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FTAA talks divide Latin American countries 2005-11-01

FTAA talks divide Latin American countries

MAR DEL PLATA, Argentina, Oct. 31 2005 (Xinhuanet) — The talks on a future Free Trade Area of the Americas (FTAA) have divided Latin American states into different interest groups prior to the 4th Summit of the Americas to be held in Argentina on Nov. 4-5.

The United States said it will seek to reactivate the FTAA talks during the coming summit, but it faces strong opposition from Brazil and Venezuela.

US Trade Secretary Carlos Gutierrez said on Oct. 28 that it is necessary for the governments of the Western Hemisphere to talk about free trade each time they meet.

Countries signing a free trade agreement (FTA) see a 0.6-percent economic growth every year from the putting into effect of the agreement, said Gutierrez.

Argentine diplomatic officials said it would be difficult to include the FTAA in the final declaration of the summit in Mar del Plata, 400 km south of Buenos Aires.

The majority view is that the document should address economic development, the creation of jobs and the fight against poverty, according to officials close to summit organizers.

The FTAA, originally expected to be created this year, has been delayed by serious disputes in the negotiations between the United States and Brazil, Argentina and Venezuela.

Brazil, the world’s most important food exporter, demands the US elimination of agricultural subsidies as a precondition for continuing the talks.

Venezuela’s opposition to the FTAA is more ideological than economic. Venezuelan President Hugo Chavez said on Oct. 30 that the FTAA "is already dead."

Venezuela does not compete for markets and only is a major oil exporter, with the United States being its most important customer.

Meanwhile, Argentina, which at first rejected the FTAA, has since modified its position and now claims that this agreement will boost its exports to 70 billion US dollars a year, nearly double the current 34 billion dollars.

In search for alternatives to the FTAA, Chile has become the second Latin American country, after Mexico, and the first South American nation, to reach an FTA agreement with the United States. The pact has come into effect this year.

Other South American countries like Ecuador, Colombia and Peru have also started FTA negotiations with Washington, in search for more trade with the superpower as part of their growth strategy. Bolivia is also considering to join the negotiations.

The Central American nations — Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua — and the Dominican Republic negotiated as a bloc over the FTA talks with the United States.

The governments of these countries regard the agreement as a step in the direction of the FTAA that will drive growth and increase investments in the region.

Secretary General of the Organization of American States Jose Miguel Insulza said the difficulties in reaching the FTAA agreement will not be solved in Mar del Plata.

If the FTAA were to come into effect today, it would group 34 countries of the continent. This means that all the states in the Americas, except Cuba, would be represented, with an economy of 13 trillion dollars and a population of 800 million.

The governments in favor of the FTAA see continental free trade as an impetus to the economic growth in their countries and a chance to bring millions of dollars in foreign direct investment and generate more and better jobs.

However, the Venezuelan president has said the FTAA would only expand the development gap in Latin America and proposed his so-called Bolivarian Alternative for America, which has received support in South America.

Chavez claimed that the FTAA’s neoliberalism will cause an increase of poverty in most Latin American countries. He even said Venezuela would "adjust" its relations with the Andean countries of Ecuador, Peru and Colombia if they sign a free trade agreement with the United States.

He said that in Argentina he will participate in demonstrations to protest against neoliberalism and the United States. "The FTAA will be buried by the people of the continent," he stated

Canada, the second richest country in the continent after the United States, has said it is interested in strengthening its relations with the Common Market of the South within the FTAA framework.

 source: Xinhua