U.S. Plans To Squeeze FTAA Opponents

by Emad Mekay

Trade ministers from 34 countries will meet in Miami for the eighth ministerial meeting of the Free Trade Area of the Americas (FTAA), a pan-American deal that would create the largest trading bloc in the world stretching from Canada to Argentina -- with the notable exception of Cuba -- by January 2005.

But the meeting is seen on the road to an impasse as the United States and Brazil, co-chairs of the current round of talks, lock horns over the scope of the negotiations.

Brazil, on behalf of some South American countries, wants to exclude areas such as copyright and patent protection, investment and government procurement and leave them for broader global trade talks under the auspices of the World Trade Organization (WTO).

The United States refuses to discuss agriculture subsidies, which South American countries say are depressing crop prices and creating unfair competition with U.S. farming companies.

U.S. farmers also oppose talks aimed to reduce domestic subsidies within the FTAA because they complain that would not oblige other competitors from developed countries like the European Union (EU) and Japan to make similar cuts.

Similar disagreements brought global trade talks to a resounding halt in Cancun, Mexico in September, when 21 developing countries banded together to protest rich nations' failure to drop their hefty agricultural subsidies. The talks eventually collapsed.

Fearing a re-run of the Cancun episode in Miami, and under pressure from U.S. corporations, Washington has recently sought to modify its tactics without budging on its original demands.

The United States now appears more aggressive and threatening as it seeks to isolate the opposing camp in Latin America by forging bilateral trade agreements.

Last week, Peru said that U.S. Trade Representative (USTR) Robert Zoellick would announce in Miami the start of bilateral free-trade talks between the two countries, while Colombia also said it will announce similar talks with Washington soon.

Several businessmen and business associations in the United States are reporting that Washington's attempts to sign bilateral trade deals with other countries in Latin America is bearing fruit, and that deals with Ecuador, Panama and Bolivia will also be announced in Miami.

Washington is currently negotiating a U.S.-Central American Free Trade Agreement (CAFTA) with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

On Aug. 4, the administration notified Congress it intends to also initiate negotiations with a sixth nation, the Dominican Republic, and to seek to integrate it into the CAFTA.

On Sept. 3, President George W. Bush signed into law a free trade agreement with Chile, the first such deal with a South American country. Chile joined Mexico and Canada as the U.S.' hemispheric free trade partners.

"The strategy is all about how to corner Brazil to make them feel they will be isolated if they don't go along with the kind of FTAA that the U.S. government wants," said Sarah Anderson a fellow at the Institute for Policy Studies in Washington.

"That's because I think they see Brazil as really the crown jewel of the Americas."

With the largest economy in South America and a population of nearly 180 million people, Brazil has staunchly protected its economy, retaining more restrictions on foreign investments than most other Latin American nations.

Its government wants trade concessions from Washington in exchange for supporting some parts of the FTAA.

"Brazil is the place the U.S. companies really want opened up," Anderson said in an interview. "All of this talk about bilateral agreements ... is really about cornering Brazil. That's what they are after. They don't care about having a bilateral with (a small country like) Panama, for example."

Rick Rowden, policy director of ActionAid USA, told IPS that Washington was adopting a country-by-country approach because the FTAA has become so big it threatens to generate a huge backlash both at home and in South American countries.

Essential Action Co-director Robert Weissman called the U.S. piecemeal strategy alarming.

"The (Latin) countries enter these negotiations with no capacity or no political strategy to extract anything from the U.S. except for very minor market access concessions, and with near desperation ... they claim success just by virtue of having negotiated an agreement with the U.S," he said in an interview.

But isolating Brazil is not the only new U.S. tactic. Earlier this month, Zoellick called for a "mini-ministerial" meeting to try to reduce opposition to the deal ahead of Miami.

The meeting was criticized for ignoring Venezuela, a major country in South America that has previously voiced concerns about the deal, while inviting nations that appeared receptive of the U.S. position, like Chile, Colombia and Trinidad and Tobago.

Zoellick has also tried to enlist the backing of the influential Latino U.S. business community, many of whose members have strong business ties in their countries of origin.

Last week, the U.S. official held a meeting for Latino businessmen in the White House to launch the Latino Coalition for Free Trade, a group expected to lobby for the FTAA in South America.

More than one hundred prominent Latino businessmen and community leaders from across the United States attended.

"The future of our hemisphere depends on the strength of our commitment to free markets, economic opportunity and democracy," Zoellick told them.

Critics also say U.S. negotiators are resorting to so-called trade "capacity building," training or funding for officials in partner nations that often results in indoctrinating the officials in U.S. trade policies, making them more readily adaptable to a new trade regime.

Critics say that kind of training puts the rules of agreements like the FTAA or the North America Free Trade Agreement (NAFTA) above local decision and policy making.

"That's the problem that we are faced with -- the lack of any possibility of developing real policies that are rooted in the needs of the people in terms of their democratic rights," said Tony Clarke of the Ottawa-based Polaris Institute in an interview.

"It's a change in the way in which governance occurs because every time a major social or environmental public policy or program is put forward, it must be put through that test to see whether it is NAFTA proof -- or FTAA-proof."