NEW YORK (Dow Jones)--Trying to breathe new life into flagging hemisphere-wide free trade talks, U.S. officials offered Tuesday to slash tariffs on a wide range of imports from struggling Latin American and Caribbean economies.
In the most important concession, U.S. Trade Representative Robert Zoellick said Washington is prepared to scrap duties on textile and apparel imports by 2010. In return, the U.S. wants, among other things, better access to financial services in a region that groups together nearly 800 million people.
"It's a nice first step. There's a possible problem in that they have shown their hand a little bit here, but you've got to do it," said Richard Fisher, a managing partner at Washington-based business consultancy Kissinger McLarty Associates and former Deputy USTR during the Clinton administration.
The U.S. plan would ax tariffs on 65% of U.S. consumer and industrial goods from the hardscrabble region and eliminate 56% of agricultural tariffs immediately after inking a comprehensive agreement.
But trade watchers say Washington will probably have to take several more steps if it hopes to clinch the 34-nation Free Trade Area of the Americas initiative by its 2005 target date.
While Zoellick said "everything is on the table," he made no mention of eliminating huge subsidies for U.S. farmers, long a sticking point for major agricultural exporters like Brazil and Argentina.
"To start a conversation, the U.S. has to review its policy of protectionism," said Walder de Goes, head of the Brazilian Institute of Political Studies in Brasilia.
Last year, U.S. lawmakers approved a record-setting $180 billion in agricultural subsidies over 10 years - the kind of support that Latin American officials argue makes it impossible to compete on a level playing field for consumers in the world's most lucrative market.
De Goes predicted the region is still "very, very far from an accord."
A public opinion poll carried out last month by CNT/Sensus in Brazil, Latin America's most populous country, found that only 15% were in favor of FTAA, compared with 39% against. The remainder are sitting on the fence, waiting for more fine print to arrive.
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