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US-Andean FTA talks launched


ICTSD | BRIDGES Weekly Trade News Digest | 19 may 2004

From 18-19 May, representatives of three Andean nations — Peru, Ecuador and Colombia — met with US officials in Cartagena, Colombia for the first round of negotiations aimed at a US-Andean free trade agreement (FTA). The mood of the negotiations was reportedly positive, with both sides outlining the benefits of the accord.

Ready to move ahead

The head of the Peruvian trade team, Pablo de la Flor, indicated that his country was "sale a ganar," ready to win, stressing that the agreement with the US would represent real gains for the Andean bloc. Ecuadorian representative Cristian Espinosa and Colombia’s Hernando José Gómez echoed these sentiments. Negotiators from the Andean nations hope the accord will draw foreign investment needed to compete with other Latin American countries that have signed free trade accords with the US. In addition, they seek to extend existing trade accords — set to expire in 2006 — which allow them to export items such as fresh-cut flowers without tariffs. These accords have allowed the Colombian and Ecuadorian fresh-cut flower industry to corner about 90 percent of the US rose market. These trade concessions were originally put in place to help the countries fight against the illegal drug trade.

US building on past FTAs

"The US has been busy completing top-notch FTAs with our neighbours in the hemisphere, so we are delighted that the Andean countries want to work with us to remove barriers for our farmers, workers, exporters and businesses," remarked US Trade Representative Robert Zoellick. In addition to the benefit of increased access to 80 million consumers, US negotiators hope that the accord would build on momentum gained in Central America and the Caribbean, where the US recently concluded negotiations for a Central American Free Trade Agreement (see BRIDGES Weekly, 26 February). A US-Chile trade accord also entered into force earlier this year (see BRIDGES Weekly, 14 May 2003). Trade analysts noted that a US Andean FTA would pressure Brazil, one of Washington’s greatest obstacle to a Free Trade Area of the Americas, to concede in negotiations. "The hope would be that Brazil would worry about getting beaten out (by regional rivals) in the US," said Ed Gresser, Trade Director at the US-based Progressive Policy Institute.

Obstacles remain

Commentators have, however, also observed that obstacles remain on the road towards a US-Andean FTA. Due to the US Presidential race, analysts have expressed doubt that President Bush would publicly support the talks, as his rival Democratic candidate John Kerry has taken up the case of jobs moving overseas due to free trade agreements. Furthermore, intellectual property violations and security issues still stand in the way of investment in the Andean region. "I think that if you ask US companies, the biggest detriment to investment here is the insecurity of the judicial system," noted Francisco Fernandez, US Counsellor for Economic Affairs in Colombia. Medecins Sans Frontieres, on the other hand, presented a report in Peru calling on the governments of Peru, Colombia and Ecuador to exclude intellectual property from the negotiations. According to the report, new IP requirements might raise the cost of AIDS drugs by a factor of ten in these countries. Juana Ramos, Executive Director of Ecuador’s Association of Pharmaceutical Laboratories echoed such concerns, "We share MSF’s concern because of what we’ve seen in Chile and in Central America’s negotiations with the United States". Two thousand people also marched through Cartagena towards the conference centre where the negotiations took place, holding signs that read "Colombia is not for sale" and "No free trade deal".

The talks are scheduled to conclude in early 2005.

To access the MSF report see http://www.doctorswithoutborders.or...

"Hora cero para el TLC," PORTAFOLIO.COM, 18 May 2004; "Andean countries scramble for US free-trade pact," REUTERS, 12 May 2004; "US Free Trade Pact Puts Cheap Drugs at Risk-Lobby," REUTERS, 15 May 2004; "US-Andean FTA negotiations," USTR press release, 3 May 2004; "US, Andean Countries Hold Free Trade Talks," VOA NEWS, 18 May 2004; US kicks off Andean free trade talks, FORBES, 18 May 2004; "Clashes erupt as three Andean nations open free trade talks with US," AP, 18 May 2004.