Many obstacles ahead for resumption of FTAA talks

MercoPress, Tuesday, 04 January 2005

Many obstacles ahead for resumption of FTAA talks

This month negotiations for the creation of a Free Trade Association of the Americas, FTAA, encompassing the 34 countries of the hemisphere (with the exception of Cuba) should have successfully finalized but strong objections from United States and Mercosur cut the dialogue short last April.

However co-presidents of FTAA, Peter Allgeier from the US and Adhemar Bahadian from Brazil have been in contact since the end of the US presidential elections and are planning a meeting for the end of the month.

Mercosur objections to farm produce restrictions by Washington and the growing political sensitivity in the US Congress over the loss of jobs overseas helped to thwart negotiations.

“We’re ambitious, we want access to markets, essentially for farm produce”, said the Argentine Commerce Secretary Alfredo Chiarada who anticipated the “revitalization” of FTAA talks this year, “the idea is to have them over this year or in 2006”.

US Trade Representative Robert Zoellick, has a Congressional mandate to negotiate the FTAA agreement until mid 2005, but analysts believe President George Bush has sufficient support in Congress for a further two year extension.

“Why should talks advance this year if they failed last year?”

“That’s a question for the Bush administration. We’ll have FTAA if the opening markets proposal from them is correct and they show willingness to keep negotiations advancing”, argued Mr. Chiarada.

“FTAA must ensure access for farm produce, industrial goods and services. We must have clear rules in other fields but we must be realistic and flexible. We have limits to foreign investments, government purchasing and intellectual property and the US insists with farm subsidies”, admitted Argentina’s Commerce Secretary adding that “we’re committed to FTAA but we must have incentives which satisfy Argentine exporters”.

Brazilian Foreign Affairs Minister Celso Amorim indicated that Brazil “never opposed FTAA”, but when bureaucracy is involved, “usually fundamentalism from both sides emerges”.

But some Brazilian analysts are not so enthusiastic: “next year President Lula da Silva will be running for re-election, and this is a limiting factor”.

In November 2003 in Miami and given the insurmountable hurdles the 34 countries agreed to a framework treaty, with not much content or “light” agreement, which would be complemented with deeper bilateral negotiations.

“Our challenge will be to turn the Miami mandate into specific negotiations”, said a spokesperson for Mr. Zoellick.

But in spite of the expected Bush administration pressure to reach an agreement “it will not be easy to break the resistance of the Argentina-Brazil axis”.

Besides President Kirchner will be facing crucial legislative elections next October particularly in Buenos Aires province if he effectively wants to cut loose from his political mentor, the all powerful and former president Eduardo Duhalde.

Furthermore US Trade Representative and head of FTAA negotiations Robert B. Zoellick, has become one of the favourite candidates to replace next June James Wolfensohn as president of the World Bank, a multilateral institution the Bush administration is determined to reform.

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source: MercoPress