FTAA talks stall as other deals surface

MIAMI, Nov. 18 (UPI) -- American and Brazilian trade negotiators were exchanging verbal blows but certainly no agreements at talks for the creation of a hemispheric-wide free trade zone on Tuesday.

Instead of announcing progress in talks for the Free Trade Area of the Americas, the United States instead said on Tuesday that it intends to pursue bi-lateral trade deals with four of Latin America's Andean nations.

With the Brazilians looking like they won't budge on their key demands for the FTAA, it leaves one to wonder just where these talks are going.

While it was an expected move, U.S. trade negotiator Robert Zoellick's official word that bi-lateral trade agreements with Colombia, Peru, Ecuador and Bolivia will be pursued chilled FTAA talks.

Luis Filipe de Macedo Soares, a senior Brazilian diplomat who is helping lead that country's negotiating team, merely shrugged when asked if the United States' enthusiasm for going after bi-lateral trade deals in Latin America was undercutting the FTAA.

"We don't have any reason to think anything about it," Soares said. "If these countries wish to do so, they're free to pursue that."

But Soares tried to underscore that the negotiating climate between the United States and Brazil had improved of late, as both sides want to see a successful conclusion to the talks.

"We can't allow Miami to become Cancun part two," he said. "Nobody wants that."

The talks on the bi-lateral agreements with the Andean countries would come outside of the realm of the FTAA negotiations.

Yet isn't it the progress of those very FTAA talks that ostensibly was the reason why officials from 34 nations in the Americas - every country but Cuba - have gathered in Miami?

To be fair, it is only day two of the Miami talks and not all of the top officials have arrived in town. Yet the mood around the summit is one of decided ambivalence on where the talks are heading.

Frank Vargo, the chief spokesman on trade issues for the Washington-based National Association of Manufacturers, said the members of his group are looking for a "high-quality FTAA agreement, and that has to include Brazil."

Vargo isn't so keen on the U.S. move to more bi-lateral agreements.

"The big difference between the bi-laterals and the FTAA is that in the FTAA, everybody opens up," he said, while talking on the sidelines of the summit.

"We figure that if we have truly free trade, within ten years of signing an agreement we could triple our trade to Latin America."

On the key issue of agricultural subsidies - a topic which no officials are talking about as yet this week - Vargo said the talk in the business community is that the Brazilians are willing to give up the issue as part of the FTAA agreement, leaving talks on subsidies to be conducted before the WTO.

Of course, nobody is confirming that, but it certainly helps explain the U.S. acquiescence on the Brazilian insistence of a more "flexible architecture" for the FTAA talks.

Brazilian negotiators are insisting on a scaled-back version of the FTAA agreement, one in which countries could choose the level of free trade they want to engage in for specific sectors of their country.

Brazil has already indicated that it doesn't want to liberalize on key issues such as intellectual property rights, investment and government procurements, all vital areas for the United States.

Odd, doesn't it seem that an FTAA agreement that doesn't include anything on the U.S. farm subsidies and allows the Brazilians to pick and choose where they want to engage in free trade seem strangely like not having any agreement at all? Maybe it's just me.

Officials haven't given any details on the impact that the so-called "FTAA lite" would actually have on the state of free trade in the Americas. But it is clearly pushing the United States to leave Brazil behind and seek out bi-lateral deals wherever it can.

Which is why Tuesday was solely the Zoellick Show, as the Bush team's top trade man proudly presided over the press conference announcing intentions to open trade talks with the four Andean countries.

Zoellick, with officials from those four nations at his side, looked ever the smug schoolmaster who had gathered his top pupils around him, showing those ruffian Brazilians how good students are rewarded.

"This step today is a vote of confidence for the countries in the hemisphere," Zoellick said after announcing the opening of the bi-lateral talks. "This will promote other goals: eliminating narco-trafficking, promoting democracy and reducing poverty."

Zoellick also pointed out that the United States is talking with the Dominican Republic about a bi-lateral deal. He took pains to point out that the amount of combined trade that the United States could have with the Dominican Republic and the Central American nations participating in the CAFTA trade talks would amount to $22 billion annually.

"This would be America's second largest market (in Latin America) aside from Mexico, and would be larger than Brazil," Zoellick said.

Actually, Zoellick said that bit about Brazil at least twice on Tuesday, just to be sure they felt the poke in the ribs.

Regardless, the Brazilian delegation smiled through their teeth and continued to say that the negotiating climate had improved dramatically since the WTO fiasco in Cancun.

Adhemar Bahadian, a top Brazilian diplomat also helping lead their negotiating team, said that his country and the United States had worked hard to lessen disputes.

"The countries responsible for being in charge - the U.S. and Brazil - found a formula to allow the acrimonious climate to end," Bahadian said.

To most observers, it seems that the secret formula is one of carefully sidestepping each other, and thus doing nothing to confront the true hurdles to free trade and the reduction of poverty that President Bush says he wants to see.

After the flurry of announcements regarding bi-lateral trade deals on Tuesday, Mark Fried, a spokesman for Oxfam International, a non-governmental organization that has been critical of the U.S. efforts on trade, said that Latin America's poor will get no help with the way these talks are heading.

"It appears that the FTAA is going nowhere fast," Fried said. "That isn't necessarily good for poor people."

Fried noted that under the guise of the FTAA, the weaker nations in the Americas would have more negotiating power.

"In the bi-lateral deals, the poorer nations have less clout," he said. "The U.S. is guaranteeing its current market access, but is asking for much more in return."