The U.S. meets defeat: thwarted in the FTAA negotiations, the U.S. looks to smaller trade deals
U.S. PLANS TO IMPOSE a NAFTA-style free trade deal on the entirety of the Western hemisphere were defeated in Miami in November, as Brazil outmaneuvered the United States in negotiations at the Ministerial meeting for the Free Trade Area of the Americas (FTAA).
But U.S. trade negotiators don't give up easily. Rebuffed in their effort to create a hemispheric agreement of their own design, they announced plans to commence a series of smaller trade agreements on the North American Free Trade Agreement (NAFTA) model.
At the Miami meeting, Brazil succeeded in putting forward a framework--widely touted as "FTAA-lite"--that would alleviate the most extreme aspects of the U.S.-backed proposals that critics say would threaten public health, the environment and worker rights.
"We have a notion of balance and flexibility that takes into account that we are 34 very different countries," said Brazilian Foreign Minister Celso Amorim, at the Ministerial's concluding news conference. "We have different sizes, different levels of development, and we also have a different structure for our foreign trade."
In at least four separate places, the final statement of the meeting, known as the Ministerial Declaration, reiterates the need for a "balanced" agreement. The key phrase of the Declaration states that, "Ministers recognize that countries may assume different levels of commitments."
What this means in practice is that countries will not be required to adhere to the proposals advanced by the United States for intellectual property, investment, services and other areas. Public interest groups charge that these proposals would extend drug company monopolies and dramatically raise the price of essential medicines [see "Patents, Profits, Power and Poverty," Multinational Monitor, July/August 2003]; give corporations broad authority to challenge a range of consumer, health and environment regulations [see "NAFTA's Investor Rights: A Corporate Dream, a Citizen's Nightmare," Multinational Monitor, April 2001]; and squash the ability of FTAA countries to protect public services from demands for privatization [see "Serving Up the Commons," Multinational Monitor, April 2001].
Under the new FTAA framework, those countries that agree to specific commitments, in the investment area, say, will be required to honor them. But they will not be required to make such commitments.
The developing country members of an FTAA will have little reason to agree to such commitments--Honduras does not have many investors seeking protections in the U.S. market--though critics fear these countries will be pressured one-on-one by the United States to accept such commitments.
Brazil gained the upper hand in the FTAA negotiations by responding effectively to the U.S. position that it could not negotiate key agricultural issues within the FTAA. U.S. negotiators said they wanted to move on agricultural issues of concern to Brazil and other countries, but these matters had to be handled at the World Trade Organization (WTO), where they could be negotiated as well with the European Union and Japan. Brazil argued that if agriculture is a WTO issue, then so is intellectual property, which is already covered by a WTO agreement, and so are other controversial issues.