Trade accord stalled as Americas meeting ends

New York Times, November 6, 2005

Trade Accord Stalled as Americas Meeting Ends

By LARRY ROHTER

MAR DEL PLATA, Argentina, Nov. 5 - A two-day summit meeting of leaders of 34 Western Hemisphere nations attended by President Bush was drawing to a close here on Saturday without a clear agreement on when and how to resume stalled talks aimed at achieving a hemispherewide free trade agreement.

Mr. Bush had hoped to persuade his counterparts from Latin America and the Caribbean to deliver a resounding endorsement of the plan, the Free Trade Area of the Americas. But suspicions of American intentions prevailed in the end, and the final communiqué , originally scheduled to be issued early in the afternoon, seemed likely to fall short of that ambitious goal, if an official declaration were to be made at all.

Because of the deadlock, the negotiations continued Saturday afternoon, three hours past their scheduled close, and forced the cancellation of a final lunch for the leaders. When the group took a 15-minute break, President Bush left for his flight to Brasília. White House officials said he had left to keep to his original timetable, which called for him to meet there on Sunday with the Brazilian president, Luiz Inácio Lula da Silva.

"Reaching a consensus in a body of this size is sometimes a difficult task," a senior administration official said after the president had departed. "We’d like to see the continuation of the free trade talks, and 29 countries have indicated their support for moving ahead."

American presidents of each party have long pushed for a hemispheric free trade zone. Ronald Reagan talked of a single market extending from Alaska to Tierra del Fuego; Bill Clinton formally broached the idea at the First Summit of the Americas in Miami in 1994.

A Free Trade Area of the Americas would be larger than the European Union, though without its free flow of labor and political integration. Benefits for the United States as the dominant economic power in the hemisphere are obvious: with no more tariffs and other barriers that inhibit entry of American goods and services, American exports to the region would boom.

But momentum has stalled, partly because the United States and Latin America are awaiting the outcome of trade talks at the Doha Round of the World Trade Organization, which will establish certain global rules any regional accord must respect. So the Bush administration has turned to smaller bilateral and regional agreements, like the Central American Free Trade Area, but came here hoping to get a commitment to resuming negotiations early next year.

"The reason why trade is so vital is because, particularly when addressing poverty, grants and loans pale in comparison to the amount of good that can be done as commerce develops at all levels of government, at all levels of society," Mr. Bush told a group of reporters from Latin American publications this week.

But Latin America has never spoken with one voice on free trade. Many layers of doubt and dissent are on display here, and the situation may have been worsened by Washington’s insistence on an agreement.

On the left are those, led by Venezuela’s fiery, populist president, Hugo Chávez, who oppose free trade in any form. Mr. Chávez calls the Free Trade Area of the Americas "an annexationist plan" that would stifle or destroy local industry, roll back social safety nets and labor protections and permanently extend American political domination of the region to the economic realm.

"We have to bury F.T.A.A." because it is the latest manifestation of "an old project of the imperial eagle that from the beginning has wanted to sink its claws" into Latin America, Mr. Chávez said Friday at a rally here of 25,000 people, who chanted anti-Bush and anti-Free Trade Area of the Americas slogans. "It is part of the capitalist model, directed from Washington, that has beaten down our peoples for so long."

In contrast, Brazil and Argentina, the leaders of the Mercosur bloc, the third-largest trading group in the world, do not oppose the concept of free trade, only Washington’s version. The Mercosur group, which includes Paraguay and Uruguay, was founded in 1991 to eliminate trade barriers among its members, but also aims to achieve political integration. It covers an area with a population of nearly 250 million and produces more than $1 trillion annually in goods and services.

As large exporters of foodstuffs, Mercosur wants the Bush administration to end billions in subsidies to American agriculture, in return for Latin American concessions on intellectual property rights, financial regulation and market access.

"We are here neither to bury F.T.A.A. nor to resuscitate it," but to see "what are the advantages," Brazil’s foreign minister, Celso Amorim, said. "We have no prejudice against trade integration, but we don’t want to put something on paper just because it looks nice."

Some other countries with dynamic economies that have free trade pacts with the United States, like Mexico and Chile, have been trying to ease their neighbors’ worries, by emphasizing the benefits of liberalized trade for exports, investment and employment. On Friday, President Vicente Fox of Mexico criticized Argentina’s president, Néstor Kirchner, saying he "must do more to save this conference," and suggesting creation of a regional trade accord with 29 members instead of 34, leaving out Mercosur and Venezuela.

"Anyone who blocks an accord like this is certainly looking out for their own interests and not the interests of others," Mr. Fox said.

But President Ricardo Lagos of Chile said the United States needed to be more flexible. "It is very difficult to promote free trade accords when you have this kind of problem, in which the asymmetry favors those who have more and not those who have less," he said.

Brazil, which shares the presidency of the Free Trade Area of the Americas negotiations with the United States, maintains that no hemispheric trade agreement can be meaningful without the participation of its fellow Mercosur partners.

Argentina’s stand is complicated by the resentment and mistrust from the economic collapse four years ago. Argentina contends that it was abandoned by the United States in its time of crisis, and that has colored Mr. Kirchner’s dealings with the Bush administration.

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source: New York Times