What appeared as an interruption of the Puebla meeting held in February
finally seems to have been a failure. Several informal meetings, oriented
to facilitate the conclusion of the second part of the meeting were unsuccessful.
What is certain is that the FTAA negotiations are facing difficult times.
Hardly anyone believes today that the negotiations will conclude at the
end of this year, as was originally foreseen. Perhaps this demonstrates
that not all countries involved have obtained enough domestic support
to undertake the kind of commitment necessary to commit to the FTAA in
the terms set out in Miami in 1994. It may also mean that the architecture
outlined in Miami last November was overly ambitious, as was the original
June 2005 appears now as a reasonable time to conclude negotiations.
Three reasons allow us to expect it, even though some analysts consider
it too optimistic.
The first reason is that a sensation of movement rather than paralysis
could be perceived in Geneva, at the end of the recent meetings on the
agricultural issue. It seems possible to obtain substantial progress,
and even to conclude the WTO negotiations, if not at the end of this year
at least by the middle of next year. The steps taken by the negotiators
between now and June could eventually confirm this relatively more optimistic
The second reason is that, once the elections in the United States are
over, the hemispheric negotiations could receive a new political push.
Such a push appears to be fundamental to insert the negotiations within
the framework of the necessary strategic vision, which to date seems to
be missing. The preparation of the next summit of the Americas could offer
the opportunity for the insertion of trade negotiations within a wider
strategy, in accordance with the profound political challenges observed
today, especially in South America.
And the third reason is that, in all likelihood, all the principal actors
would like to see negotiations progress before the expiration in mid-2005
of the present mandate given by Congress to the President of the United
States through the Trade Promotion Authority. Many analysts consider that
an extension would only be possible if the negotiations at the WTO and
the Hemisphere were well oriented and at an advanced stage.
But recent failures in the FTAA negotiations have made a basic problem
obvious. More than a question of terms it seems to be a question of direction.
The belief that strategic objectives had been established for good, first
in Miami in 1994 and then again in November last year, now seems unfounded.
Which objectives are sought? What is the imaginable and possible architecture
for hemispheric free trade? How can it be achieved in a reasonable time
frame? Is it possible to combine within the same framework such different
interests and realities, such as on one hand the largest world economy
and on the other hand, for example, Haiti?
There is a reality that cannot be ignored. An ample network of preferential
agreements between almost all countries throughout the Americas already
exists. The agreement between Mercosur and the Andean Community, and the
possible agreement between the United States and the Andean countries,
would practically complete it. A significant exception is, precisely,
the one that should be faced as a priority: that of Mercosur with the
It is perhaps time to state the essential, and within FTAA it is already
clear that an understanding between Mercosur and the United States is
essential. It is the missing part in the continental puzzle. It should
have been obvious from the beginning of the process. Perhaps not admitting
it shows a lack of practical sense, particularly on the part of U.S. negotiators.
Perhaps when FTAA was first envisioned, the fact that there has never
been a unique pattern in the history of regional preferential agreements
was disregarded. There are only precedents and the need to fit an agreement
within the very lax framework of GATT's Article XXIV of 1994 and GAT's
article V. Each agreement has been tailored according to the realities
involved. The free trade agreement between the United States and Australia,
that does not include the possibility for investors to have access to
the investment dispute-settlement mechanism, is an example.
Perhaps if the "4 + 1" negotiation was faced directly, as was
the original idea of Mercosur, it would move in the direction of hemispheric
integration. It would imply an acceptance by the United States of the
political value that the consolidation of the strategic idea of Mercosur
may have in South America.
Should this approach prevail, a format similar to the one prevailing
in the Mercosur-European Union negotiation could be the result. That is,
a free trade agreement consistent with the commitments assumed at the
WTO that would open the way to additional negotiations that would allow
the broadening of the stock of preferences and rules in light of the Doha
Simultaneously with the conclusion of the first stage of the "4
+ 1" agreement, other multilateral agreements oriented to the convergence
of the preferences and rules included in the present free trade hemispheric
network could be negotiated. For example, an issue - among others - that
would require hemispheric convergence would be rules of origin.
Following this realistic methodology, the objectives originally foreseen
for FTAA could be gradually achieved in approximately ten years. It would
not be the ideal route but it would be a possible and reasonable one.
A failure to progress in hemispheric free trade does not seem to benefit
anyone. In particular, it would not favor an atmosphere of cooperation
among all the countries of a region that is facing increasing political