TRADE-AMERICAS: FTAA – Clear Goal, Circuitous Route

By IPS Correspondents Reprint | | Print |

Analysis Gustavo González

SANTIAGO, Apr 10 2001 (IPS) - The road to Jan 1, 2006, the target date for the Free Trade Area of the Americas (FTAA) to enter into force, promises to be a tortuous one, with the greatest difficulties coming from the United States, the creator of this bi- continental beast.

At the third Summit of the Americas, to take place Apr 20-22 in Quebec City Canada, the presidents of 34 of the 35 nations of the Americas – Cuba being the notable exception – are expected to sign the accord reached last weekend in Buenos Aires by their ministers entrusted with foreign trade matters.

The timeline drawn up by the ministers sets January 2005 as the deadline to finalise FTAA negotiations so that the remainder of the year is left for the hemisphere’s parliaments to ratify the treaty, which covers the economies of the Americas “from Alaska to Tierra del Fuego.”

The United States and Canada, the two industrialised nations of the pact, were in favour of accelerating the negotiations in order to wrap up by 2003, based on a motion by Chile. The majority of Latin American and Caribbean ministers meeting in the Argentine capital ultimately voted it down.

As generally seems to occur in these cases, in the end there were neither winners nor losers. Chile’s Foreign Minister, Soledad Alvear, as well as US Trade Representative, Robert Zoellick, stated they were satisfied with the resolution on deadlines approved in Buenos Aires.

In fact, all that was really accomplished was the confirmation of the negotiating timeframe agreed at the second Summit of the Americas, April 1998 in Santiago, and already suggested by then- president of the United States, Bill Clinton, at the first gathering of the region’s presidents in Miami in December 1994.

The novelty of the agreement reached last weekend lies in the proposal to achieve activation of the FTAA “as soon as possible, no later than December 2005,” which in reality does not depend on the presidents to meet in Quebec, but on the legislative branches of 34 countries.

At first glance, the parliamentary ratification of the FTAA treaty within the course of 2005 seems to be a viable objective for all nations involved, except the United States, where congressional proceedings generally are more complicated than in the rest of the Americas.

US President George W. Bush has proposed convening a legislative trade agenda with both houses of Congress, according to Zoellick, with sights set on putting the so-called “fast- track” issue on the table by the end of this year.

Fast-track, which Zoellick has renamed “trade-promotion authority,” is an accelerated process through which complicated trade accords brought to Congress for ratification cannot be amended. US lawmakers would only be able to vote yes or no on the entire trade package.

Thanks to fast-track authority granted to former president George Bush, the current US president’s father, Mexico was able to join the North American Free Trade Agreement (NAFTA), alongside Canada and the United States. That treaty took effect Jan 1, 1994.

Clinton later invited Chile to join NAFTA, but the addition of the South American nation did not materialise because Congress denied him fast-track authority to negotiate the transaction in 1995.

The 250-page draft of the FTAA negotiating text is plagued with brackets marking the points that do not have the consensus of the 34 countries. The document’s complexity makes it unthinkable that Bush could win legislative approval of the treaty if he does not obtain fast-track powers now.

The problems do not just involve the timeline, but also intricate games of political, economic, labour, social and environmental interests, common to all trade talks, but which in the US case are even more complex.

The principal challenge for the FTAA treaty is to achieve equality in talks that are characterised by the asymmetry among the 34 parties, such as wealthy Canada in contrast to impoverished Haiti, or the United States with some 270 million people compared to St. Kitts-Nevis, with just 42,000.

The deadline question played out at the Buenos Aires ministerial meeting against a background of debate on equal access to markets, criss-crossed by issues of tariff and non-tariff barrier and provisions on labour and environmental protections.

The ministers agreed that all of these matters have a place on the negotiating table, but they progressed no further than establishing general criteria with respect to rejecting protectionism and trade sanctions, without entering into the substance of the numerous disputes between Washington and Latin America.

The US newspaper The Wall Street Journal said Monday that the anti-dumping laws, which are intended to punish disloyal competition practices, are quite popular among US legislators and that their inclusion in FTAA talks would spark protests in that country’s Congress.

But the same article acknowledges that Latin America – especially Brazil, Chile and Mexico – will not accept an FTAA treaty that leaves aside this sensitive matter.

The economy-focused daily points to another controversial point in what are known as “rules of origin.” The US-based transnational corporations will seek, through the treaty negotiations, to convince Latin American markets to open their doors to products manufactured in third-party countries, outside the Americas.

These sticking points, in addition to the predicted pressures on the US Congress by labour unions and environmental groups, indicate a sure-win wager that Bush will have to fight with vigour and skill to obtain fast-track negotiating powers.

As such, it would be easy to imagine a scenario for December 2005 in which the FTAA treaty has been ratified by all the parliaments of the two continents with the exception of the United States.

In Buenos Aires last weekend, the ministers agreed to create a technical commission on FTAA institutional matters.

One of the commission’s mandates is to establish the minimum ratifications necessary for the hemispheric treaty to enter into force. But in this matter, as in other regional questions, though the 34 countries involved are equal, the United States is “more equal” than the rest.