Bridges Weekly Trade News Digest • Volume 5 • Number 40 • 8th November 2001
Regional Trade Developments in the Wake of Doha
Chile seeks FTAs with US and EU
On 27 November, Chile and the US began their ninth round of talks on a free trade agreement (FTA) between the two countries with intellectual property, government procurement and the services sector on the agenda. According to the US, the contentious issues of labour and environment, as well as dispute settlement mechanisms will not be discussed at this meeting, but will instead be postponed until the US Congress approves Trade Promotion Authority (TPA; formerly "fast-track"). Congress will vote on TPA — which would allow the Congress to only approve or reject trade agreements negotiated by the US President, but not amend them — on 6 December, two days after the end of the US-Chile meeting.
The two countries had originally hoped to complete the bilateral deal, seen as a model for a future hemispheric trade agreement, by the end of the year, but US resistance to amend its anti-dumping laws had slowed down the negotiations. If the TPA bill is passed next week, Chile intends to hold a tenth and final round of talks in the second half of January.
In related news, the US has released the environmental review of the proposed Chile-US FTA with a request for comments by 20 November 2001 (available at http://www.ustr.gov/environment/draftchileer.pdf).
On the other side of the Atlantic, Chile is also set to continue talks on an FTA with the EU, which it expects to finalise by May 2002. In the past, negotiations were hindered by disagreements over EU farm subsidies and lack of market access for some Chilean products. According to Deputy Foreign Minister Heraldo Munoz, Chile hopes that the outcomes of the Fourth WTO Ministerial Conference in Doha — where Chile has successfully put its priorities, i.e. agricultural subsidies and anti-dumping rules, on the WTO agenda — will facilitate the negotiations.
Canada to launch free trade talks with Central American countries
Following the FTA between Canada and Costa Rica signed in April 2001, Canadian International Trade Minister Pierre Pettigrew on 21 November announced the launch of free trade talks with El Salvador, Nicaragua, Honduras and Guatemala, set to begin in December. While the Central American countries only account for a fraction of Canada’s international trade and investment, the FTAs are thought to show Canada’s commitment to a hemispheric free trade deal and give new impetus to multilateral trade talks in the WTO. According to Canada’s Department of Foreign Affairs and International Trade, the bilateral deals will also include labour and environment-related provisions. To date, Canada has signed FTAs with the US, Mexico, Israel and Chile, and is holding free trade talks with Singapore.
Singapore advocates FTAs to speed up WTO negotiations
FTAs are thought to speed up free trade talks at the WTO, according to a statement released on 23 November by Singapore’s Ministry of Trade and Industry. "WTO negotiations are cumbersome because of [the WTO's] huge membership," the statement said. Bilateral FTAs, in contrast, which Singapore has actively pursued in the past, "push the envelope for trade liberalisation and generate new ideas which can catalyse the WTO process," as individual economies might be prepared "to move at a faster pace". Singapore has recently completed free trade talks with New Zealand and Japan, and is currently negotiating with the US, Australia and Mexico.
Europe agrees to free trade talks with Iran
The European Commission on 19 November approved a proposal for negotiating directives for a Trade and Cooperation Agreement with Iran. The contractual relationship for negotiations will contribute to improvements for trade, business and investment conditions and to Iran’s further economic liberalisation and deregulation. The agreement will also strengthen co-operation with Iran in certain key areas, including drugs, refugees, energy and the environment. The EU is Iran’s largest trading partner.
"Chile-US trade round avoids labor, environment," REUTERS, 27 November 2001; "Chile says Doha talks help pacts with US and EU," REUTERS, 19 November 2001; "Canada, Central American Countries Launch Trade Talks," GLOBE AND MAIL, 21 November 2001; "Canada Begins FTA Negotiations With El Salvador, Guatemala, Honduras, Nicaragua," WORLD TRADE ONLINE, 21 November 2001; "Singapore Min: Free trade deals can speed up WTO process," AP, 23 November 2001; "EC Agrees to Negotiate For Trade Agreement with Iran," WORLD TRADE ONLINE, 19 November 2001; ICTSD Internal Files.