Regional trade negotiators plan to meet in Mexico this week in a renewed attempt to break the logjam that has forced a retreat from the lofty goal of creating a giant trade bloc in one fell swoop.
Even U.S. officials, pushing hard for the Bush administration's ambitious commercial agenda, have lowered their sights on what can be accomplished during the weeklong meeting in Puebla, Mexico.
Obstacles and disagreements that have dogged the decadelong effort to create a Free Trade Area of the Americas became apparent late last year when governments in Argentina, Brazil and Venezuela took a stance more independent from Washington.
Christopher Padilla, assistant U.S. trade representative for intergovernmental affairs and public liaison, conceded last month that the chances of a successful outcome to the Puebla meeting of deputy trade ministers in the Trade Negotiations Committee were, ``quite frankly, uncertain.''
The meeting is scheduled to start Monday. According to Inside U.S. Trade, Padilla, speaking at a U.S.-Brazil Chamber of Commerce luncheon in Washington on Jan. 20, warned that ``if we're going to stay on schedule, this meeting in Puebla needs to produce some good results.''
Trade ministers at the Nov. 20 FTAA meeting in Miami were able to minimize differences between U.S. desires for an ambitious trade agreement and the limited scope sought by a handful of countries. The move for a more limited agreement was spearheaded by the administration of Brazilian President Luis Inácio Lula da Silva.
In the end, everyone proclaimed the Miami conference a success. But left unanswered were questions about how exactly the January 2005 deadline for creating a 34-nation trade pact would be met.
The final declaration from Miami scaled ambitions back from a ''comprehensive single undertaking,'' agreed upon at a similar meeting of ministers in 2002 in Quito, Ecuador, to a piecemeal accord where ''countries may assume different levels of commitments.'' U.S. industry groups complained that such an outcome gutted the accord, but leaders later muted their criticism.
The main agenda item in Puebla will be setting a common level of obligations that each country agrees to in each of the nine negotiating groups: agriculture, antidumping, competition policy, dispute settlement and subsidies, government purchasing, intellectual-property rights, investments, market access, and subsidies.
It had been anticipated that the deputy ministers would hear presentations from the 11 cities, including Miami, vying for the permanent FTAA secretariat, but that agenda item was canceled.
The deputy ministers, expected to pick up in Puebla where the ministers left off in Miami, have few instructions as to how to achieve an accord.
''Unless the deputy ministers go to Puebla with specific political-level instructions on what they can and can't agree on, the prospects for a breakthrough don't look too promising,'' said Eric P. Farnsworth, vice president of the Council of the Americas.
''Even so, I wouldn't rule out such a possibility, as President Bush has had specific conversations with several leaders bilaterally in Mexico at the summit,'' said Farnsworth, who was visiting Miami Friday.
Countries could choose to strike deeper bargains with other nations through smaller, second-tiered accords.
SEEKING BALANCE
Still, while U.S. officials sometimes talk about how benefits would depend on deeper commitments, Brazilian officials have stuck to the wording of the final Miami declaration, which merely referred to ``an appropriate balance of rights and obligations.''
The countries have a year-end deadline because the congressional authority that allows the Bush administration to negotiate trade agreements expires in June 2005. The rule, once called ''fast track'' but now known as ''trade promotion authority,'' can be extended for two years but must go back to each house for a vote. It passed last time by just one vote -- and that was before the wave of manufacturing layoffs that have devastated rural areas in the South.
In one sign of the continuing divergence since the November talks in Miami, there have been, according to regional officials, no preliminary smaller meetings leading up to the crucial conference in Puebla, which serves as the temporary secretariat of the proposed trade pact.
FAILED MEETING
An attempt to meet in January in Santiago, Chile, fell through when Brazil and the other countries failed to agree on which nations would attend. Typically, such minimeetings help key parties break deadlocks.
The current problems in the FTAA talks surprise neither the boosters of free trade nor its detractors.
''The fate of the FTAA is related to the global trade talks,'' said James Bacchus, a former chief appellate judge of the World Trade Organization appellate body, which rules in world trade disputes.
''There will not be a significant and substantive FTAA until there is a successful conclusion of the WTO Doha Round,'' said Bacchus, who now chairs the global-trade practice group at the law firm of Greenberg Traurig.
World-trade talks, launched in Doha, Qatar, in 2001, broke down in Cancún, Mexico, last September over developing countries' demands that industrialized nations reduce their subsidies to agriculture.
The same issues are plaguing the FTAA as Latin American countries demand more market access for their agricultural products. But U.S. industry groups have complained that many of the more developed Third World countries have also insisted on deferments in lowering their own tariffs and other barriers to U.S. goods and services.
A CONUNDRUM
On the agricultural issue, Washington has insisted that the United States cannot eliminate its subsidies unless Europe and Japan follow suit.
In a conciliatory gesture, U.S. Trade Representative Robert Zoellick sent a letter to WTO members calling for a renewed effort to tackle the agriculture conundrum and revive the talks.
This approach has renewed free-trade supporters' hope for the success of global trade talks. But Peter Morici, a U.S. trade negotiator, is skeptical that agriculture can be negotiated outside of international talks or that the current two-tiered FTAA will produce a quality deal because so many barriers to trade can be erected outside of tariffs, particularly in Brazil.
''A lot of what the United States is interested in goes beyond the tariffs to all the things that replace tariffs as barriers to exports,'' said Morici, now a professor at the University of Maryland's business school.
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