MIAMI, Nov. 17 (UPI) -- Expectations are low as trade officials from 34 nations convene here Monday to try and spark life into talks for a hemispheric-wide free-trade zone.
Talks on the Free Trade Area of the Americas -- which would stretch from Alaska to the tip of South America -- are at a crucial point, coming on the heels of a disastrous World Trade Organization meeting in Mexico and amidst verbal sparring between the developed and the developing world.
The FTAA has been nine years in the making, and hopes for a comprehensive deal were higher back in 1994, when trade ministers from all countries in the Americas -- with the exception of Cuba -- met in Miami and decided to build the world's largest free-trade zone.
With a Jan. 1, 2005, self-imposed deadline hanging heavily over negotiators, expectations are that any agreement will neither meet that deadline nor be nearly as ambitious as previously imagined.
What has gone wrong with the FTAA? In a word, reality.
A series of financial crises in Latin America in the late 1990s deadened enthusiasm for free-market policies. A worldwide economic downturn of the last few years has done little to help. And a shift in focus for U.S. foreign policy after the Sept. 11 terrorist attacks has conspired to put the FTAA on the back burner for the Bush Administration.
Throw into that mix a move in Latin American politics to the left, coupled with the gluttonous U.S. agricultural subsidy package and increased steel tariffs of last year, and you see the result we have today: repetitive arguments over obvious hurdles to free trade.
For developing nations, that barrier is clearly the agricultural protectionism of the First World. For the developed nations, it is hesitancy on the part of the developing world to open up its goods and services markets to foreign competition.
Which indicates that this week in Miami could very well end like the September WTO talks in Cancun, which saw developing countries walk out because of the recalcitrant stance of the United States, Europe and Japan on their combined $300 billion a year in agricultural subsidies.
The FTAA talks are now appropriately being co-chaired by the United States and Brazil, the largest economies, respectively, in North and South America.
It is in Brazil that U.S. negotiators are facing their stiffest opponents to pushing through a version of the FTAA they desire.
While Brazilian officials have long been combative toward U.S. trade policies, the rhetoric has been turned up a notch since the election of President Luiz Inacio Lula da Silva, who took office on Jan. 1.
It was Brazil that most actively organized the Group of 21 nations that refused to let the issue of U.S. agricultural subsidies die in Cancun.
It is Brazil that has taken on the role of championing the trade demands of the developing world. And it was Brazil that top U.S. trade official Robert Zoellick labeled as a "won't do" country on trade after Cancun.
Yet there are signs this week that the gadfly Brazil will acquiesce -- ever so slightly -- and that perhaps its demands on cutting those agricultural subsidies will be toned down.
On the U.S. side, there has been less acrimonious talk in recent weeks, perhaps signaling the post-Cancun reality that trade talks don't work so well anymore as a one-way dialogue.
"Developing countries are becoming too important as participants in the world economy to remain just as passive reactors to what is done by the developed world," said John Williamson, a senior fellow with the International Institute for Economics and the economist who coined the phrase "Washington Consensus."
But Williamson was quick to point out that just because Brazil and other developing nations sparked the breakdown at Cancun, doesn't mean that the United States will budge on the threat of another failed trade conference.
"They're not going to get a deal on agriculture and anti-dumping without continuing to liberalize their own trade," Williamson said of developing nations.
Sean Burges, a senior fellow at the Council on Hemispheric Affairs, a Washington-based think-tank, said that the fallout from Cancun would affect trade negotiations from here on out.
"The developing countries are realizing that they have strong internal and cooperative economic potential independent of the U.S. and the EU," said Burges. "The era of 'take it or leave it' trade talks for the developing world is over."
A sentiment that will be put to the test this week, as Brazil faces mounting pressure to take a more workable stance with the United States.
As many trade watchers predicted after the rise of the Group of 21 at Cancun, the U.S. since then has been using considerable pressure to peel countries off from the group, holding out the carrot of bi-lateral trade deals while also noting that the U.S. stick of economic reprisals can have damaging effects.
That has led several nations -- among them Costa Rica, Colombia and Peru -- to leave the group in recent weeks, further weakening Brazil's mission to form a more cohesive voice for the developing world on trade. This defection, no doubt, had an affect on the Brazilian trade officials recent softening of their hard-line stance that hit its peak at Cancun.
Brazil's Foreign Minister Celso Amorim, who leads trade talks for the country, told a Brazilian television station on Monday that, despite the drawbacks for some sectors in the country, Brazil needs to be a part of the FTAA, and the country will have to make some concessions.
"But we have to know what we are going to win, too," Amorim said. "That has to be a concrete aspect of the negotiations."
Osvaldo Douat, leader of the Brazilian Business Coalition, said in Miami on Monday that despite the roadblocks to completing the FTAA, he remains confident it will get done.
"In Brazil, public debate on the FTAA has taken on unheard of proportions," he said. "The involvement of different segments of Brazilian civil society underscores the strategic importance that the project of hemispheric integration holds for the country."