A tactical retreat

Print edition : December 19, 2003

The United States' stand-down at the Free Trade Area of the Americas Ministerial Meeting in Miami by accepting a watered-down declaration appears to be a tactical retreat and not a change of policy.

WASHINGTON has tried to paint the recent Ministerial Meeting of the Free Trade Area of the Americas (FTAA) in Miami as a success, but the reality is the opposite.

The declaration issued at the end of the Ministerial, which was held in the background of massive street protests on November 20, clearly retreated from the original FTAA vision. "The United States wanted a binding comprehensive agreement with disciplines all the way through," said one official delegate from a Latin American country who participated in the negotiations. "The draft declaration coming out of the Trade Negotiations Committee clearly is a retreat from that."

Instead, the declaration proposes a "flexible" process where governments can decide to exclude some areas from FTAA negotiations for liberalisation even as other governments negotiate liberalisation in these areas. The document unambiguously states: "Ministers recognise that countries may assume different levels of commitments.... In addition, negotiations should allow for countries that so choose, within the FTAA, to agree to additional obligations and benefits."

This will allow Brazil and the other members of the Mercosur trade area to withdraw from negotiations on investment, intellectual property, government procurement, services, investment, competition policy, and other areas they do not wish to subject to mandatory multilateral liberalisation. At the same time, it will allow the U.S. to continue its policies of massive subsidisation of its agriculture by not joining negotiations to liberalise agriculture. The result is what pundits have called "FTAA lite" or "FTAA a la carte."

ESSENTIALLY, the Ministerial declaration is the one tabled by Brazil at the Trade Negotiating Committee meeting in San Salvador last July. The Latin American negotiator cited earlier put it thus: "Brazil was saying, `look, 2003 is different from 1994, when [President Bill] Clinton launched the FTAA negotiations'. Free trade policies have brought about bad results throughout Latin America. People have ousted neoliberal governments. There was no way the U.S. was going to get the comprehensive free trade agreement it wanted today."

To the surprise of many, the U.S. agreed to the Brazilian compromise a few weeks before Miami. It had no choice apparently. According to the Latin American negotiator, the alternative was "another Cancun" - a reference to the collapse of the Fifth Ministerial of the World Trade Organisation - owing to widely disparate positions between Brazil and its allies and Washington, Canada, and their supporters. This was a high-profile setback the Bush administration can ill-afford close to an election year.

Despite the U.S. stand-down, opponents of the FTAA are worried that Washington has made not a strategic retreat but a tactical one. According to Brazilian trade organiser Fatima Mello, although the original FTAA vision has been disrupted, "so long as the FTAA's framework and basic principles remain intact, the imposition of neoliberal trade policies will remain a threat, and so it is important to oppose even this watered-down version of the FTAA". Once the political situation changes, Mello and others fear, Washington will return to the comprehensive liberalisation agenda.

The Miami outcome is interpreted by some observers as a victory for Brazil, which has emerged as Washington's main antagonist in global economic fora. It was also Brazil, under the new government headed by President Luis Inacio da Silva (better known as "Lula"), that led the formation of the Group of 21 developing countries that frustrated Washington and the European Union's agenda in Cancun two months ago. The Group of 21 made it impossible for the E.U. and the U.S. to meet the developing world's demand for an end to massive agricultural subsidies with cosmetic concessions, resulting in the collapse of the WTO's fifth Ministerial.

The U.S. appreciates the threat posed by Brazil and the Group of 21. After labelling the Group of 21 as "can't do" countries in his last press conference in Cancun, U.S. Trade Representative Robert Zoellick launched a diplomatic attack involving threat and intimidation that forced Guatemala, Costa Rica, Peru, Colombia and El Salvador to leave the formation.

THE pattern seems to be repeating itself. At the same time that the Ministerial declaration watering down the FTAA was announced, Zoellick declared that Washington would soon launch negotiations for bilateral free trade pacts with the Dominican Republic, Panama, Bolivia, Colombia, Ecuador and Peru. To the Continental Campaign against the FTAA, which coordinated the civil society campaign, this move represented a "more dangerous" phase of negotiations marked by a U.S. effort to use "force to impose its objectives, trying to isolate the governments of the continent that are proposing a different vision".

Recent developments highlight Washington's failure to realise the implications of developments in its "backyard" as it has focussed almost obsessively on West Asia in the past few years. While it continued to sing the praises of free market policies, these policies were creating economic stagnation, more poverty, and more inequality throughout the region, resulting in the electoral or extra-electoral ouster of pro-market governments in Argentina, Brazil, Ecuador and Bolivia. While Washington went after Osama bin Laden and Saddam Hussein, perhaps more effective challenges to its hegemony emerged in the persons of the democratically elected Lula in Brazil and Hugo Chavez in Venezuela.

Concluding bilateral agreements is an effort to shore up Washington's eroding hegemony, but to Sarah Anderson, an analyst with the Institute for Policy Studies, the U.S.' reliance on them is a confession of weakness: "They're admitting they can't get what they want via the FTAA, and that's because people and governments are resisting throughout the Americas."

Walden Bello is executive director of the Bangkok-based Focus on the Global South. He was in Miami during the FTAA Ministerial Meeting.

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