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REPORTS: TRADE - AMERICAS |
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FTAA
Well on Its Way, Despite Rhetoric to
the Contrary
Diego Cevallos
MEXICO CITY, (IPS) - While
Brazil is leading the rhetoric on the
need for South America to negotiate
the Free Trade Area of the Americas (FTAA)
as a bloc, which could convince
Washington to make a few concessions,
the countries have actually already
reached agreement on 80 percent of the
draft accord.
Since the last round of FTAA
negotiations got under way in March,
Brazilian President Luiz Inácio Lula
da Silva has made frequent references
to the future free trade area, and to
the agreements he is seeking with
Brazil’s South American neighbours.
Brazil’s strategy is to intensify
the pressure on the United States,
because the moment has arrived to
finalise agreements on touchy areas
over which there are discrepancies,
like the freeing up of trade in
agriculture and the timetables and
targets for phasing out tariffs, Germán
de la Reza, an expert on integration
issues, told IPS.
The negotiators from the 34 nations
– all of the countries in the
Americas with the exception of Cuba
– that will form part of the FTAA
are working out the final details on
the continent-wide free trade
agreement that is to go into effect by
late 2005.
According to the Mexican Action
Network Against Free Trade (RMALC),
which groups 16 civil society groups
from Mexico and forms part of the
Americas-wide movement against the
FTAA, Brazil’s proposals are aimed
at bringing about a shift in the
direction of the free trade project,
which emerged, on Washington’s
initiative, over a decade ago.
However, a Mexican government official
who is taking part in the negotiations
and asked not to be named, told IPS
that while the Brazilian government
talks about the need for South America
to negotiate the FTAA as a bloc, its
representatives continue to act on
their own.
That has not changed, said the source,
during the final phase of talks, which
was launched in the city of Puebla,
near Mexico City, in March.
In fact, negotiating on a
country-by-country basis was one of
the aspects agreed by the governments,
as stated in the official FTAA
document “Methods and Modalities for
Negotiations”, approved on Oct. 18,
2002.
According to the timetable, which has
so far been complied with without
major delays, Jul. 15 is the deadline
for each country to present its
improved proposals on market access,
the area that encompasses the most
sensitive questions, on which reaching
agreement has been most difficult.
After that, there will be an
open-ended phase in which the
countries are to reach a final
agreement on market access.
That “will be one of the most
difficult and crucial phases,” but
it will also be the last one, because
agreement has already been reached on
80 percent of the FTAA accord, said de
la Reza.
Besides the liberalisation of trade in
agriculture and the timeframes for
phasing out import duties, the last
points of the negotiations include
services, investment and government
procurements.
Brazil and its Mercosur (Southern
Common Market) partners in South
America are pressing the United States
to cut its farm subsidies.
But Washington wants to transfer that
debate to the World Trade Organisation
(WTO), under the argument that it
cannot reduce its subsidies – it
subsidises 23 percent of its farm
sector – as long as the European
Union and Japan continue to subsidise
40 and 60 percent, respectively, of
their agriculture.
That is the touchiest issue, said de
la Reza, who predicted, however, that
agreement would be reached in the rest
of the areas under negotiation, even
if that means the talks take a bit
longer than planned.
The deadline for concluding the
negotiations is early 2005, but that
could be extended if a consensus is
not reached by then, said the
director-general for Europe and the
FTAA in Mexico’s Secretariat for the
Economy, José Luna.
But even if the timeframe is extended,
the spirit of the accord would not be
modified, he said, since neither
Brazil nor any other country has
actually challenged it.
Parallel to the FTAA talks, Brazil has
spearheaded a move to strengthen the
Mercosur (Southern Common Market), of
which it has formed part since 1991
along with Argentina, Paraguay and
Uruguay, and to move towards a
bloc-to-bloc agreement with South
America’s other major trade bloc,
the Andean Community, which links
Colombia, Bolivia, Ecuador, Peru and
Venezuela, said de la Reza.
But that will not be to the detriment
of the FTAA, said the analyst, a
professor of postgraduate studies on
integration at several Mexican
universities.
The non-governmental organisations
waging the continent-wide campaign
against the FTAA say it is a modern
version of neo-colonialism, a campaign
designed by Washington to strengthen
its dominion over the rest of the
Americas.
Héctor Cueva, with RMALC, said many
of the groups in the umbrella
organisation hope Brazil will lead the
struggle against the FTAA.
The anti-FTAA activists complain that
the negotiations have failed to take
into account civil society as well as
the poorest countries and their local
industries, which will be hurt by the
opening up of trade, because they will
be unable to compete with the large
U.S.-based transnational corporations.
But the questions of civil society and
of the smallest and poorest nations
and their companies have actually been
discussed in the FTAA talks, even
though it is not clear what results
will come of that.
The participating governments agreed
to receive proposals on participation
by civil society in the FTAA from June
2002 to June 2003. Over the course of
that year, 37 submissions were
received, 28 of which came from the
United States.
With respect to the smaller economies,
a draft of the Hemispheric Cooperation
Programme is currently under
negotiation, which will outline the
supports to be given to the countries
facing the greatest difficulties in
integrating themselves and competing
in the FTAA.
But the anonymous source consulted by
IPS said the participating governments
would not put much priority on that
document, and that the Hemispheric
Cooperation Program would be “pure
rhetoric.”
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