What’s Happening With The FTAA Negotiations?

Commentary

By Odeen Ishmael

Special To HBN

Hardbeatnews, NEW YORK, N.Y., Fri. Mar. 18, 2005: Ever since the Free Trade Agreement of the Americas talks reached a deadlock early last year, the Brazilian and American co-chairs of the Trade Negotiation Committee tried unsuccessfully on three occasions to restart the process.

But the stalemate has continued over conflicting positions as to how the FTAA should be shaped, all of which have resulted in a lack of consensus building on controversial issues.

Some countries, notably Brazil and the Caricom countries, argue that issues such as agricultural subsidies and dispute settlement should be handled in the FTAA negotiations and not within the WTO, as some others, particularly the USA, prefer.

At the same time, there are major differences between Brazil and the United States - regarded as the largest economies - on crucial FTAA issues. For example, Brazil wants to exclude from the FTAA talks issues on investment, services, government procurement, and intellectual property.

Brazil has traditionally resisted going beyond WTO commitments in these areas. On the other hand, the United States desires to discuss investment, services, government procurement, and intellectual property within the FTAA, while insisting that domestic agricultural subsidies and anti-dumping should be dealt with by the WTO.

In a major initiative, the co-chairs of the TNC, Ambassador Adhemar Bahadian of Brazil and Acting U.S. Trade Representative Peter Allgeier, held consultations on February 22-23 in Washington, D.C. on how to advance the negotiations. According to a brief statement they issued, the meeting centred on discussions among FTAA countries following the failed TNC meeting in Puebla, Mexico, in February 2004.

They added that their meeting made progress and that before they meet again on March 29-30, they would consult informally with the other countries.

There is now guarded optimism that they will make a breakthrough at the upcoming month-end meeting, leading to the reconvening of the FTAA negotiations at least by May. But as time stretches on, it remains doubtful that the negotiators will be able to reach final agreement to formally establish the free trade area before the end of 2005.

In the meantime, President Silva’s chief of staff, Jose Dirceu, met with US Secretary of State Condoleezza Rice in Washington on March 3, in a further effort to iron out the controversial issues surrounding the stalled FTAA negotiations.

Details about what was discussed by the co-chairs are seeping out slowly. It is understood that they made significant progress on market access concerns in the contentious area of agriculture. At previous TNC meetings, Brazil, a major agricultural producer and exporter, consistently argued for the elimination of export subsidies and made proposals for addressing domestic price supports. Rumours persist in diplomatic circles that the two sides agreed on different speeds of integration, which would allow them to exclude contentious issues such as intellectual property rights and US agricultural issues from a final FTAA agreement.

Despite these rumours, there is indication that the co-chairs were not very successful in reaching an agreement on the problematic issue of intellectual property. This was hinted by Ambassador Bahadian who told the media on 24 February that intellectual property continued to be a most difficult issue in the FTAA negotiations.

Will Cuba influence the process?

Meanwhile, a new dimension has developed in the FTAA scenario. An Associated Press report on March 2 revealed that during the recent swearing in of the new Uruguayan President Tabare Vasquez, Cuba asked to become an associate member of Mercosur. For Cuba to be accepted, the full members - Brazil, Argentina, Uruguay and Paraguay - have to agree by consensus. Other associate members are Bolivia, Chile, Peru, Ecuador, Colombia and Venezuela. Both Guyana and Suriname are also considering seeking associate membership as well.

If Cuba is accepted as an associate member of Mercosur, it can present complications for the US in the FTAA talks. The US and the other 33 members of the proposed FTAA have never considered Cuba as part of the process initiated and propelled by the Summit of the Americas. But by becoming an associate member of Mercosur, Cuba, at least indirectly, may have some influence in how the FTAA is finally formulated. And with Venezuela’s interest in upgrading its current own associate membership of Mercosur to full membership, Cuba, as its close political ally, can be drawn even closer into the process.

In recent years, the leftist governments in Brazil and Venezuela have expanded their trade and political ties with Cuba. Cuban trade itself with the Mercosur group remains small, but it has doubled ever since President Lula da Silva came to power in Brazil. And Argentina’s left-leaning President Nestor Kirchner, like Silva, also opposes the US embargo on Cuba and supports increased trade with Cuba.

Actually, over the years hemispheric political leaders have privately talked about “advantages” of including Cuba in the FTAA. Certainly, with Cuba being a trade partner of every country in the Americas - including some states of the USA - many of them wonder why Cuba, with a large viable market of 10 million people, should be excluded from the trade pact. Trade relations should not be hampered by ideology and political systems, and if democracy is a qualification, many now question why Haiti is still included in the FTAA process.

In the FTAA negotiations, the trend is for positions to be articulated by the various economic groupings formed by geo-economic blocs. Caricom speaks with a single voice through its Regional Negotiating Machinery, and more recently the Central American group has been moving in that direction. This trend is also being picked up by the ALADE and Mercosur groups, even though some of the countries belonging to those groups continue to express their individual positions on particular issues. Significantly, late last year Mercosur and ALADE formalised a cooperation agreement, so it is expected that they may put forward some common positions in FTAA talks.

However, it must be borne in mind that Venezuela has expressed strong reservations on the present formulation of the FTAA and is propagating its own free trade proposal, the Bolivarian Alternative for Latin America (ALBA), which includes Cuba but excludes the United States. So far, only Cuba, at the bilateral level, has expressed support for this proposal.

But with this new twist introduced by Cuba’s interest in Mercosur, some FTAA watchers believe that the move at this time is deliberate. They are positive that it presents the Mercosur bloc with a “bargaining chip” in nudging the USA to concede on some crucial issues in the negotiations when they eventually resume. And with Venezuela questioning the current formulation of the FTAA, interesting free-trade negotiations certainly lie ahead.

EDITOR’S NOTE: The writer is Guyana’s Ambassador to Venezuela. - - Hardbeatnews.com