USA changes strategy to wrap up hemispheric trade deal

Washington focuses on bilateral agreements with weakened Latin American countries as a way to get pass differences with Mercosur block (Argentina, Brazil, Uruguay and Paraguay). Both blocks will start bilateral negotiations on January.

Frustrated with the prospect of a watered-down Free Trade Area of the Americas deal, US officials are focusing on bilateral agreements with small and weakened countries in the Andes, Central America and the Caribbean as a way to get past differences with Mercosur, the South American largest trade block that includes Argentina Brazil, Uruguay and Paraguay. Negotiations take place in Miami, as part of the multilaterally agreed schedule to speed up world's largest trade deal by the end of 2005.

US main trade negotiator, Robert Zoellick, accepted that the Bush-led administration has pushed forward agreements with a group of small economies, as Ecuador, Colombia, Peru, Bolivia, and Central American nations. All of these countries suffer from weakened public institutions after years of internal conflicts and recurrent social crisis. US new policy tacitly confirms that it will be necessary to wait for new summits to create a Free Trade Area of the Americas among 34 countries in the Western Hemisphere.

US main goal was to agree with Mercosur a new timetable to wrap up the free trade area by the end of 2005. Such goal was partially achieved, as Mercosur and NAFTA will begin talks by January 2005. The United States and Brazil, which are jointly leading the talks, may have reached an understanding that would remove sensitive issues like agricultural subsidies and the protection of intellectual property from the talks in an effort to avert the type of collapse that took place two months ago at a World Trade Organization meeting in Cancъn, Mexico.


Common sense says the Free Trade Area of the Americas will be a reality sooner or later, as all governments across the hemisphere fuel the integration process. However, little has been discussed about feasibility of the deal and, what's more, the convenience of sealing such agreement between, the most powerful country of the world and 33 poor nations.

Notwithstanding, little has been explained on what really FTAA means and who benefits from the treaty. In practical terms, the FTAA is an extension of NAFTA to all Latin America from Guatemala (Mexico's South) to Argentina.

The program as it is today has five main characteristics. The main concept is Freedom of Trade, which means that all the countries would lift up limits to multilateral trading. Analysts consider that this will have a serious impact on Latin American economies, as they will be compelled to produce only agricultural products due to their lack of competition in manufactured goods.

Another key issue is the free access to national markets. It means that goods and capitals will be considered nationals in any country member of the agreement, no matter where do they come from. Therefore, local Governments won't be allowed to promote local industries and to benefit them on public purchases.
The freedom of trade includes basic services, such as health-care and education. It means that in those areas, the public sector will be entitled to act only in the same way as the private corporations do, to ensure fair competitive rules.

Additionally, national governments' decisions will be subject to a protective legislation on foreign investment. If one investor considers that a governmental regulation violates its interests, it can prosecute those authorities before an international court. Trade experts entitled to rule secretly would form such organism. This seriously affects the national sovereignty of the State, as it will be unauthorized to rule on the benefit of its population.

In the opinion of Tom Hayden, Former State Senator of California and a well-known anti-globalization activist, the FTAA is a "NAFTA expanded". "As NAFTA has failed in Mexico, driving up unemployment and finishing with country's middle class, there is no reason to think that the FTAA will succeed in the rest of the countries", he told PRAVDA.Ru.

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Author`s name Pavel Morozov