[mgj-discuss] remarkable Wash Post article--Multinationals vs. Protesters: 1-1

[David Levy]

a remarkable article.  usually blustein ignores the protests and civil society and only reports what happens on the inside.  this is arguably the most truthful article i've ever seen him write.  and not *once* did he use the word "protectionism"!

music to a protester's ears:  "This is not what we wanted, and we have serious concerns," said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

la lucha continua!

--d.

http://www.washingtonpost.com/wp-dyn/articles/A1904-2003Nov20.html

Trade Pact Advances in Miami
Framework for Americas Less Than Had Been Envisioned

By Paul Blustein
Washington Post Staff Writer
Friday, November 21, 2003; Page E01

MIAMI, Nov. 20 -- MIAMI, Nov. 20 -- Top officials from the United States, Canada, Latin America and the Caribbean agreed Thursday on parameters for a free-trade zone in the Western Hemisphere. But they bridged vast differences with fuzzy language suggesting that the trade pact will be much less ambitious than initially conceived.

Ending their gathering a day earlier than scheduled, ministers from 34 countries maintained that they had taken a significant step toward forging a "Free Trade Area of the Americas," an important goal of President Bush's.

"We're at the point where we're negotiating an ALCA, not just seeking it," said U.S. Trade Representative Robert B. Zoellick, using the Spanish acronym for the FTAA. Brazilian foreign minister Celso Amorim, who co-chaired the meeting with Zoellick, contrasted the outcome with the breakdown of global trade talks in Cancun, Mexico, two months ago, saying, "Today we can be very happy that we have reached a common result."

But the declaration, a vaguely-worded compromise between the clashing positions of the United States and Brazil, indicated that the FTAA has undergone a substantial alteration since talks were initiated nine years ago. The original plan would have essentially extended the North American Free Trade Agreement all the way south to Tierra del Fuego, but the declaration envisions a watered-down accord in which member countries can pick and choose how far they want to go in making their economies appealing to multinational companies.

As a result, even though protesters outside the heavily-guarded downtown perimeter were denouncing their governments for acting on behalf of corporate interests, anti-trade activists were jubilant at the conclusion.

"Today's outcome turns the FTAA into a hollow shell of an agreement," said David Waskow, a trade policy analyst with Friends of the Earth, which has opposed many trade pacts on the grounds that they protect foreign firms at the expense of environmental standards. "It is a clear rebuff to U.S. business lobbies that had insisted on a wall-to-wall deal."

The delight of activists like Waskow was matched by gloom among U.S. business representatives, who said they would insist on a much more far-reaching FTAA than the one outlined in the declaration but were glad that negotiations were continuing.

"This is not what we wanted, and we have serious concerns," said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers. "But the alternative, allowing the talks to collapse because a way could not be found to bridge the gap with Brazil, would have been a disaster for all."

Talks to establish the FTAA were launched in 1994 at a summit here hosted by President Clinton during the height of enthusiasm about the rewards countries could reap by opening their markets and adopting U.S.-style rules of global capitalism. Congress had just approved NAFTA, linking the U.S. economy with Canada and Mexico, and Washington proposed a similar pact for the rest of the countries in the hemisphere, except Cuba, to be completed by early 2005. Using NAFTA as the model, U.S. policymakers and businesses were seeking not just the elimination of tariffs and other barriers to the flow of goods among member nations, but agreement on a series of codes securing property rights for foreign investors, protecting copyrights and patents, and other goals important to companies establishing operations abroad.

But sluggish growth, combined with a number of severe financial crises, set back the free-market cause in the region and brought left-wing governments to power, notably in Brazil, whose economy dominates South America. Brazil has led the opposition to a NAFTA model for the FTAA, arguing that the deal should focus narrowly on increasing trade among member nations rather than on matters such as intellectual property rights and investment codes.

Anxious to avert a repetition of the breakdown in Cancun, when Brazil led a bloc of developing nations confronting Washington over the terms of a global trade accord, U.S. and Brazilian officials crafted a document that fudges how broad and deep the FTAA will be. "Negotiations should allow for countries that so choose, within the FTAA, to agree to additional obligations and benefits," the declaration states.

In effect, that means countries like Costa Rica and El Salvador could accept a full-blown, NAFTA-style set of commitments as they evidently prefer, while Brazil could stick with its stated intention to make only limited changes in its economic system. . It's unclear whether Brazilian exports would enjoy the same freedom of access to the region's markets as other countries' exports; that contentious issue has been left for negotiators to continue haggling over.

The result is almost as great a source of gratification to the anti-free trade activists as the debacle in Cancun. Lori Wallach, executive director of Global Trade Watch, a group affiliated with Ralph Nader, said the ministers had "punted all of the hard decisions" to keep the meeting from being "the Waterloo of FTAA." The United States, she said, "was forced to choose between no FTAA and FTAA-lite."

Administration officials disputed suggestions that they were agreeing to an FTAA-lite, or as others have called it, a "buffet" or "FTAA a la carte."

"People have used various food metaphors," Zoellick said in remarks opening the ministerial meeting Thursday morning. "I view this as a nine-course, sit-down dinner. But countries are still considering the appetite they have for each serving."A U.S. trade official briefing reporters noted that negotiations will continue in coming months, and using yet another food metaphor he suggested that Washington has no intention of giving Brazilian exports the same access to U.S. markets as other member countries' goods unless Brazil changes its tune. "At the end of the meal, everybody has to be satisfied that the partner next to them ate enough Brussels sprouts to get the chocolate sundae," he said.

The activists are by no means completely happy with events in Miami, because Zoellick has announced plans here to launch NAFTA-style free-trade deals with several Latin American countries on a bilateral basis, including Colombia, Peru, Panama, Ecuador and Bolivia. Those would come atop talks already underway with five Central American nations, and the U.S.-Chile pact that was finalized earlier this year. Critics contend that the poor labor and environmental standards in many of these countries make them unfit to be free-trade partners, and they vow to fight in Congress against the administration's plans.

The bilateral accords are small potatoes compared with a deal encompassing the much bigger Brazilian market. But U.S. officials and business representatives are betting that the bilateral pacts will help prod Brazil into a more accommodative position on the FTAA, by showing that factories and jobs will otherwise go to other countries.

"U.S. investment in Brazil has been declining, and if surrounding countries come up with better investment and trade regimes, that will have a [further] impact on investment in Brazil," said the NAM's Vargo

That argument, though echoed by some Brazilian business leaders, drew a dismissive retort from Amorim at a news conference Wednesday. "Brazil for several years was the second largest receiver of foreign investment in the world, only after China," he said.

U.S. officials pointed out that the outcome in Miami shows how far Brazil's president, Luiz Inacio Lula da Silva, has come toward accepting the FTAA since he denounced it as a form of U.S. "annexation" during his campaign. But Sarah Anderson, a fellow at the left-leaning Institute for Policy Studies, said a better historical comparison is with the original FTAA summit.

"I was here in 1994, and there were no protests, no fighting; it looked like the FTAA would be a cakewalk," she said. "Today the atmosphere is completely different. It's very empowering."

© 2003 The Washington Post Company