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Americas: FTAA Goes 'Lite' But U.S. Still Trade Heavyweight

by Emad MekayInter Press Service
November 21st, 2003

MIAMI - The scaled down plan given the nod at the end of a meeting here Thursday on a proposed pan-American common market marks a U.S. retreat on its ambitious trade policies in the western hemisphere but Washington's new aggressive push for bilateral deals could be a greater threat to the region's developing countries.

Trade ministers from the 34 Americas nations (minus Cuba) who assembled to forge ahead with the Free Trade Area of the Americas (FTAA) wrapped up talks one day ahead of schedule with a far less comprehensive draft agreement than originally envisioned -- now dubbed "FTAA lite".

When proposed in 1994, the FTAA was designed as a trading bloc that would encompass 800 million people and stretch from Alaska to the southern tip of South America, joining economies with a combined output of nearly 14 trillion dollars a year. The deadline for creating such a bloc is January 2005.

But analysts say the weeklong eighth ministerial meeting here barely managed to dodge a resounding collapse of the controversial talks that would have echoed September's breakdown of negotiations at the World Trade Organisation (WTO) in Cancun, Mexico.

In Miami, negotiators also tiptoed around dealing with controversial issues such as intellectual property rights, rules protecting foreign investment and government purchases.

The watered down blueprint for the trade area now allows member countries to pick and choose which obligations they will commit to rather than having to sign on to an all-embracing pact.

"The FTAA is in such a state of crisis that at the Miami Ministerial the U.S. was forced to choose between no FTAA and FTAA-lite," said Lori M. Wallach, director of Global Trade Watch for non-governmental organisation (NGO) Public Citizen.

"All that was agreed was to scale back the FTAA's scope and put all of the hard decisions to an undefined future venue so as to not make Miami the Waterloo of FTAA," she added in a statement Friday.

As officials from the office of the U.S. trade representative continued Friday to insist the meeting was a success, economists said its outcome will certainly exasperate anxious U.S. business executives who are pushing to open up Latin American markets to their products in a single strike, and buttress civil society groups and unions that opposed the deal from the onset.

"U.S. negotiators may try to put a happy face on the Miami talks, but the 'FTAA lite' deal will not please the big business lobby that has been the driving force behind the proposed trade pact," said Sarah Anderson of the Institute for Policy Studies in Washington.

"By allowing countries to opt out of obligations on investment and other contentious issues, U.S. negotiators have dashed the Fortune 500's hopes of gaining new investment opportunities and protections in Brazil, South America's largest economy," she added Friday.

But the National Association of Manufacturers, a powerful U.S. business group, was more upbeat. In a statement the association said Thursday's outcome avoided having "the door slam shut, and gives us a chance for what can still be a very high quality agreement''.

Critics of the proposed FTAA say it threatens public health, the environment and workers' rights by giving overwhelming powers to large corporations and by pushing a sell-off of essential public services like health care, education and water.

They also argue the agreement could force the less developed Latin American and Caribbean countries to accept provisions giving special rights to foreign investors, mostly from the United States and Canada, wishing to challenge domestic policies.

While forcing changes to the FTAA might be seen as a success by some developing countries, like Brazil, which oppose a sweeping one-size-fits-all agreement, this week's meeting also marked the official birth of a more forceful U.S. strategy of bilateral trade talks -- potentially more dangerous for the economies of developing nations.

In Miami, U.S. officials unveiled plans to hold talks with four Andean countries -- Colombia, Peru, Ecuador and Bolivia -- and with Panama and the Dominican Republic. Washington also said it would start talks with Uruguay over a bilateral investment treaty early next year.

"Unfortunately, the U.S. has violated the spirit of the ministerial declaration by undertaking a strategy of negotiating bilateral and mini-regional agreements containing exactly the horrific proposals on intellectual property, investment and other areas that the U.S. has failed to ram through in the FTAA," said Robert Weissman, co-director of Essential Action, a Washington-based organisation that campaigns for health rights, in a statement Friday.

Smaller countries negotiating deals with Washington will be left without the support and protection of informal blocs of like-minded nations, add many observers.

"Left to fend for themselves, many fear that small countries will be so much chum for the sharks," Eric Dannenmaier of the Tulane Institute for Environmental Law and Policy at Tulane Law School in New Orleans told media in Miami.

Yet, even with the spectre of bilateral agreements lurking over Miami, some activists attributed the shift in U.S. policy away from a comprehensive FTAA to campaigning by civil society groups and NGOs, many of which were here, either protesting on the streets or holding non-violent actions.

"The (U.S. President) Bush trade team has gone to plan B for bi-lateral, forced to abandon negotiation for the FTAA as a whole because of Latin American nations' opposition and the peoples' resistance across the hemisphere," said Sara DeSantis, an organic farmer and activist with

Wallach predicted that the future of the modified FTAA might not be any brighter than the original plan, as social movements in many FTAA-target countries are gaining strength. Those groups will also fight bilateral deals, she added.

There is a real possibility, Wallach said, that elections occurring before the FTAA deadline of Jan. 1, 2005 in several countries could add to the growing bloc of nations who will either have to represent their public's interests at the FTAA table or face electoral or governing crises.

"Our goal is to replace it (FTAA) altogether, not allow for its expansion either through a watered down FTAA or via bilaterals," she added.

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