FTAA NEGOTIATIONS ENCOUNTER HURDLES

From 3-6 February, high-level government officials met in Puebla, Mexico to continue negotiations for finishing the 34-nation Free Trade Agreement of the Americas (FTAA) by its January 2005 deadline. No framework for moving negotiations forward was agreed upon, and trade officials decided to "suspend" the meeting and to reconvene in Puebla in the first week of March for new discussions. Market access, agriculture, investment and services were among issues still remaining unresolved.

Mercosur/G-14 differences

During the talks, five negotiating proposals were on the table. The proposals of the Group of 14 (led by the US, Mexico, Canada, Chile and Costa Rica) and of the Mercosur bloc (led by Brazil and Argentina) were most hotly debated. The G-14 countries wanted certain products to be granted temporary trade protection. US officials insisted that the farm topic be negotiated within the WTO, and asked for significant strengthening of protections for copyrights and patents. However, a participant at the talks noted that, "the Group of 14 has lowered its ambition in market access and in agriculture and in everything [to reach a compromise]".

For its part, Mercosur pushed for a neutralisation of "trade distorting" effects of domestic agricultural price supports and export credits from the US and Canada, and requested a total opening of markets and the elimination of all tariffs on the continent, while "countries like the United States and Canada are asking for exclusions," according to Argentine Trade Secretary Martin Redrado. Mercosur also demanded measures such as compensatory tariffs to protect their markets from the price effects of domestic US farm payments. To reach a compromise, they reportedly offered to allow tariff or quota protections for about ten percent of goods, dropped demands for an end to all farm subsidies and proposed a 15-year phase out of tariffs on all products in later stages of negotiations. Redrado said there would be no FTAA without an agreement on agriculture, requiring the US to abandon most farm subsidies. One trade source criticised the Mercosur proposal as having "lowered ambitions everywhere but in market access and in agriculture, where it is very ambitious".

After the collapse of WTO talks in Mexico last fall, the November FTAA meeting in Miami agreed on an outline for an accord dubbed "FTAA Lite," which involves a two-tiered approach to negotiations (see BRIDGES Weekly, 26 November 2003). Instead of drafting a single high-level agreement covering all nine areas of the negotiation -- including agriculture, manufactured and consumer goods, services, investment, government procurement and copyright protections -- all 34 countries would agree on a "balanced and common set of rights and obligations," which all parties would take. In addition, countries wishing to do more in some areas would negotiate separate pacts to do so. According to one US official, there was disagreement over procedures for the plurilateral negotiations under the "second tier" (higher set of obligations). Although the group has reached an agreement on basic procedures, areas that remain ambiguous include observer rights and degree of flexibility to newcomers in existing plurilaterals. The impasse during these talks led to fears that the pact might become what critics called an "FTAA Ultra-Lite," an agreement lacking in substance. Despite the absence of a deal at the meeting, negotiators decided to continue to aim at their 2005 deadline for the FTAA. They also agreed that smaller, less-developed countries would need special assistance to complete the pact.

G-14 plurilateral talks

US trade officials said on Saturday that they planned to negotiate a high-level trade agreement with 13 other countries in the Americas, hoping Brazil and other members of Mercosur would offer more concessions in the FTAA talks. This plurilateral agreement would include Canada, the US, Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, the Dominican Republic, Colombia, Ecuador, Peru and Chile. In a teleconference, a US trade official stated that the plurilateral agreement would cover, at a minimum, market access, services, government procurement and investment.

Opponents of FTAA state their case

The FTAA meeting was accompanied by a number of protests. Over a thousand people from throughout the Americas also gathered in Havana, Cuba from 26-29 January for the Third Hemispheric Meeting to Fight against the FTAA. Participants represented organisations ranging from social protest and lobby groups to trade unions and student organisations. Speaking at the Havana meeting, Cuban President Fidel Castro stressed that the growing foreign debt of "semi-colonial" countries now surpasses USD 2.5 trillion, including USD 750 billion in Latin America, and noted that the FTAA may exacerbate the situation. Cuba has not been included in the FTAA negotiations. Many delegates lauded the approach taken at the FTAA talks by Brazil and Argentina. Noting that the left is making progress in Latin America, they felt that the demands that Brazil and Argentina are making were in the interests of the poor. A final declaration and "action plan" of the conference included a call for a series of anti-FTAA protests and forums leading up to the next round of negotiations.

ICTSD reporting; "FTAA talks in Mexico Stall over US Farm Subsidies," DOW JONES, 5 February 2004; "Mexico FTAA talks hit bumps in race for Jan accord," REUTERS, 4 February 2004; "Mexico trade talks at impasse on access, subsidies," REUTERS, 5 February 2004; "Havana conference opposes FTAA pact," THE MILITANT, 4 February 2004.