BREAKING NEWS: US HOUSE OF REPRESENTATIVES PASSES CAFTA-DR
The US House of Representatives has passed the Central American Free Trade Agreement-Dominican Republic (CAFTA-DR) by a narrow margin of 217 to 215. The vote came after over an hour of debate on the night of 27 July.
ICTSD will provide further coverage of the CAFTA-DR vote in next week’s issue of BRIDGES Weekly.
US-ANDEAN FTA SLOWLY MOVES FORWARD
Trade officials from Andean countries and the US made progress on customs procedures and competition policy during a round of free trade agreement negotiations held in Miami from 18-22 July. The final US-Andean FTA, which will include the US, Colombia, Ecuador and Peru, will have 22 chapters on topics ranging from market access to intellectual property rules, according to Deputy Assistant US Trade Representative Bennett Harman. The governments have reached deals on only four of these topics, leaving several difficult issues, including agriculture, for future talks.
The US currently offers the Andean countries preferential duty-free market access for thousands of products in an effort to create incentives to divert economic activity away from illegal drug production and trafficking. These breaks, however, expire in 2006. The FTA being negotiated would allow Andean countries to lock in and expand duty-free market access; US goals include expanded market access and stronger intellectual property protection.
Oswaldo Molestina Zavala, Ecuador’s chief negotiator, said the talks have helped ensure that the deal "is fair for all participants, and not just for one." However, a week earlier in Lima, thousands of Peruvians protested the trade pact, claiming it was a way of bullying Peru to allow US companies to dominate its market. One protester, Manuel Izaca, president of the association of Peruvian drug companies, said: "We’re really worried about the impact this is going to have. Not only are medicines going to get more expensive, but fewer people will have access to drugs." While the talks have fallen behind schedule, representatives are optimistic that the negotiations could finish by the end of the year.
ICTSD reporting; "U.S.-Andean free-trade negotiators make progress in Miami," ASSOCIATED PRESS, 22 July 2005; "Thousands of Peruvians protest US trade pact", REUTERS, 13 July 2005; "Deputy USTR Peter Allgeier’s Remarks to the 2004 Colombia Investor Conference" OFFICE OF US TRADE REPRESENTATIVE, 29 November 2004.
US-AFRICA AGOA FORUM: US SAYS IT WILL NOT UNILATERALLY CUT SUBSIDIES
Senior trade officials from African countries and the US met in Dakar, Senegal, from 18-20 July at an annual meeting to discuss issues related to the African Growth and Opportunity Act (AGOA). The AGOA is a trade preference scheme between the US and 37 African countries that grants certain African products liberalised access to the US market.
The meeting focused on the growing trade between Africa and the US, as well as efforts to boost economic development in the continent. The meeting also looked at strategies to help African economies take advantage of the preferential market access advantages for goods covered by AGOA. Other trade-related topics discussed included the investment climate in Africa, energy development, transportation and infrastructure issues, and partnerships to address HIV/AIDS.
At the meeting, African officials pressed the US to end to its farm subsidies. However, US Agriculture Secretary Mike Johanns said the US would not unilaterally end its subsides unless other rich countries showed a commitment to do the same at the WTO’s December Ministerial Conference in Hong Kong. Pointing to the fact that the current US farm bill is set to be replaced by a new one when it expires in 2007, he said that "If we do not [complete the Doha Round of trade talks] a new farm bill will be set in place for a number of years and we will have lost the opportunity quite literally into the next decade." In related news, Jeffrey Sachs, UN Secretary-General Kofi Annan’s top advisor on poverty, said on 18 July that African countries should not sign on to any Doha Round deal in which rich countries fail to commit to slashing farm tariffs and subsidies.
The USTR press release on the meeting is available here: http://www.ustr.gov/Document_Library/Press_Releases/2005/July/Senior_U.S._African_Officials_to_Discuss_Trade_Issues_at_Conference_in_Senegal.html.
ICTSD Reporting; "US warns Africa on farm subsidies," BBC, 19 July 2005; "Back WTO or farm subsidies go on, U.S. tells Africa" Reuters, 19 July 2005; "Dakar African Trade Forum Focuses On Expansion, Diversification" All Africa.com; 18 July 2005; "U.N. Adviser: Africa Should Refuse Talks," REUTERS, 18 July 2005; "Africa warned of new US farm subsidy," BUSINESS DAY, 20 July 2005.