The Americas This Week
U.S. Unlikely to Achieve its FTAA Objective in Miami

Laura Carlsen | November 14, 2003

“Americas This Week” is a weekly column written by Americas Program analysts. Reader responses and comments to this column and other Americas analysis should be sent to: americas@irc-online.org.

Just days remain before trade ministers meet in Miami November 20-21 to discuss the Free Trade Agreement of the Americas (FTAA). If anything's clear about the meeting, it's that the outlook is far from clear.

The 34 governments involved in forming the new bloc bring to Miami baggage from the failed World Trade Organization (WTO) ministerial held in Cancun just two months ago. Many developing countries blamed the collapse of the WTO talks on U.S. and European Union intransigence. The U.S., in turn, accused the developing countries of short-sightedness.

The WTO impasse ups the ante for the FTAA meeting. Subsequent talks have sharpened differences of opinion on the model of integration needed in the Western Hemisphere.

The U.S. negotiating team, led by U.S. Trade Representative Robert Zoellick, has shown little willingness to compromise in the interim. Zoellick has announced that the issues "lost" in Cancun will be aggressively pursued in the FTAA. These include a strong push for access to developing country markets and strict supra-national rules on government procurement, investment, and extending intellectual property protections.

Latin American governments want an FTAA that would work to assure open and predictable access to the vast U.S. market. But most show a strong reluctance to grant U.S. businesses the kind of extended rights and guarantees provided in the North American Free Trade Agreement (NAFTA)-the model for the U.S. FTAA proposal.

A loose-knit group, led by Brazil and Argentina and including several Caribbean nations, has argued for an FTAA "lite" that would leave many of the these issues out of the FTAA, to be dealt with in future WTO talks, bilateral agreements, or national and sub-regional forums.

Their opposition to the "comprehensive" agreement promoted by the USTR arises out of some very practical concerns. A few examples serve to illustrate:

• Agriculture in many Latin American and Caribbean countries has suffered as a result of free-market policies. Import surges could wipe out basic foods farmers and exacerbate hunger. The FTAA's combination of market access and a lack of controls on U.S. farm subsidies and dumping practices heightens fears in this area.
• Brazil produces generic versions of life-saving drugs, particularly for treatment of HIV-AIDS and wants to maintain this capacity to treat its own people, as well as to export to other countries suffering HIV-AIDS epidemics without potential for drug production. U.S. proposals to strengthen patent exclusivity would threaten this capacity.
• More than five million Mexicans and two million Central Americans now live in the United States. Citizen groups in those countries claim the FTAA would increase immigration while failing to decriminalize labor flows to the U.S. or recognize immigration as an integral part of regional integration.
• The NAFTA model in Mexico led to an increase in trade but also in inequality. Latin American countries facing high poverty and destabilizing extremes of wealth fear that the FTAA would accelerate concentration while limiting governments' ability to mediate polarizing tendencies.

Many Latin American countries also feel increased pressure from their own citizens to reject a NAFTA-like FTAA. The region is not the fertile ground for selling trade liberalization policies that it was in the past. Over two decades of disappointment, deepening poverty and striking inequality have soured the dream of attaining developed-country status exclusively through economic integration.

Signs that Latin America is rethinking integration abound. Bolivia's popular uprisings grew out of plans to privatize gas and water resources—an objective of the FTAA proposals for opening up investment and services. Twelve Latin American nations, including all South American countries except Uruguay and the region's largest economies, joined the Group of 21 in Cancun to oppose U.S.-E.U. positions. Brazil has since made a bid to consolidate its leadership in the G-21 by spearheading the alternative approach to integration in the FTAA.

U.S. trade negotiators underestimated developing country discontent in Cancun when they finessed a draft of the final declaration nearly identical to their original proposal. Developing countries simply walked out. The same could happen in Miami.

Cracks have opened up in the intent to form the world's third largest trade bloc. But rather than bowing to the principle of compromise in international negotiations, the USTR team seems bent on raising, rather than lowering, the stakes. In moving to Miami, they hope to isolate the remaining members of the Group of 21 and achieve many of the failed objectives of the WTO.

If they do, the WTO becomes largely irrelevant to countries already locked into an FTAA. These would be forced to take remaining issues, including dumping and U.S. agricultural subsidies, back to the WTO with no leverage for negotiating. This is why, despite the obvious difficulties, the Brazilian proposal prefers the multilateral organization for negotiating a larger package of issues.

And, as in Cancun, protests in the streets will serve as a reminder that the public too has a stake in these talks. While their governments parley, the anti-FTAA movement—both North and South—condemns the entire proposal as a testament to transnational business interests.

Talks hastily organized to avoid a Cancun scenario in Miami have revealed more differences than agreements. An October meeting in the Caribbean failed to break stalemates and recent Brazilian optimism that the U.S. had accepted an "opt-out" clause for controversial measures met with denials from U.S. officials. If the bracketed text (indicating lack of consensus) were removed from the FTAA draft, almost nothing would remain.

The many differences would seem to indicate a go-slow approach. To the contrary, the FTAA as envisioned by the U.S. attempts to go beyond rationalizing trade into new waters. It would force a profound realignment of power between government, business and civil society in nations where the equilibrium is already precarious. In this context, "winning" in Miami could mean losing in long-term efforts to build a stable and united hemisphere.

Laura Carlsen is director of the Americas Program (online at www.americaspolicy.org) of the Interhemispheric Resource Center (IRC, online at www.irc-online.org).

Published by the Americas Program at the Interhemispheric Resource Center (IRC, online at www.irc-online.org). ©2003. All rights reserved.

Recommended citation:
Laura Carlsen, "U.S. Unlikely to Achieve its FTAA Objective in Miami," Americas Program (Silver City, NM: Interhemispheric Resource Center, November 14, 2003).

Web location:
http://www.americaspolicy.org/columns/amprog/2003/0311carlsen-op-ed.html

Production information:
Writer: Laura Carlsen
Editor: Tom Barry, IRC
Layout: Tonya Cannariato, IRC