Shadow over FTAA

The Caracas-based Latin American Economic System, commonly known by its Spanish acronym SELA, has raised questions about the US commitment to the FTAA process.

This, in the context of the lack of support the US received by the majority of countries in the western  hemisphere in their military action against Iraq. SELA said it is possible that these latest events will further encourage the United States to concentrate its FTAA negotiations on specific partners, rather than entire regions. “ In the long term, both the war on terrorism and the associated efforts to promote peace in the Middle East have inspired a proposal that could affect the interests of the oil-exporting countries in the region. President Bush has called for the negotiation of an FTA with the Middle East,” according to SELA whose membership includes Trinidad and Tobago. But  Director, Caribbean Studies Programme at the University of Miami, Professor Anthony Bryan does not hold the view that the FTAA is being purposefully watered down nor is the US showing less importance to it. “The pursuit of FTAs has nothing to do with support or lack of it for the Iraq war,” Professor Bryan told Business Day in an interview from Miami. He noted that the US and Chile, a UN Security Council member which did not back the war in Iraq signed an FTA in Miami on June 6. “Both countries had been mulling over a free trade pact for the past ten years and during that time Chile moved ahead to sign its own free trade agreements with the European Union, Canada, Mexico and other countries. The US and Chile had invested a lot of time in drawing up the FTA,” said Bryan, a Professor of International Relations. “From the US perspective, the pact with Chile is intended to help the US regain momentum on free trade and serve as a model for the Americas and  beyond.”

SELA believes that the decision of four Central American countries to join the “coalition of the willing” may have also enhanced their position in the ongoing Free Trade Agreement (FTA) negotiations with Washington. “Pressures have also been brought to bear on other countries in the region, including members of the Caribbean Community. In the medium term, the conflict has added to the strains on the Free Trade Area of the  Americas (FTAA) negotiations,” said SELA. “There is absolutely no reason to expect that the war per se will cause the FTAA process to break apart, but it does produce one more source of centripetal pressure on the hemispheric negotiations.” US Trade Representative Robert Zoellick has also notified Congress of his intent to pursue FTAs with five nations of Central America; Australia; the South African Customs Union of South Africa, Lesotho, Botswana, Namibia, and Swaziland and Morocco and has started negotiations toward this end. Last month the US signed a free trade pact with Singapore, which incidentally supported the war. “ The essential point is that the pursuit of FTAs has nothing to do with support or lack of it for the Iraq war. Rather the administration’s concern is that domestic labour and environmental groups could impede the FTAA schedule via US House and Senate committee hearings beginning later this month on Capitol Hill,” said Bryant. Next year is also an election year and some legislators have to be careful in their home constituencies where there is fervent opposition to the FTAA, he said. He said the Bush administration is encouraging the use of global FTAs to keep up the momentum even while they are aware that the FTAA has announced a time-line. “And most importantly, the FTAA is but one of several other complex trade negotiations involving the US.”

FTAA negotiators have set ambitious goals. By June15, 2003 the five groups negotiating market access will exchange requests for revised offers and all ten negotiating groups are working to provide vice ministers with a revised text at their next meeting on July 7 in El Salvador. Their objective is to have a rather advanced agreement by the November FTAA Ministerial in Miami. “ In my opinion, the goals of this phase are very ambitious and will require a series of trade-offs,” said Professor Bryan. He said the FTAA will be signed in 2005 but it will be  bracketed because of the failure to completely and successfully negotiate each and every issue before the deadline. “Difficult negotiating issues such as agricultural subsidies and perhaps services will be continuously negotiated for some years after or until the WTO resolves those issues. “In fact, the resolution of the key issue of agricultural subsidies has been linked to ongoing negotiations in the WTO and these are currently bogged down,” he said. “In any case, the various Western Hemisphere FTAs are building blocs and perfectly compatible with the WTO. They all accrue to an eventual FTAA.

Essentially the US will push the envelope to the best of its ability. President Bush, Bryant said, will want to see the FTAA as a success if he does get elected to a second term. SELA also talked about pressure on the Caribbean Community which did not join the “coalition of the willing” and cited the possible backlash on trade that small countries could feel from the US. To boost its case, SELA said on May 15, a group of thirteen members of the House of Representatives sent a strongly-worded letter of protest to President Bush.  The letter, written by Ranking Minority Member Charles Rangel (Democrat-New York), the most senior Democrat on the House Ways and Means Committee, protested the high-pressure tactics that the Bush administration used. The letter cited Caribbean media reports noting that “just hours before the start of the war, Jamaica, Barbados, and other member nations of the Caribbean community (CARICOM) were contacted by the US State Department and warned against participating in a proposed special meeting of the United Nations General Assembly to discuss the US invasion of Iraq.” It quoted Reich as declaring that, “I would urge CARICOM to study very carefully the consequences of” their position. “What do I tell a member of Congress if I go asking for increased access for Caribbean products for example? — ‘well they didn’t support us in our time of need’.” Noting that Caribbean countries “fear that blacklisting, sanctions, and other retaliatory measures may be imposed by the US at a time when their fragile economies are even more vulnerable as a consequence of the drop in tourism caused by the war,” the letter warned that “threatening our friends because they do not agree undermines the credibility of our commitment to the very democratic principles we espouse.”