US backs down in Miami to avoid another Cancun

Washington has tried to paint the meeting of ministers of the Free Trade of the Americas in Miami last week as a success, but this was far from the case.
The declaration issuing from the ministers meeting, which was held amidst massive street protests, clearly retreated from the original FTAA vision.
``The US wanted a binding comprehensive agreement with disciplines all the way through,'' said one official delegate from a Latin American country who has participated in the negotiations.
``The draft declaration coming out of the trade negotiations committee clearly is a retreat from that.''
The declaration proposes a ``flexible'' process whereby governments can decide to exclude some areas from FTAA negotiations for liberalisation even as other governments negotiate liberalisation in these areas. As the document states unambiguously: ``Ministers recognise that countries may assume different levels of commitments. In addition, negotiations should allow for countries that so choose, within the FTAA, to agree to additional obligations and benefits.''
This will allow Brazil and the other members of the Mercosur trade area _ Argentina, Paraguay and Uruguay as full members and Bolivia and Chile as associate members _ to withdraw from negotiations on investment, intellectual property, government procurement, services, investment, competition policy, and other areas they do not wish to subject to mandatory multilateral liberalisation.
At the same time, it will allow the United States to continue its policies of massive subsidisation of its farm sector by not joining negotiations to liberalise agriculture. The result is what pundits have called ``FTAA lite'' or ``FTAA a la carte''.

BRAZIL VERSUS WASHINGTON

Essentially, the ministerial declaration is the one tabled by Brazil at the trade negotiating committee meeting in El Salvador last July. As the Latin American negotiator cited earlier put it: ``Brazil was saying, look, 2003 is different from 1994, when [former US president Bill] Clinton launched the FTAA negotiations. Free trade policies have brought about bad results throughout Latin America. People have ousted neo-liberal governments. There was no way the US was going to get the comprehensive free trade agreement it wanted today.''
To the surprise of many, the United States agreed to the Brazilian compromise a few weeks before Miami. It had no choice apparently.
According to the Latin American negotiator, the alternative was ``another Cancun'' _ a reference to the collapse of the fifth World Trade Organisation ministers meeting in Mexico in September _ owing to widely disparate positions between Brazil and its allies and Washington, Canada and their supporters. This was a high profile setback the Bush administration could ill afford coming into an election year.
Despite the US stand-down, opponents of the FTAA are worried that Washington has made not a strategic retreat but a tactical one.
To Brazilian trade organiser, Fatima Mello, although the original FTAA vision has been disrupted, ``so long as the FTAA's framework and basic principles remain intact, the imposition of neo-liberal trade policies will remain a threat, so it is important to oppose even this watered down version of the FTAA''. Once the political situation changes, Ms Mello and others fear, Washington will return to the comprehensive liberalisation agenda.
The Miami outcome is being interpreted by some observers as a victory for Brazil, which has emerged as Washington's main antagonist in global economic forums.
It was also Brazil, under the new government headed by President Luis Inacio da Silva (better known as ``Lula''), that led the formation of the Group of 21 developing countries that frustrated Washington and the European Union's agenda in Cancun two months ago.
The Group of 21 made it impossible for the European Union and Washington to meet the developing world's demand for an end to massive agricultural subsidies with cosmetic concessions, resulting in the collapse of the WTO meeting.
The United States appreciates the threat posed by Brazil and the Group of 21. After labelling the Group of 21 as ``can't do'' countries in his last press conference in Cancun, US Trade Representative Robert Zoellick launched a diplomatic vendetta of threat and intimidation that forced Guatemala, Costa Rica, Peru, Colombia, and El Salvador to leave the formation.

BILATERAL TRADE AGREEMENTS: SIGN OF WEAKNESS?

The pattern seems to be repeating itself. At the same time the ministerial declaration watering down the FTAA was announced, Mr Zoellick declared that Washington would soon launch negotiations for two way free trade pacts with the Dominican Republic, Panama, Bolivia, Colombia, Ecuador and Peru.
To the Continental Campaign against the FTAA, which coordinated the civil society campaign, this move represented a ``more dangerous'' phase of negotiations marked by an effort by the US to use ``force to impose its objectives, trying to isolate the governments of the continent that are proposing a different vision''.
Recent developments highlight Washington's failure to realise the implications of developments in its ``backyard'' as it has focussed almost obsessively on the Middle East in the past few years.
While it continued to sing the praises of free market policies, these policies were creating economic stagnation, more poverty, and more inequality throughout the region, resulting in the electoral or extra-electoral ouster of pro-market governments in Argentina, Brazil, Ecuador, and Bolivia.
While Washington went after Osama bin Laden and Saddam Hussein, perhaps more effective challenges to its hegemony emerged in the persons of the democratically elected Lula in Brazil and Hugo Chavez in Venezuela.
Concluding bilateral agreements is an effort to shore up Washington's eroding hegemony, but to Sarah Anderson, an analyst with the Institute for Policy Studies, the US's reliance on them is a confession of weakness. ``They're admitting they can't get what they want via the FTAA, and that's because people and governments are resisting throughout the Americas,'' she said.

Walden Bello is executive director of the Bangkok-based Focus on the Global South.