Free Trade Area of the Americas: Dead?


The L.A. Times reports on poor progress in plans for a Free Trade Area of the Americas:

A ministerial meeting of FTAA members, intended to put finishing details on the deal, was supposed to be held in Brazil this year. But it hasn't been scheduled, and the deadline to complete the agreement is just two months away. The accord would then need to be ratified by all member governments.

…..U.S. officials acknowledge there is little chance of meeting the January deadline, but there have been no moves to reset the clock.
"The deadline is coming and going, and there ain't going to be an FTAA," said Lori Wallach, director of Public Citizen's Global Trade Watch, a leading opponent of the trade pact.

Bush administration officials insisted they were committed to moving forward with the FTAA, though at a slower pace. "Completing the talks by Jan. 1 is obviously not realistic," said Richard Mills, a spokesman for the U.S. Trade Representative's Office.

Agricultural protectionism, which helps give the U.S. a currently $2.5 billion trade surplus in that field, wasn't really on the table in FTAA negotiations, thanks to the political clout of our farming welfare queens. Still, some of the goals of the FTAA are proceeding on both narrower and wider levels, with bilateral and regional agreements being negotiated, and the World Trade Organization a continual arena for worldwide trade negotiations (including those over contentious, and much loved on the national level, agricultural subsides and barriers). That makes the FTAA's fate unimportant, some free traders think:

Daniel Griswold, director of trade policy at the Cato Institute, thinks the U.S. should pronounce the FTAA dead and focus on completing the WTO-sanctioned global trade negotiations, launched in Doha, Qatar, in 2001. This year WTO members agreed on a framework for eliminating agriculture supports, allowing the so-called Doha round of talks to proceed to the next stage.

"You've got all the headaches of a big multilateral negotiation with a fraction of the payoff," Griswold said of the FTAA. Unlike the FTAA, the Doha round would cover 148 nations, including Europe, Japan and China.

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  1. It made a nice counter-balance to the Doha Round, in that if France and the EU were too insistent on the CAP, the US could simply retreat to a regional trading bloc or at least threatened that. Also, it made a nice insurance policy IF the Doha Round failed, the FTAA might have been a fall back.

    Personally, I'll eat my hat if the CAP or US Ag subsidies take any real hits in the talks. I can hope, but it's going to take some ferocious lobbying by the DEVELOPING countries to get it, what will they give up to get them limited or eliminated? Developed nation notions of workers rights and environmental law? Which will drive up production costs and function as a restraint of trade, as well?

  2. Joe L.,

    The U.S. has been obstructionist at Doha as the E.U. Indeed, what has made the difference at Doha is neither the U.S. nor the E.U., but the developing countries getting together and showing some muscle.

    And the FTAA was never a counter-balance, as it was dead at least two years ago.

  3. More power to them....Ag subsidies are going to be a major stumbling block to progress. I'm more than willing to see them dropped.

  4. There is no way that the FTAA would have cut agricultural subsidies. They were off the negotiating table from the beginning. The FTAA is a preferential trade agreement, and it's impossible to cut subsidies preferentially - hence the issue wasn't even worth discussing. See my post criticizing competitive liberalization for more details.

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