Bridges Weekly Trade News Digest • Volume 9 • Number 8 • 9th March 2005
Brazil, US Pursue FTA Rapprochement; Mercosur Cosies Up To Central America
Senior trade officials from Brazil and the US met on 22-23 February in an attempt to set out common ground to put negotiations for the Free Trade Area of the Americas (FTAA) back on track. While sources described the meeting as "constructive" and "showing positive movement," differences persisted over agriculture and intellectual property rights issues. Brazil and the US are co-chairs for the FTAA negotiations, which have effectively been on hold since February 2004. Elsewhere, representatives from the countries of the Southern Cone met with their counterparts from five Central American countries on 21-22 February to explore interregional trade relations.
Brazil, US: progress on ag, but not on IPRs
Acting US Trade Representative (USTR) Peter Allgeier and his Brazilian counterpart Adhemar Bahadian met in Washington to try to reach agreement on a common set of obligations applicable to all 34 FTAA countries. The two were attempting to bridge differences in areas such as farm trade that stalled last year’s talks. Bahadian noted some "positive movement," particularly on the issue of agriculture. Specifically, he said the US withdrew its insistence on a new category of farm products to be called ‘other’ that would not have a date for elimination of tariffs. That language will be replaced by text that will be more "acceptable in terms of normal trade negotiations," he said.
Less progress was evident on intellectual property rights (IPRs), where Brazil disagrees with a US proposal to allow for cross-retaliation against legitimate businesses for IPR violations. Brazil argues that this is stronger than what is required under the WTO Agreement on Trade-related Intellectual Property Rights (TRIPS).
According to a press release issued after the meeting, the next session between the two FTAA co-chairs will be on 29-30 March, in order to enable Brazil and the US to consult with delegations from other FTAA countries. The two countries are hoping to re-convene the FTAA Trade Negotiations Committee (composed of all FTAA vice-ministers of trade) by late April or early May. A USTR spokesperson said "Our hope would be at that meeting that the 34 countries would be able to agree on the basis for restarting the work of the negotiating groups."
MERCOSUR, Central American countries explore "flexible arrangement"
In other trade developments in the hemisphere, a mission from MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay) led by Paraguayan Foreign Minister and acting MERCOSUR Chair Leila Rachid met with the Central American Integration System (SICA - Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica) to analyse the best route towards integration between the two regions. Rachid’s visit to Central America forms part of MERCOSUR’s strategy to maintain forward momentum in regional trade negotiations by inking trade arrangements with other countries in the hemisphere as long as the FTAA process remains stalled.
A MERCOSUR spokesman said that the intention was not to reach a free trade agreement with Central America, but rather a "flexible arrangement" that took account of the asymmetries between the two parties. The MERCOSUR economies are generally at a higher level of development than those of their Central American counterparts, which are highly dependent on exports of primary commodities and imports of industrial goods.
"Co-presidentes conversan sobre relanzamiento de ALCA," PUENTES, 3 March 2005; "Brazil and US narrow differences on common set of FTAA obligations," WTO REPORTER, 3 March 2005; "El Mercosur y Centroamericana analizan un acuerdo commercial," PUENTES, 3 March 2005.