SANTIAGO (Dow Jones)--The present draft of the Free Trade Area of the Americas document is "not interesting" for most of the countries involved, the Chilean foreign ministry said Wednesday.
The proposal submitted by Brazil and the U.S. "needs to be flexibilized and to find a balance, as in its current state it will reduce the FTAA to a minimum, leaving behind any economically interesting elements for Chile and most of the other countries present," the statement said.
Trade officials now negotiating in Miami must agree on a final draft late Wednesday. Thursday, ministers from the 34 western hemisphere countries are due to begin two days of negotiations on the final text.
Ahead of the talks, it was hoped they could help restart stalled efforts at liberalizing trade that failed during the recent World Trade Organization meeting in Cancun.
However, the U.S. and Brazil, who chair the meetings, themselves are at loggerheads on many issues, which contributed to the breakdown in Cancun.
"There has been a curious coincidence with Brazil and the U.S. The first is having problems defending the FTAA talks internally, the second is concentrating its efforts on bilateral negotiations, rather than spending political capital in a hemispheric negotiation," said Alicia Frohmann, head of the Chilean foreign ministry's FTAA division.
During the Miami talks, U.S. Trade Representative Robert Zoellick announced the U.S. would begin new trade talks with the Andean nations of Colombia, Peru, Ecuador and Bolivia, as well as Panama. Any FTAA worth the name should include a minimum of topics including services, investment, agricultural subsidies and anti-dumping measures need to be included in the FTAA, said Mario Matus, director of bilateral economic issues at the ministry. "That's the only way to achieve a negotiation both ambitious and balanced," Matus said. Chilean officials said the FTAA should go beyond a joint first step to include multilateral negotiations for those countries that desire to do so in order to reach the historic objective of the FTAA - a free trade area from Alaska to Patagonia.
While Chile already has an FTA with the U.S. due to go into effect next Jan. 1 and trade agreements of varying scale with most major countries in the region, those don't include issues including services, investment, and public procurement the Chileans would like to see freed up.
Within the Americas, the U.S. has free-trade agreements with Canada, Mexico and Chile, and is in the process of negotiating similar pacts with Central American nations and the Dominican Republic.
The largest industry group of U.S. manufacturers said Tuesday that the free- trade region must be comprehensive to benefit every country.
-By Stephan Kueffner, Dow Jones Newswires; +56 2 460 8546; stephan.kueffner@dowjones.com
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