20051108

FTAA

Lets turn our attention away from the riots in France to the just passed riots at the Summits of the America regarding the 11 years and ongoing work to create a Free Trade Area of the America.
MAR DEL PLATA, Argentina -- The Fourth Summit of the Americas attended by President Bush and 33 regional leaders ended here Saturday with a virtual partition of the Americas in two economic and political blocs: one made up of the United States and 28 other countries, and another made up of Brazil and four other countries.

Despite efforts from all sides to put a good face to it, the summit ended in disarray.

Judging from what I've seen in more than two decades of covering nearly every major regional summit, it was the first time participating countries couldn't even agree on a joint final news conference..

More importantly, it was the first time in the 11-year-old history of the Summit of the Americas that participating countries failed to agree on advancing the talks for a hemisphere-wide free trade area.

Since 1994, when the leaders of the Americas met in Miami to propose a Free Trade Area of the Americas, spanning from Alaska to Patagonia, the region's democracies vowed at every summit to speed up the creation of a hemispheric trade bloc. This time, they ended with a bipolar declaration stating that ''one group of countries'' wanted to go ahead with FTAA negotiations, and ''another group of countries'' didn't.

Barring a surprise turnaround at a meeting scheduled for an indefinite date next year, pending the result of worldwide trade negotiations within the World Trade Organization, we are heading to a formal partition of the hemisphere.

One bloc is made up of the United States, Canada, Mexico, Central America, Colombia, Chile, and several other countries, whose combined gross domestic product is an estimated $14.5 trillion. The other emerging bloc is made up of Brazil, Argentina, Venezuela, Paraguay and Uruguay, whose economies add up to about $2.2 trillion.

NOT DEAD YET

Granted, the split is not terminal: while Venezuela's self-described socialist President Hugo Chávez wants to ''bury FTAA for good,'' Argentina's foreign minister Rafael Bielsa noted that the remaining four countries believe that ''the conditions are not there'' for them to continue the FTAA negotiations. They would join them if the United States lifted its subsidies to U.S. farmers, which are hurting South American agricultural exports.

But, judging from my interviews with several presidents and foreign ministers after sneaking into the hotels where they were staying, there is a growing fatigue among the Group of 29, and an escalating desire by some of its smaller members to forget about the holdouts and go it alone, and start an ``FTAA of the willing.''

Venezuela's Chávez does not need an FTAA, because Venezuela is a one-product country that lives on its oil exports, and would not have much else to sell if it obtained preferential access to the other countries.

After Bush left Argentina he stopped in Brazil.
Most reports cast the fourth Summit of the Americas as a showdown between Mr. Bush and Venezuelan strongman Hugo Chávez. To read some of the accounts, you'd think the Chávez vision provided a serious alternative to the continuing expansion of free trade and global competition, and to the prosperity that has come with them. Give the Castro acolyte some credit for media savvy and sound bites -- which is what you have to fall back on when you lose on substance.

And lose Señor Chávez did, because the real action this weekend didn't take place at the summit in Argentina but a day later on the American President's visit to Brazil. Mr. Bush and Brazilian President Lula da Silva went a long way toward agreeing on a common strategy to reduce farm subsidies that just might salvage the Doha round of global trade-opening.

"Your president has criticized the agricultural subsidies that the developed world pays to its farmers -- trade-distorting subsidies that undercut honest farmers in the developing world," Mr. Bush said in a speech in Brasilia. "I agree with President Lula." As Brazil's ambassador to the U.S. told us, "The visit was very constructive, and that fact was really apparent in the Brazilian press."

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