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2014 Media Kit
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Americas trade pact faces challenge despite Geneva push

By: | at 08:00 PM | Channel(s): International Trade  

Flagging international trade talks got a welcome jolt over the weekend in Geneva - but probably not enough to push stalled negotiations for a Free Trade Area of the Americas into a high gear and finish on time.

That’s because the new blueprint by negotiators at the World Trade Organization to break an impasse between rich and poor countries over agricultural protectionism - one of the main thorns plaguing the FTAA initiative - is short on details and long on potential pitfalls.

“You can kind of go back to thinking that maybe (FTAA) is not fully dead,” said Mario Marconini, a trade analyst in Rio de Janeiro at the Brazilian Center for International Relations.

But he noted that the vague nature of the WTO blueprint, reached after five days of marathon negotiations in Switzerland, heralds tough global talks next year in which countries can still descend into “controversy and disputes and not agree on anything” as they try to fill in the holes.

In the first major advance in nearly three years of stumbling international trade talks, the US and European Union agreed to cut by 20% the subsidies that most harm trading partners and eliminate export subsidies in return for lower industrial tariffs and more open trade in services.

Yet even Pascal Lamy, the EU trade commissioner, termed the draft text a halfway point to a full deal as WTO negotiators abandoned an earlier goal to wrap up the current round of global talks by the end of this year.

That makes it less likely that FTAA negotiators - who have been looking to the WTO for direction and momentum - can ink a regional deal by their own target date of January 2005.

A spokesman at Brazil’s Foreign Ministry said it was still “too early” to speculate on what kind of an impact this breakthrough at the WTO would have on the FTAA negotiations.

But Brazil, which is supposed to host the next meeting of trade ministers in the FTAA talks, has yet to set a date after discussions aimed at knocking down trade barriers from the Yukon to Patagonia ground to a halt in February.

Washington, which is co-chairing the FTAA talks, is also non-committal on prospects for a regional accord even as US Trade Representative Robert Zoellick praised the WTO advance as “a crucial step” for global trade.

“FTAA is a negotiation among 34 participants, so it’s hard to predict how this will impact the negotiations,” Richard Mills, a USTR spokesman, said.

He acknowledged, though, that the January 2005 target date for cementing an FTAA deal - first agreed upon a decade ago - is “a challenge because of the calendar.”

The US wants Latin American countries to beef up intellectual property rights and investment rules while opening up the services sector and government procurement contracts to greater cross-border competition. Commodities-rich South America primarily wants to see the US scale back its import barriers when it comes to agriculture.

Robin Rosenberg, a trade specialist at the University of Miami, thinks the movement on agriculture and other issues at the WTO “is going to give new impetus” to countries such as Brazil and the US as they attempt to bridge differences on the regional level.

Still, given all the remaining differences, it’s “highly unlikely they can get (an FTAA) ministerial together before the end of the year,” he added.

Brazil is heading into municipal elections in October and US voters will cast ballots for president in November, further complicating negotiating efforts.

In the meantime, the US has been focusing on wrapping up less controversial bilateral pacts with smaller countries. Zoellick and his counterpart in the Dominican Republic signed a recently concluded free trade deal on Aug. 5 before shipping it to lawmakers for approval.

Mercosur, the South American trade bloc led by Brazil and Argentina, appears more eager to reach agreement with the EU on a free trade deal this year. The two blocs will meet again later this month in Brasilia to try and stick to an October deadline for a deal.

Aaron Cosbe