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TPA and the FTAA: A New Push Forward? The administration lobbied hard for approval of the TPA legislation, which obliges Congress to accept or reject trade agreements without making any changes or amendments to their provisions. Secretaries O'Neill and Powell, USTR Zoellick and the president himself visited Capitol Hill. The legislation was not even put on the floor until after midnight, and debate and lobbying continued into the early hours of Saturday morning, July 27. The vote was largely along party lines and very close - 215 to 212. Democrats complained that they had not seen the bill until Friday, when copies were sent out by e-mail. Rep. Marcy Kaptur (D-Ohio) charged that TPA would extend "corporate slums and global plantations with penny wage jobs," and accused supporters of "wanting to debate it in the middle of the night while most people are sleeping." Nevertheless, House approval was followed by an affirmative vote in the Senate, which passed the law by a wider margin of 64-34 on August 1. Besides TPA, the new legislation also contains other important provisions, including reauthorization of Andean trade preferences. This system gives Colombia, Bolivia, Ecuador and Peru freer access to the US market for apparel made from non-US fabric. The legislation also maintained the Generalized System of Preferences (GSP) for developing countries. A provision added by the Senate to keep trade remedy laws, especially regarding anti-dumping, was removed in the compromise version of the bill. Elimination of these laws was a major issue for countries critical of US trade practices. Just days before TPA was approved in the House, the heads of state of South America held a summit in Guayaquil, Ecuador. Brazilian President Fernando Henrique Cardoso lamented US "unilateralism" and added in reference to the FTAA that "so far, the signals coming from the most important governments to the north �� have been signals of restriction." Cardoso was referring to the passage of the recent US farm subsidy law and restrictions on steel imports. Ecuadorian President Gustavo Noboa echoed these remarks, adding, "It is clear that global trade benefits some, but not others." The president of Peru, Alejandro Toledo, called for a major lending program to help Latin American democracies. Six of the 10 presidents in attendance in Guayaquil will be leaving office within months and in some cases, notably Brazil, leftist candidates may win the upcoming elections. Their commitment to the FTAA may be less vigorous. Over the past year, the international trade picture has been characterized by more attention to actual or rumored bilateral free trade negotiations than to progress or lack thereof in the FTAA. TPA authority may give the Bush administration the boost it needs to conclude the US-Chile FTA negotiations. The major issues stalling progress are the inclusion of labor and environmental issues as part of the agreement and, of course, agriculture. The five Central American countries (Belize and Panama could join later) have asked for an FTA, and meetings have been held to talk about trade issues and possible FTA negotiations. Due to its strategic importance, an FTA with Central America enjoys a strong measure of support in the administration and on Capitol Hill. Other countries, such as the Dominican Republic, Uruguay and Colombia, have mentioned interest in their own US FTAs. Most recently, President Elect Gonzalo S�nchez de Losada of Bolivia told the press that he also would seek a bilateral agreement. Although all of these suitors have been received politely by the USTR, there seems to be little enthusiasm now for pursuing these possibilities. As to whether FTAs with Chile and the Central Americans could diminish the drive toward a hemispheric agreement, the USTR insists they are part of a coherent strategy and consistent with the goal of the FTAA. Meanwhile, the negotiating process of the FTAA have ground on, but not without sputters. At two recent Trade Negotiating Committee (TNC) meetings, the market access negotiating group has been rumored as papering over differences. An agreement appeared to have been reached at the TNC meeting in Margarita, but at the last moment the Caribbean negotiators stated their reservations. Another meeting in Panama failed to resolve problems of deadlines for offers, tariff rates and the modalities of negotiation. The deadline for offers will in any case pass before the end of the year. Perhaps TPA will help move things along at the next TNC meeting in the Dominican Republic in August. Observations It is still too early to make any predictions, but one can't help but be a bit more hopeful about the prospects for the FTAA and the basing of the permanent FTAA Secretariat in Miami. As the Miami Herald editorialized, "The dual goals of finalizing the pact by 2005 and luring the FTAA Secretariat to South Florida now appear within reach." Finally, the South Americans, especially the Brazilians, must now take a hard look at their own positions. Before TPA, it was easy for them to criticize the US as the cause of a possible breakdown in the FTAA and to talk of American protectionism while ignoring their own safeguards for domestic goods and services. An objective analysis must now be made of what each country can negotiate away in terms of protection. Unfortunately, this must occur in an economic context that is steadily worsening for most countries. Miami Herald -
www.ustr.gov -
www.sipiapa.org - US Department of State -
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