A US Strategy to Divide and Conquer?

  
The US seems to have convinced the Caribbean islands that they are making progress on issues of special and differential treatment, reports the October 24 edition of BRIDGES Weekly Trade News Digest. According to sources, on October 14, Caribbean countries obtained what some officials have termed a "breakthrough" in the process of seeking special and differential treatment (S&D) in the Free Trade Area of the Americas (FTAA). At a conference in Trinidad of US and Caribbean trade negotiators, the small island states gained recognition of their special situation. "The US is fully aware that Caribbean countries face very special problems," said US Trade Representative Robert Zoellick after the meeting. "They are generally small economies. They are island economies. We want to bring them along the process of growth of openness and trade, but if we are going to do that effectively we have to recognize the special problems and challenges, and be able to design solutions for them."

Central American countries are also seeking S&D, and requests for similar treatment from countries such as Bolivia and Ecuador are being discussed. With the trade ministers of the 34 FTAA nations meeting in Quito on November 1, the US appears to be working to keep them from creating a cohesive opposition. After extending trading concessions to the Andean countries, the US is negotiating a free trade agreement with Central America and advancing on a separate track with the Caribbean.

On another front however, the issue of special and differential treatment continues to sizzle. In an ongoing quest for 'progress' in the review of S&D provisions, the WTO's Committee on Trade and development (CTD) met in five special sessions in October. Generally speaking, developed countries did not respond favorably to agreement-specific proposals. They reportedly made requests for further clarifications, commented on the inefficiency and/or impracticality of the solutions proposed, and suggested that the topics were best dealt with outside the CTD (i.e. in the relevant WTO bodies). These disputes will surface within the FTAA and could delay implementation. The Bridges report mentions some of the specific areas of WTO difficulty with S&D issues: subsidies & countervailing measures, anti-dumping, technical barriers to trade, safeguards and services. This list seems likely to be duplicated in the FTAA negotiations.

Brazil is trying to counter the US strategy by bringing the different blocs into closer relations with MERCOSUR. According to Brazilian Minister Sergio Amaral, MERCOSUR is drafting a preferential tariff agreement with the Caribbean Community (Caricom) and the Central American Common Market. Amaral met with representatives of the Caribbean and Central American trade blocs in Brazil on October 22 to establish a schedule for talks. This could be the first step toward a free trade zone joining the three regions of the American continent. Meanwhile, free trade negotiations between MERCOSUR and the Andean Community are reaching their final stages. The two blocs are aiming to conclude negotiations before the end of 2002.