Bush plan that critics call ’NAFTA on steroids’ stalls
By Evelyn Iritani
Los Angeles Times
Sunday, November 21, 2004
President Bush’s goal for a free-trade zone encompassing the entire Western Hemisphere faces growing opposition in the United States and abroad.
The Free Trade Area of the Americas would lower tariffs and open up borders between 34 nations and 800 million people, creating the world’s largest free-trade zone.
U.S. equipment manufacturers, aerospace companies and computer makers would benefit from sharply reduced tariffs and increased intellectual property protections. Latin American businesses would get increased access to U.S. markets for their industrial goods and farm products. American consumers would gain from lower prices.
But Democrats and labor officials contend that Bush’s plan would encourage U.S. companies to relocate to places with less stringent laws, endangering American jobs and the environment. They have vowed to fight in Congress against it and other trade accords they find objectionable.
Some American farmers maintain that the FTAA would swamp the U.S. market with cheap Latin commodities without offering them equally lucrative opportunities to penetrate markets south of the border.
Voters in Uruguay, Ecuador and Chile recently elected leftist-leaning governments that are skeptical of a U.S.-led trade agenda.
"It’s going nowhere fast," Susan Aaronson, director of globalization studies at the University of North Carolina’s Keenan Institute, said of the FTAA.
A ministerial meeting of FTAA members, intended to put finishing details on the deal, was supposed to be held in Brazil this year. But it has not been scheduled, and the deadline to complete the agreement is just two months away. The accord would then need to be ratified by all member governments, including the U.S. Congress.
Frustrated Caribbean officials, whose trade-dependent nations would benefit from the market-opening measures, have sent letters to the U.S. and Brazil, co-chairs of the FTAA process, asking them to set a new negotiating schedule. U.S. officials acknowledge there is little chance of meeting the January deadline, but there have been no moves to reset the clock.
Critics of the FTAA are thrilled that what they call "NAFTA on steroids" has lost steam. The 10-year-old North American Free Trade Agreement, linking the U.S. with Canada and Mexico, was a model for the hemisphere-wide pact.
"The deadline is coming and going, and there ain’t going to be an FTAA," said Lori Wallach, director of Public Citizen’s Global Trade Watch, a leading opponent of the trade pact.
Bush administration officials insisted they were committed to moving forward with the FTAA, although at a slower pace. "Completing the talks by January 1 is obviously not realistic," said Richard Mills, a spokesman for the U.S. Trade Representative’s Office.
Their plan is to continue negotiating a global free-trade agreement through the World Trade Organization, while creating pressure for FTAA by knocking off smaller bilateral agreements. One with Chile is done. A Central American Free Trade Agreement has been negotiated. And the Andean countries and Panama are next in line.
The World Trade Organization effort and the individual pacts could provide a positive boost to the FTAA, Mills said.
Experts argue that the FTAA could be a powerful tool for improving America’s relations with Latin leaders who feel their concerns about perceived U.S. unilateralism, immigration and trade were sidelined after the Sept. 11 terrorist attacks in the U.S.
"There are few regions of the world where Bush is less popular" than Latin America, said Peter Hakim, president of the Inter-American Dialogue, a Washington think tank on Latin American affairs. "The judicious pursuit of free-trade arrangements in the region may be one way to begin to restore greater credibility."
That won’t be easy. Mark Ritchie, president of the Institute for Agriculture and Trade Policy in Minneapolis, said it was unclear whether Bush was willing to add a contentious trade agreement to his congressional agenda, already expected to face tough fights over tax reform and privatization of Social Security.
Democrats, labor leaders and religious groups are promising a big battle in Congress to defeat the Central American Free Trade Agreement, which they claim lacks adequate protections for workers and the environment. Its passage is seen as crucial to the FTAA’s future.
U.S. farmers, once among the most ardent proponents of trade expansion, have grown more skeptical in recent years as they have faced increased competition from Australian beef and Chilean fruit and continued barriers to U.S. farm goods in Japan and Europe.
The U.S. trade surplus in agriculture has shrunk to $2.5 billion this year from a record $27 billion in 1996, according to the American Sugar Alliance, an organization of sugar producers that strongly opposes the Central American and hemispheric deals. FTAA countries export 20 million tons of sugar a year, mostly from Brazil.
"We would be laid waste by Brazilian sugar exports if we opened our markets," said Jack Roney, an official with the sugar alliance.