MIAMI - As the security net tightens dramatically around the downtown core, trade ministers from 34 countries in the Americas will take another stab at realizing a now nine-year-old and seemingly fading dream -- creating a free trade zone from Alaska to Terra Del Fuego.
Even the most optimistic of trade ministers are not holding out much hope the wide gulfs that exist can be narrowed to meet the January, 2005, deadline of creating a Free Trade Agreement of the Americas.
"The FTAA offers a vision of hemispheric trade, prosperity and democracy that dates back to the 1820s," said Robert Zoellick, the U.S. Trade Representative, just before he arrived here for the four days of talks as anti-globalization protests began to mount. "So it is not surprising that it involves addressing tough issues and meeting difficult challenges."
Pierre Pettigrew, the International Trade Minister, would only offer a glimmer of hope that Canadian exporters would soon get unfettered access to the massive Central and South American market, with 830 million potential customers and a combined economy of $20.1-trillion.
"The Americas region represents Canada's most important market, and strengthening our economic ties with the region through the FTAA is a priority," he said.
So far, the trade ministers are trying to play down expectations of a major breakthrough while, at the same time, desperately looking to reassure skeptics that this meeting will not be a repeat of September's World Trade Organization meeting in Cancun. There, the talks among 146 countries aimed at liberalizing agricultural trade simply collapsed.
Mr. Pettigrew labelled this week's talks -- the eighth since 1994, when the round was launched -- as the "midpoint in the final phase of negotiations," while Celson Amorim, Brazil's Trade Minister, announced that the talks "may not give a final result to every issue, but which allows us to move forward.
"We need to move forward gradually and steadily," he said. "There is interest on both sides in finding flexibility."
Even a draft declaration, prepared by Brazil and the United States and obtained by the Financial Post yesterday, talked only vaguely about reaffirming a commitment to signing the deal by January, 2005, while recognizing that "countries may assume different levels of commitments."
In other words, the Free Trade Agreement of the Americas is out. The new proposal is for a semi-Free Trade Agreement of the Americas.
The major problem, of course, is that the climate for free trade talks has changed dramatically over the past decade. Corporate globalization has leapfrogged over the various sets of trade talks, with companies simply moving operations to where they get the best economic benefits, largely through lower wages, at least according to free trade critics, who see deals like the FTAA just making conditions worse.
"What needs to be understood is that, like NAFTA, the FTAA will not discriminate in the damage it does," said Leo Gerard, president of the United Steelworkers Association. "It will lower the wages of workers in Latin America, as NAFTA has in Mexico, with the same impunity that it wipes out jobs in the U.S. and Canada."
More importantly, though, the global economic downturn -- from which most countries are only now starting to recover -- has made true free trade far less attractive than it was during the boom years of the 1990. Developing countries in particular are reluctant to open up sensitive sectors such as agriculture to foreign competition, especially from giants such as the United States.
That is at the heart of the current quagmire at the FTAA. The United States and Brazil, co-chairs of this meeting, are still far apart despite efforts to cobble together some sort of face-saving agreement.
"The USA does not want a failure at Miami, but do they want to appear to give Brazil a victory," said Peter Clark, an Ottawa trade consultant.
For its part, the Brazil government of Luiz Inacio Lula da Silva, seen as a left-leaning politician, wants his country and others to be able to exempt key sectors from a sweeping agreement.
"We need to find a formula that would allow us to make progress toward better market access, greater trade freedom, and which at the same time would respect differences in the level of development and sensitivities in different areas," said Mr. Amorim.
The United States appears to be willing to offer some concessions. The five-page suggested declaration from Brazil and the U.S. yesterday suggests an agreement be based on a set of common rights and obligations and would allow individual countries to offer varying degrees of liberalization.
"If this free trade agreement is going to be completed, both the U.S. and Brazil have to be on board," said Bill Merkin, a former U.S. trade negotiator and now a Washington trade consultant.
Faced with such a daunting problem, the backup strategy for the U.S. and Canada has been to launch bilateral deals.
The U.S. is negotiating CASTA, a free trade agreement among five Central American countries -- Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. It is also expected to announce the launch of similar talks with Colombia, Peru and Panama.
Canada has a free trade agreement with Costa Rica and Chile and is negotiating with El Salvador, Guatemala, Honduras and Nicaragua.
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