in various combinations, reproduce them in an identical form or add new groups.

If the latter option were accepted, most countries support the idea of Mercosur establishing an agriculture table, but Canada and the United States oppose this.

Everything is clear on the institutional aspects, apart from where the negotiations will be held. Consensus has barely been reached on this being in one place, where the administrative secretariat will be based.

Rodriguez refused to comment on what would happen on this front, indicating the only clear aspect so far is that the seven cities proposed have all been objected to for one reason or another.

Central American diplomats in Caracas told IPS the natural site would be Miami, but there has been head-on confrontation on this score, apparently led by Mexico, as this is the capital of the state of Florida, which is particularly protectionist and entrenched against all schemes of liberalisation toward Latin America.

As a result, it has been suggested Costa Rica promote San Jose as at least temporary headquarters of the process, which would be a widely supported option. “Costa Rica has played an excellent role in us getting to where we are,” said Rodriguez.

He stated the preparatory phase of the FTAA negotiations which is now coming to an end, has been a silent process, “without much attraction for the front pages,” but above and beyond what happens now it has been “one of the richest experiences in terms of negotiations” for the region.

“Many came in because they could not stay out, but today the FTAA is a place where everyone participates and which can be catalogued as a true hemisphere process, where no one can impose thier own rhythm, even if they wanted to,” he concluded.

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