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Americas: Free-Trade Draft Exposes Rifts, Opportunities for Critics

by Tim ShorrockInter Press Service
July 6th, 2001

WASHINGTON -- The public release of the draft negotiating text for the Free Trade Agreement of the Americas (FTAA) underscores the wide gulf between the 34 countries involved in the talks while giving impetus to the citizens' movement to stop it.

The 434-page draft of the FTAA's nine chapters was published on the Internet Jul 3. The United States and other governments were fulfilling a promise, made at the April Summit of the Americas in Quebec City, to make the negotiation process more transparent.

US Trade Representative Robert Zoellick called the release "an unprecedented effort to make international trade and its economic and social benefits more understandable to the public."

The chapters drafted by the negotiating teams, however, are full of bracketed sentences and paragraphs that describe contradictory proposals without identifying the governments that offered them.

"This text represents the contribution of all the countries involved," Ruben Barbosa, Brazil's ambassador to the United States, told IPS. "Our proposals are there. Everything we need is there. But is it going to be approved? That's not known."

"It's like reading a detective novel," said John Cavanagh, director of the Washington-based Institute for Policy Studies and an opponent of the FTAA. "Over 50 percent of it is in brackets, but they don't tell you who those brackets represent."

The text reflects negotiating positions in nine areas: market access; agriculture; investment; services; intellectual property rights; government procurement; antidumping and countervailing duties; competition policy; and dispute settlement.

Citizen groups opposed to the FTAA have been clamoring for the full negotiating texts for months. They stepped up their demands in June, after the FTAA's draft chapter on investment was leaked and published by the Institute for Agriculture and Trade Policy.

"We'd been expecting this since the governments made their commitment in Quebec," said Kristin Dawkins, vice president for international programmes at the non-governmental institute.

Like other trade specialists, she hadn't fully digested the entire document, which was released on the eve of the annual US independence day holiday. But based on a cursory reading of the chapter on intellectual property, Dawkins said the FTAA countries have a long way to go before reaching an agreement by their self-imposed 2005 deadline. "The IPR chapter shows that a lively debate will be forthcoming," she said.

Steve Porter, an FTAA critic at the Center for International Environmental Law, said the brackets designating disagreements are "pretty normal for this stage of a negotiation."

But Porter was troubled by the absence of references to input from civil society. "There's no provision for any citizen participation or mechanisms like NAFTA has for the environment and labour," he said, referring to the side agreements to the North American Free Trade Agreement. "So there are some big missing pieces."

On the other hand, "its disturbing to see the NAFTA model for Chapter 11 cut and pasted into" the chapter on investment, Porter said. Under this controversial section, corporations would be allowed to sue governments for adopting social policies that conflict with investor rights. Concerns about Chapter 11 and corporate lawsuits against local governments fueled the successful opposition in 1998 to a proposed Multilateral Agreement on Investments.

The key to a successful FTAA negotiation, Ambassador Barbosa said, lies not in the FTAA's draft proposals but in the bill set to emerge from the US Congress when it takes up President George W. Bush's request for trade promotion authority (TPA), also known as 'fast-track', so he can open negotiations on the FTAA and several other pending trade deals.

Many Democrats, however, are pressing to include provisions that would require US negotiators to demand protections of worker rights and the environment in any future trade agreements. In addition, the Bush administration and many lawmakers insist that the United States must not change its anti-dumping policies, which penalise countries that export for less than production costs, as a price for free trade agreements.

If labour and environmental language appears in TPA and the US anti-dumping stance does not change, Brazil would have a hard time continuing the FTAA negotiations, Barbosa said. "We're concerned with any linkage to sanctions on labour or the environment," he said. "If TPA includes a reference to sanctions, as far as Brazil is concerned that would be a non-starter."

The US anti-dumping rules are used primarily to protect the domestic steel industry.

Barbosa said Bush's recent decision to investigate steel imports underscores the importance of that industry for US trade negotiators. "This was an expression of protectionism," he said. "If applied to semi-finished steel, it could affect us tremendously."

As the fourth largest economy in the hemisphere after the United States, Canada and Mexico, Brazil has much to gain - and a lot to lose - in the FTAA. For that reason, it wants subsidies, anti- dumping rules and other important issues addressed in the FTAA.

"We can't accept these areas waiting for negotiations in the WTO," the ambassador said, referring to the World Trade Organisation. "The only thing we don't want is NAFTA-less and GATT-plus. We have to be coherent. Anything short of what Mexico and Canada have achieved will be difficult to accept." GATT was the General Agreement on Tariffs and Trade, the WTO's predecessor.

Brazil's position, said Cavanagh, will be critical to the outcome of the FTAA talks. He said the FTAA is "eminently defeatable" if citizen groups join with governments in opposing the agreement, as they did during the 1999 ministerial meeting of the WTO.

"The key to government opposition are the Brazilians," he said. To join the FTAA and allow unimpeded access to its market, Brazil would have to reduce protections and tariffs in important industries like orange juice and sugar, while the United States would have to give up its anti-dumping provisions in return.

"That is the big drama at the government level: who will give up their protections?" Cavanagh said. "Each government has a hard sell."

But at the citizen level, Cavanagh added, the FTAA draft is a non-starter because it reproduces the worst parts of NAFTA, such as the investment chapter, while adding none of its good aspects, such as the labour and environmental side agreements.

"The FTAA draft is as step back," he said. "It will create the same unified opposition of citizen groups that opposed NAFTA, plus some."

Press officers with the US Trade Representative did not return telephone calls seeking comment for this story.

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