Miami — Canada and other countries warned yesterday that a bid by the United States and Brazil to significantly narrow the scope of a proposed free-trade area of the Americas agreement could derail the talks under way in Miami.
A group opposed to the barebones deal — including Canada, Chile, and Mexico — says the "FTAA lite" salvage proposal Washington and Brasilia have cobbled together to salvage talks is insufficient to keep negotiations moving forward.
"This is simply a papering over of differences and is not enough to establish a basis for continuing [talks]," a source close to FTAA negotiations in Miami said yesterday.
The move by Washington and Brasilia to a lowest-common-denominator FTAA deal, ridiculed as "FTAA lite", reflects gaping disagreements between the two economic titans of the Western Hemisphere over how far negotiations should go in dismantling trade barriers.
It would fall grievously short of the sweeping and comprehensive "NAFTA on steroids" goal envisaged in 1994, when preparatory FTAA negotiations first began among all countries in the Western Hemisphere except Cuba.
Trade watchers are increasingly suspicious that the United States' only aim in Miami is to keep talks alive until the meeting ends Nov. 21.
x Some believe Washington is stalling so it can avoid playing to host to a debacle like the September collapse of World Trade Organization talks in Cancun.
Countries such as Canada, Chile and Mexico, that already have sweeping one-on-one free-trade deals with the United States — as well as the 10 countries preparing to negotiate similar bilateral accords with Washington — are resisting "FTAA lite" because they do not want others to gain preferential access to the American market without making the concessions they made.
"If other people aren't paying the same to get the same access you did, they're debasing the coinage," Ottawa-based trade consultant Peter Clark said.
This FTAA setback is worrying Ottawa because a lighter deal would be a major setback for Canadian trade goals in the region. As a middleweight player, Canada relies on regional and global pacts to get the kind of comprehensive access to new markets for business that it can't get on its own.
An "FTAA lite" deal could rob Canada of broader markets for investment, the services business and government procurement in the Americas.
Canada's dissatisfaction with the direction of FTAA talks will mean International Trade Minister Pierre Pettigrew will spend a great deal of time at the Miami talks battling for Ottawa's interests, rather than playing the more conciliatory role he normally plays at trade talks.
"It's going to be interesting to see Minister Pettigrew as a gladiator instead of a facilitator," Mr. Clark said. "Instead of just being the honest broker, [Canada will be] getting out there and hammering away at issues."
Mr. Pettigrew, who wasn't available for comment yesterday, has already publicly slammed a minimalist FTAA deal, saying Ottawa can't accept a "buffet-like approach [to the FTAA] where you take a little bit of this and a little bit of that."
With the future of FTAA talks unclear, the U.S. government yesterday forged ahead with announcements that it will continue hammering out separate one-on-one trade deals in the Americas.
U.S. Trade Representative Robert Zoellick yesterday announced new trade talks with the Andean nations of Colombia, Peru, Ecuador and Bolivia, and with Panama.
This comes on top of negotiations already under way for a U.S.-Central America free-trade deal.
Oxfam International, a development group, criticized Washington's move as "one more nail in the coffin" of the FTAA, which was supposed to create one level playing field in the Americas.
"The circus of bilateral announcements is a clear indication that FTAA is going nowhere fast," said Phil Bloomer, trade campaign manager for Oxfam International.
The vague and minimalist proposal put forward by Brasilia and Washington concedes that "countries may assume different levels of commitments" in the FTAA deal while jointly agreeing on only a small core agreement.
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