Date: Sat, 6 Apr 1996 07:49:41 -0600
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>>> Item number 9768, dated 96/04/05 00:00:55—AL
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From: IATP <email@example.com>
Subject: NAFTA & Inter-American Trade Monitor
As business executives and trade ministers of 34 American nations met in Cartagena, Colombia on March 21, diplomatic maneuvering escalated to include a shouting match over intellectual property rights that ended only with the intervention of armed security guards. Hot button issues ranged from intellectual property rights to labor and environmental concerns, and included basic disagreements on how and how fast to move toward the agreed goal of establishing the Free Trade Area of the Americas by or before 2005.
The most explosive verbal fireworks came at the Americas Business Forum, a parallel meeting of 1,500 private business representatives from various countries of the hemisphere, held immediately before the official ministerial meeting. When an argument over intellectual property rights escalated to a shouting match with Argentine charges of U.S. imperialism, security guards were called to quell the disturbance.
The Business Forum reached agreement on calls for movement toward
FTAA, decreased protectionism, and benchmarking and quality standards
for government performance. The Business Forum also recommended that
the United States adopt the metric system and repeal the Helms-Burton
restrictions on trade with Cuba, saying that the latter
render the free trade agreements and the expansion of their
liberalisation ineffective. The United States is the only country
in the hemisphere that does not use the metric system, complicating
movement toward common standards.
Heated discussions at the official trade ministerial meeting included an argument between U.S. Trade Representative Mickey Kantor and Mexican Commerce Secretary Herminio Blanco over U.S. insistence that a new working group on government procurement include an analysis of the impact of corruption on international trade. Ministers went into closed door sessions to hammer out the language of the final declaration.
In the end, the trade ministers agreed to establish four new working groups on government procurement, intellectual property rights, services, and free competition. Terms of reference (the description of the tasks assigned) for the working groups on government procurement and intellectual property rights ended up substantially weaker than the language proposed by the United States. The original seven working groups, established at the first trade ministers meeting in Denver in 1995, focus on market access, rules of origin and customs procedures, investment, technical regulations and barriers to trade, sanitary and phytosanitary rules, subsidies and anti-dumping, and small economies. A twelfth working group on dispute resolution will be formed in 1997. The ministers rejected proposals to establish study groups on labor and environmental concerns.
In a move of particular significance to agriculture, Chile and Colombia won language expanding the focus of the anti-dumping work group to examine how subsidies may have indirect anti-competitive effects on international commodities trade. The United States agreed to allow the working group to identify and make recommendations on domestic agricultural supports, in addition to farm export subsidies.
The trade ministers' final declaration also welcomed the
contribution of the Americas Business Forum, specifically recognizing
the importance of the role of the private sector and its
participation in the FTAA process.
Hemispheric labor ministers, led by Argentina's Caro Figueroa,
asked that the FTAA
incorporate a social dimension that guarantees,
at a minimum, respect for fundamental labor standards, including
collective organization and bargaining, prohibition of child labor and
forced labor, and non-discrimination in the workplace, advocated
establishing a dialogue between government, business and labor to
facilitate this goal. United States proposals for labor and
environmental working groups or, at the very least, study groups, were
The final declaration expressed appreciation for the declaration
received from the Tenth Inter-American Conference of Ministers of
Labor, but conceded only that the ministers
importance of the further observance and promotion of worker rights
and the need to consider appropriate processes in this area, through
our respective governments. In a compromise reached after
intensive negotiations, the FTAA vice ministers will consider
establishing a study group on environmental issues only after they
receive a report from the World Trade Organization's Committee on
Trade and Environment in December 1996.
The United States and Brazil represented opposing viewpoints on the pace and path of movement toward FTAA, as they have since the beginning of the process. As the largest country of the South and a partner in the Mercosur trade alliance, Brazil has advocated movement toward FTAA through alliances between regional trading blocs, gathering strength in the South to confront the NAFTA alliance and the United States. The United States, on the other hand, seems to favor a strategy of gradual accretion of nations and blocs to NAFTA. The Organization of American States official with special responsibility for FTAA matters, Miguel Rodriguez Mendoza, a Venezuelan, advocated a third path that would involve a hemisphere-wide round of negotiations similar to the Uruguay Round talks that culminated in the creation of the World Trade Organization.
Brazil generally advocates a slow approach to the FTAA, while the
United States representatives pushed for more rapid progress toward
hemispheric trade integration, despite internal U.S. political
opposition to free trade and the Clinton administration's
inability to obtain the fast-track negotiating authority necessary to
allow it to negotiate accession of Chile to NAFTA. The final
declaration of the ministerial meeting directed vice ministers to
make an assessment of when and how to launch the FTAA negotiations
and to make recommendations to us on these issues before the 1997
Trade Ministerial Meeting. Adoption of this language represented a
rejection of U.S. proposals that would have committed the trade
decide at the next trade ministerial meeting when and
how to launch comprehensive FTAA negotiations, and would have
directed vice ministers to make specific recommendations on
most appropriate 'paths' [to] facilitate construction of the
Smaller countries complained that Brazil and the United States have effectively hijacked the FTAA process. Compromises on some U.S.-Brazilian differences were worked out during a bi-lateral meeting in Brazil just prior to the conference, and the subsequent five and one-half hour flight to the trade ministerial meeting. With the support of the United States, Belo Horizonte, Brazil was selected as the site for the 1997 trade ministerial meeting.
Final Cartagena Declaration on FTAA, INSIDE U.S. TRADE, March
U.S.-Proposed Revision of Cartagena Ministerial
Declaration, INSIDE U.S. TRADE, February 23, 1996;
Trade Ministers Reach Agreement on FTAA Declaration, INSIDE
U.S. TRADE, March 22, 1996; Jay Mazur,
Free Traders Still
Aren't Listening, JOURNAL OF COMMERCE, March 20, 1996; Kevin
OAS Official Says Poverty Must Be Addressed in Hemispheric
Trade Talks, JOURNAL OF COMMERCE, March 27, 1996; Estrella
The Third Route to the FTAA, INTERPRESS SERVICE,
March 15, 1996; Yadira Ferrer and Humberto Marquez,
Forceful in Backing Integration, INTERPRESS SERVICE, March 20,
1996; Humberto Marquez,
Four New Working Groups to Design the
FTAA, INTERPRESS SERVICE, March 21, 1996; Tom Brown,
U.S. Renew Commitment to Hemispheric Free Trade, REUTER, March 22,
1996; Kevin G. Hall,
Mexico May Lead Way for Hemispheric Trade
Bloc, JOURNAL OF COMMERCE, March 26, 1996; Kevin G. Hall,
Hemisphere's businesses Press for Basic Reforms, JOURNAL OF
COMMERCE, March 21, 1996; Kevin G. Hall,
Trade Leaders Take Off
Their Gloves in Cartagena, JOURNAL OF COMMERCE, March 22, 1996.