TRADE-AMERICAS: Discord Mars Meeting to Lay FTAA Groundwork

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Apr 5 2001 (IPS) - Foreign trade ministers from 34 nations of North and South America are gathering in the Argentine capital this weekend to discuss the foundations upon which the Free Trade Area of the Americas (FTAA) is to be erected, but opinion differences indicate it will be rough going.

The thousand-page draft text, which has been under the scrutiny of the FTAA Trade Negotiations Committee since Monday, contains an average, so far, of one disputed paragraph per page, which portends difficulties in achieving consensus this Friday and Saturday.

But ministers from throughout the hemisphere have expressed their determination to define the bases of an agreement for the approval of North and South American presidents at the summit to be held in Quebec City, Canada, April 20-22.

The Summit of the Americas, to convene the member-nations of the Organisation of American States (OAS), is the third such event, following the 1994 summit in Miami and the Santiago summit in 1998, both of which failed to produce notable progress in the trade arena.

Negotiators are debating matters such as tariffs and non-tariff barriers, agricultural subsidies, intellectual property rights, measures to prevent disloyal competition, questions of government procurement, dispute resolution mechanisms, and the difficulties presented by the region’s varying degrees of economic development.

Meanwhile, Economy ministers gathered Tuesday in Toronto, Canada, where some suggested policy positions that are likely to lead to heated controversy, and revealed new alignments in the region with respect to FTAA.

Uruguay’s Economy Minister, Alberto Bensión, warned that his country would seek a direct trade treaty with the United States if Mercosur (Southern Common Market – comprised of Argentina, Brazil, Paraguay and Uruguay) fails to reach a bilateral accord with the northern giant soon.

Bensión was alluding to resistance within Mercosur to accelerate negotiations for the creation of the FTAA.

Uruguay’s stance is similar to that of Chile, an associate member of Mercosur, which has already begun talks for a bilateral free trade agreement with the United States, and is pressing to finalise FTAA by 2003, instead of the original goal of 2005.

The United States and Canada were the initial promoters of pushing up the deadline to launch the FTAA, which is to cover a market of nearly 800 million inhabitants with a combined gross domestic product (GDP) equivalent to a third of the world’s production.

For its part, Brazil is heading the opposition against accelerating the process, asserting that it would be damaging to Latin American interests.

The meeting between Brazil’s President Fernando Henrique Cardoso and his US counterpart George W. Bush, held last week in Washington, did not prove capable of resolving their differences.

Cardoso insists that in Latin America, and in Brazil in particular, more time is needed in order to adapt industries to competition with US-based companies, and to achieve a commitment from Washington for greater Latin American access to US markets.

Brazil already has a hard time selling steel, footwear, textiles and orange juice in the United States.

The Cardoso government is hoping that Mercosur will back it in these discussions, but on the eve of the meeting of ministers, the unity of the bloc is apparently quite fragile. Uruguay has stated that its commitment to its partners is relative and Argentina maintains an ambiguous stance, though tending slightly towards Brazil.

Officials in Buenos Aires, who had demonstrated interest in following Chile’s footsteps toward bilateral negotiations with the United States, confirmed that Argentina would remain within the Mercosur fold after Brasilia voiced its frustration with the bloc.

Nevertheless, Argentine diplomats do not hide their confidence that the FTAA “will reduce the country’s external vulnerability, accelerate economic growth, attract investment and create employment,” as Foreign Minister Adalberto Rodríguez Giavarini stated last month.

This position has been upheld by Argentina’s new Economy Minister, Domingo Cavallo, who sparked Brazil’s ire not only when he decreed unilateral changes in foreign tariffs, but also when he said that if Washington were to offer a bilateral accord, “it would be difficult to resist.”

The advantages for the United States in speeding up the FTAA timeline are numerous. Some analysts point out that Washington needs to reaffirm its zone of influence at a time when the US economy is showing signs of weakness.

Robert Zoelick, the principal US negotiator, stated before his country’s Congress last month that Latin America is going through a period of “fatigue” in relation to neoliberal economic reforms, and that the FTAA would help breathe new life into the region.

The Bush government, of the conservative Republican Party, seeks to differentiate itself from the previous administration under Bill Clinton, of the Democratic Party, especially in the area of foreign trade.

Bush hopes to do so by achieving substantial progress in FTAA talks and a relaunching of global trade negotiations under the World Trade Organisation (WTO).

To achieve these objectives, the US president must obtain “fast-track” authority from Congress to negotiate and sign trade agreements, leaving the legislative body with only a limited say in the accords.

But experts believe that resistance from Democratic lawmakers and even a faction of the Republican bloc will mean Bush will arrive in Quebec without that important tool in hand, one the president has been demanding since he took office last Jan 20.

So far, the countries that seem most enthusiastic about the formalisation of the FTAA are Canada, Costa Rica, Chile, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, United States and Uruguay.

Those that would apparently accept the accord with resignation, under current circumstances, include Argentina, Brazil and Venezuela.

President Cardoso and Venezuela’s President Hugo Chávez agreed earlier this week in Brasilia to maintain a united stance in resistance to accelerating the FTAA talks.

In exchange, Cardoso promised Chávez that he would seek authorisation for Venezuela to participate as a visitor in the next Mercosur summit, to be held in Asunción.

Chávez indicated that he intends to approach Mercosur unilaterally, given the slowness of negotiations between the Southern Cone bloc and the Andean Community of Nations, made up of Bolivia, Colombia, Ecuador, Peru and Venezuela.

Business leaders, unionists and representatives from other sectors, such as the women’s movement, are preparing their own events and meetings in parallel with the Buenos Aires ministerial conference in an attempt to disseminate their opinions and positions, which apparently will not be included in official FTAA documents.

The opinions of business leaders from North and South America, who will also meet Thursday and Friday in the Argentine capital, show a series of sharp divisions, based on the level of development each economic sector is likely to achieve under the hemispheric trade accord.

For their part, labour unions from Argentina and Brazil have expressed strong resistance to the FTAA because they believe it would lead to more widespread unemployment, job insecurity, environmental harm and company closings.

The labour unionists, who have criticised the secrecy surrounding the meetings leading up to the ministerial conference, plan to express their discontent with the trade talks in a series of rallies and protests in Buenos Aires, to be staged outside the conference site and the hotels in which the officials are staying.