The Miami Herald
Tuesday 29 April 2003
MIAMI -- Anti-American sentiment in wake of the war in Iraq, fused with the harsh winds of strained international relations, is pounding the once-ambitious global-trade agenda.
In recent days, Washington has signaled its displeasure with Chile's antiwar stance by delaying the planned April signing ceremony of a U.S.-Chile trade agreement.
The Brazilian press is reporting that diplomats expect the proposed Free Trade Area of the Americas to miss its 2005 deadline, perhaps for years, even as Miami's trade community is gearing up to host a regional trade ministers meeting in November.
And difficult negotiations for a round of multilateral trade and investment liberalization have been buffeted by new waves of transatlantic discord, throwing into question the success of a World Trade Organization summit scheduled for September.
Even the bright spots have clouds. U.S. trade officials say negotiations for a Central American Free Trade Agreement is on target to be wrapped up by the end of the year, but, two weeks ago, trade negotiators meeting in San Salvador were greeted by protesters shredding the American flag and waving Iraqi and Salvadoran banners.
And on top of the political issues is the threat of SARS, severe acute respiratory syndrome, which has grounded U.S. executives, accustomed to frequent flying to southern China to inspect products coming off America's newest factory floors there.
So far, SARS is just a disruption, but months of travel bans could severely strain far-flung supply chains.
"SARS reflects what happens when the world becomes such a small place," said Sophia Murphy, trade program director at the Institute for Agriculture and Trade Policy in Minneapolis.
But, even without SARS, the U.S. war on terrorism and the growing distance with key European allies have combined to undermine global-trade talks, analysts say.
"My view is that the Western security alliance is broken," said Gary Hufbauer, a senior fellow at the International Institute for Economics. "It may be papered over but not fixed. All the economic institutions grew up under this umbrella of common security concerns. Now these economic-cooperation institutions have to stand on their own."
Trade ministers from the 146 member nations of the WTO are slated to gather in Cancun, Mexico, in September to showcase advances on brokering rules to liberalize trade and investment, a series of negotiations known as the Doha round.
Some of the big decisions were supposed to be behind them, but WTO members have missed four negotiating deadlines on issues including agricultural negotiations, trade-related aspects of intellectual-property rights and the promised access for poor countries to inexpensive medicines like AIDS drugs, implementation issues and special treatment for developing countries.
Washington and Paris must now try to see eye to eye on issues like reducing agricultural subsidies after France tried to block the U.S.-led war in Iraq and Defense Secretary Donald Rumsfeld dismissed the opposition as the "old Europe."
Aware of the public-relations problems stemming from failed talks, WTO officials are trying to lower expectations for the Cancun meeting. In December 1999, trade negotiators faced the biggest confrontation of the past century on trade when protesters disrupted the WTO meeting in Seattle. That meeting ended in failure, as negotiators could not agree on launching a new round of negotiations.
Just after the Sept. 11, 2001, terrorist attacks in New York and Washington, U.S. Trade Representative Robert Zoellick argued to a world in shock that global cooperation was the antidote to terrorism, and he managed to thrash out a consensus on launching a new round of trade talks.
Promising the poorer countries of the world that this round would bring real progress, negotiators named the Doha round the "development round."
The issues raised in the Doha round directly affect negotiations for a Free Trade Area of the Americas, a proposed trade agreement among 34 nations in this hemisphere that has a similar 2005 deadline.
At a recent regional trade ministers meeting in Quito, Ecuador, negotiators made no major breakthroughs on deep gulfs over market access, agricultural tariffs and subsidies and other divisive issues.
Gaceta Mercantil, a Brazilian daily, recently reported that Brazilian circles in Washington see holdups in WTO talks delaying the conclusion of FTAA talks until 2007.
The talks with Central American countries reflect Washington's desire to show results in the hemispheric trade talks. Grant Aldonas, the Commerce undersecretary for international trade, recently reflected on the lack of FTAA progress when he told U.S. textile manufacturers at a Coral Gables, Fla., meeting: "The only countries that are likely to show up are the ones already in the CAFTA process."
The most ardent supporters of trade deregulation - the drive to remove tariffs, rules and barriers that hamper moving capital and goods around the world - insist that countries will find ways to cooperate and that all previous trade rounds were beset by such difficulties.
"Most of the issues that account for the slow work going on within the WTO have to do with issues that predated the Iraq conflict," said Calman J. Cohen, president of the Emergency Committee for American Trade, a trade group in Washington.
"Ways will be found to work on trade issues that seem insurmountable now."
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