The frustrating trade agreements of the Americas

Poor Robert Zoellick. After almost a decade of hard work on the Free Trade Area of the Americas negotiations, the U.S. trade representative had no choice two weeks ago but to spin what was obviously an ineffective ministerial meeting as a success. But he probably had plenty of time to be disappointed long before the meeting began.

From Nov. 20-21, representatives from the United States and 33 other Western Hemisphere countries met in Miami for the eighth of nine ministerial meetings. FTAA negotiations are to be completed no later than January 2005.

The meeting was tainted from the outset. Brazil and the United States, which jointly led the talks, were already poised with a Brazil-driven draft stating that member countries can opt out of certain parts of the agreement. What kind of multilateral agreement is that, President George W. Bush? Maybe Florida won’t read the text past the title of “success” before heading to the polls.

Bush, whose vision of a trade area stretching from “Alaska to Argentina” has been a cornerstone of his regional foreign policy, realizes what is at stake here. Brazil made it clear it was prepared to see the Miami meeting fail unless it got its way. The new FTAA draft now requires countries to agree only to basic common rights and obligations and leaves them free to opt out of any further commitments. With an election year just around the corner, it seems that saving face has become more important to Bush than saving the FTAA.

The Bush administration had previously pushed to enforce strong rules on issues such as intellectual property rights, government procurement and investment. But Brazil has been a strong opponent of such provisions, coupled with its bitter disappointment in the administration’s insistence that farm subsidies not be negotiated outside of the World Trade Organization. Well, we saw what happened in Cancun, Mexico – and so did Brazil. With Brazil unwilling to waver on its stance, Bush had to choose between a watered-down FTAA or complete failure in Miami. And it was on the heels of a disastrous World Trade Organization round in Cancun, again largely because of disputes between the United States and Brazil’s 21 groupies.

So, what now? U.S. business groups are already complaining – and with reason – that an FTAA that goes little further than countries’ existing WTO commitments is hardly worth it. Now, the very least the Bush administration can do is push for a linkage between benefits and obligations, so fewer committed member countries will reap fewer of the FTAA’s benefits. Canada, Mexico and Chile all strongly support this position, but Bush still seems to fear Brazil’s wrath. Negotiators from Brazil have reacted angrily to the possibility of such limitations, saying that talks could reach a stalemate if the final decision is not based on the joint U.S.-Brazilian text.

Brazil might come to regret its hard-line approach in the end if the final FTAA ministerial meeting held there fails to make progress and the blame falls on Brazil as the host country. Until then, it seems talks will continue to be a battle of wills between the United States and Brazil. It remains to be seen which country will accept the terms of the other in the place of complete failure, but for now, Brazil seems to have the United States in check. Will Bush have enough confidence to stand his ground – and that of many Americans, Canadians, Mexicans and Chileans – or will he simply work fast to get some signatures on a page in time to run off to his next presidential debate with the fantastic news?

For now, Bush and Brazil are aiming to prove that all is well, and abruptly ended the talks in Miami a day early – there was little left to discuss, they say.

Well, at least Robert Zoellick got a day off.

Christina Connelly is a graduate student in the Humphrey Institute of Public Affairs. Send comments to [email protected]