Saint Paul Pioneer Press | By JANE BUSSEY | September 16, 2003 w
CANCUN, Mexico -- Failed world trade talks in Mexico dashed the free-trade community's hopes for an early victory on global trade.
Now, the same volatile issues -- and Brazil's emergence at the forefront of developing world demands -- are certain to define the November gathering of hemispheric trade ministers in Miami to discuss the proposed Free Trade Area of the Americas.
But events in Cancun have unsettled the global trade agenda.
An energized and more united developing world emerged after trade ministers failed Sunday to reach any agreement on a framework and agenda for World Trade Organization talks aimed at lower trade barriers.
"The failure at Cancun will make progress in the FTAA more difficult," said Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland.
Late Sunday, U.S. Trade Representative Robert Zoellick, looking weary, offered the FTAA as a new opportunity for the hemisphere. All the countries are still on board. But the sticking points will be on the agenda for negotiations.
Cancun talks actually collapsed because a group of countries demanded the European Union drop its demands that before discussing agricultural issues, developing nations agree to broaden the scope of new trade agreements. Europe wanted four issues, called "the Singapore issues," relating to investment, on the table. When neither side would budge, talks collapsed.
The issues include rewriting domestic laws to make countries more international-business-friendly, easing customs procedures and other regulations for trade, creating more transparency in government purchasing and even eliminating such trade laws as anti-dumping measures that permit tariffs to protect damaged industries against imported products sold below cost.
Many developing countries object to these new negotiations.
Brazil spearheaded a new alliance that included Argentina, China, India and South Africa to demand a new agenda on agriculture. They targeted price supports and export subsidies -- in essence an attack on the U.S. farm bill.
Few people are writing off the FTAA yet. But no one is predicting a fiesta in Miami.
Brazilian Foreign Minister Celso Amorim called the FTAA negotiations an "important endeavor," but suggested that Brazil would not go along with a broad agenda.
"It has a good chance of success if we are pragmatic," Amorim said. "If we overload it, as we overloaded the WTO, then we may have some difficulties." Between job losses in the United States and major agricultural issues involving low-cost producer Brazil and key farm states, such as Florida, the FTAA faces political problems, especially with U.S. presidential elections less than a year after the Miami meeting.
The goal of Brazil and its neighbor Argentina is to gain greater market access for farm products like citrus and sugar -- big industries in Florida. The president's trade negotiating authority contains several fine points making it harder to bargain over agricultural products in FTAA than in the WTO.
A sign of how important citrus and sugar are to Florida was the presence of several state industry representatives among the scores of industry advisers who attended the trade talks.
But the agricultural issue is also key to what Mercosur countries -- Argentina, Brazil, Paraguay and Uruguay -- have put at the top of their list.
Morici, of the Robert H. Smith School, argues that countries like Brazil have used the agricultural issue as a "stalking horse" to protect their own domestic manufacturing.
"Brazil really does not want to open its manufacturing to competition and the same themes will continue to play out," he said. "No one wants to be blamed for failure of the talks."
Robin Rosenberg, a trade expert at the North-South Center at the University of Miami, said that Brazil now faces a balancing act.
"Brazil is emerging from Cancun as a global leader of the developing world," said Rosenberg. "But it is a high-risk strategy to carry that over to the FTAA."
where the United States does not have to allow Brazil to exercise veto power over the regional agreement."
Florida Gov. Jeb Bush, who is leading a trade mission to the Dominican Republic this week, declined to speculate how the WTO failure would affect the FTAA or Miami's bid to host the Secretariat.
"I think the strategy of the United States and Ambassador Zoellick is the right one: to remain steadfast in the commitment to free and fair trade and to negotiate with those countries that have the greatest interest in doing that," Bush said. "With those countries that are more reluctant to do so, not to force them."Saint Paul Pioneer Press:
