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Contra el TLC - Against CAFTA

IT Daily, November 7, 2005

U.S. Official Sees Major Challenge In Completing Andean FTA Talks in 2005

The United States would like to finish negotiations on an Andean free trade agreement by the end of this year, a U.S. trade official said Nov. 4, but it will be "incredibly challenging" to do so given the work that remains.

Regina Vargo, assistant U.S. trade representative for the Americas, said during a panel discussion sponsored by the Washington International Trade Association that progress in the talks has been "uneven," with some areas "well advanced" while others require substantial work.

Vargo said the next round of talks is scheduled for the week of Nov. 14 in Washington, D.C. The United States is negotiating the Andean trade pact with Colombia, Ecuador, and Peru, while Bolivia participates as an observer.

Vargo said in September that the final months of the year constituted a "window of opportunity" to complete the accord, before trade officials turn their attention to WTO ministerial in Hong Kong in mid-December. In addition, Colombia and Peru will hold elections in the spring, which will also likely distract from the talks.

The United States will continue to negotiate the Andean pact even if it is not finished this year, Vargo said, though she expressed some impatience with her counterparts.

"We obviously would stay engaged [next year], but in a way that you have to ask yourself, are you talking or are you moving forward? And I think we've all recognized the time has come to advance the issues and take some concrete decisions," she said.

Bush Meets Andean Presidents

Separately, President Bush met with the presidents of the four Andean countries--Bolivia, Colombia, Ecuador, and Peru--in Mar del Plata, Argentina, Nov. 4 during the first day of the Summit of the Americas.

In a press briefing, Bush said the FTA was "the main topic of discussion" during the meeting. A transcript of the briefing was posted on the White House Web site.

"[T]hey were very interested in making sure that we didn't forget them and that we continue to pursue a free trade agreement," Bush said. "All those countries recognize the importance of having a free trade agreement with the United States and I assured them that our negotiators are negotiating in good faith and will continue to negotiate in good faith."

The outstanding issues in the Andean talks, Vargo said, include textiles and apparel, agriculture, sanitary and phytosanitary measures, intellectual property rights protection, and investment, which Vargo termed "a substantial agenda."

Ag Subsidies and FTAA

President Bush acknowledged Nov. 2 that the Free Trade Area of the Americas, which would set up a free trade zone among the 34 Western Hemisphere democracies, has "stalled."

Nevertheless, Tom Shannon, assistant secretary of state for the Western Hemisphere, said in a press briefing Nov. 4 that "there is significant support within the region for economic integration and for a free trade area of the Americas."

Shannon added that "there's also a recognition" that the issue of agriculture subsidies has slowed the FTAA talks, and that those subsidies are better addressed in the Doha Round of WTO negotiations.

FTAA Resuscitation Seen Possible

Meanwhile, Jeffrey Schott, senior fellow at the Institute for International Economics, said in remarks at the Washington International Trade Association forum that the FTAA is "drifting" but could still be revived.

"Some commentators say yes, the talks have been drifting, but the body is facing down [in the water] and is not going to revive," Schott said. "I still think the body is facing up, is breathing, and can be revived."

The U.S. proposal in early October, as part of the Doha talks, to significantly cut its agriculture subsidies if other countries provide greater market access, has helped bolster trade relations in the Western Hemisphere, Schott said. Countries such as Brazil have long complained about U.S. farm subsidies.

But if progress in cutting subsidies is not made in Doha, it will then be "very difficult to revive" the FTAA talks, Schott said.

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