Bridges Weekly Trade News Digest • Volume 7 • Number 33 • 8th October 2003

FTAA: US-Brazil Standoff Dims Prospects For Miami Ministerial

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The vice-ministers of the 34 countries of the Western hemisphere seeking to create a Free Trade Area of the Americas (FTAA) met for a Trade Negotiations Committee (TNC) meeting in Port-of-Spain, Trinidad and Tobago, from 30 September to 3 October. Delegates arrived with different sets of priorities, and left without making much progress in bridging positions. The meeting failed to conclude a draft plan for wrapping up negotiations by January 2005, which was to be adopted by ministers in Miami at the next Ministerial to be held in Miami from 20- 21 November. In the words of Eric Farnsworth, vice president at the Council of the Americas business group, "there is a fundamental disagreement about the structure of the FTAA. If the fundamental view of what an FTAA should look like is different, then you’ve got a problem". He added that "the prospects [for success at Miami] at this point are less likely than Cancun, but that’s not to say it won’t happen". According to some observers, the hostile atmosphere at the Port-of-Spain meeting was similar to that of the collapsed WTO Ministerial in Cancun from 10-14 September.

The countries co-chairing the meeting, the US and Brazil, in particular came out pitted against one another. Relations between the two countries had taken a blow already at Cancun. The US blamed a group of 20 developing countries, and Brazil in particular, for intransigence and thus the failure of that meeting. Further, while the US is pushing for a comprehensive FTAA agreement, Brazil prefers keeping services, investment and intellectual copyrights — all key issues to the US — out of the FTAA. On the other hand, the US has said it wants to negotiate agriculture — the key area of interest to Brazil — at the WTO, and not in the FTAA context.

Comments and blame

After the meeting, the US stressed it remained committed to the FTAA. The FTAA would create the largest market in the world comprising close to 800 million consumers and an annual output of US$ 13 trillion, and the Bush administration considers the FTAA a cornerstone of its economic policy. Ross Wilson, the chief US negotiator, blamed Brazil for the stalemate in the talks, saying that "what was disappointing here was Brazil’s unwillingness to engage on the substantive issues that were under discussion. The Brazilian delegation was largely silent throughout a many hours, issue-by-issue discussion". He implied that Brazil was close to isolated in its position, although Argentina and Mercosur countries Paraguay and Uruguay offered some support. Brazilian Agriculture Minister Roberto Rodrigues, on the other hand, said that the US had shown no commitment to the process. According to him, "they talk all the time about a wide-ranging FTAA agreement, but they won’t negotiate key issues such as agriculture". He added that "as the WTO is deadlocked, it means that if there’s an FTAA agreement it will be a very limited one".

Coming out of the meeting, Jamaican Prime Minister P.J. Patterson said his current priority was the CARICOM 15-member economic organisation in the Caribbean, stressing that "we feel we have to concentrate our efforts on consolidation of our regional arrangements before the advent of FTAA". He said he doubted FTAA talks would be wrapped up by January 2005 as planned — which he did not necessarily see as a bad thing — and highlighted the special needs and interests of the small and vulnerable economies of the Caribbean nations.

The next scheduled meeting of the TNC will be held in Miami from 16-18 November, immediately before the Ministerial meeting which takes place from 20-21 November. The Ministerial is meant to take stock of negotiations and to set them on track for the fast-approaching deadline at the beginning of 2005.

"Hemisphere trade pact stalled in talks," WASHINGTON TIMES, 3 October 2003; "Jamaican PM Urges Go-Slow Approach In Americas Trade Pact," DOW JONES, 6 October 2003; "Brazil calls for simpler agenda on free trade," FINANCIAL TIMES, 24 September 2003; "Brazil ag minister says U.S. disinterested in FTAA," REUTERS, 4 October 2003.