Free Trade at the Crossroads

Escalating tensions between the Bush administration and several of its most important South American partners in negotiation of a Free Trade Area of the Americas (FTAA) have fueled warnings in the regional press that the initiative is at serious risk of coming unraveled. On the eve of a November summit of FTAA negotiating teams in Miami, correspondent Andrés Oppenheimer cautioned in La Nación of Buenos Aires (Nov. 4) that President Bush’s top Latin American advisers are pursuing a “tough love” policy.

“The United States will continue assisting the region through the planned Free Trade Agreement of the Americas,” Oppenheimer reported in describing the hard line set out by State Department Latin America specialist Roger Noriega. “But none of that will work if countries do not do more to strengthen their laws, eliminate corruption,...and resist anti-capitalist half-truths that do nothing but encourage backwardness.” But “tough love in itself is not going to help much,” Oppenheimer added, if the U.S. government refuses to “reduce scandalous agricultural subsidies that are hurting Latin American exports.”

Debate has been especially heated in Brazil, which provoked Washington’s irritation when the government of Luiz Inácio Lula da Silva vigorously criticized U.S. agricultural subsidies as a barrier to trade liberalization. Clovis Rossi argued in Folha de São Paulo (Sept. 23) that U.S. Trade Representative Robert Zoellick had issued “an open declaration of war against Brazil” when he said in an op-ed piece in London’s Financial Times that the United States was prepared to proceed with free-trade agreements even if Brazil opts out of the FTAA talks.

São Paulo’s Veja (Oct. 15) reported that Lula was seeking to avoid future “misunderstandings” over Brazilian trade policy by overhauling the country’s negotiating team to include more technical experts, recognizing that “foreign relations...have become too serious and complex to be left solely in the hands of the diplomats.” The cover story, co-authored by Eurípedes Alcantara, Eduardo Salgado, Maurício Lima, and Ronaldo França, argued that Brazil stands to lose far more than it would gain by boycotting the FTAA, risking erosion of its already meager 0.89-percent share of total world trade. “It would also have to say goodbye forever to its deserved political leadership role on the Latin American continent,” Veja said.

The Uruguayan government’s position on FTAA, published in ABC Color (Nov. 2), held that “this undertaking will be considered just and balanced only to the extent that export subsidies...are eliminated for agricultural products.” São Paulo’s Carta Capital (Oct. 29) derided U.S. negotiators for attempting to drive a wedge between Brazil and Argentina. “Washington does its cause little good by attempting to paint its FTAA critics as ‘anti-American.’ ” Carta Capital added: “The Yankee proposition is more or less as follows: ‘How is it possible that a normal human being could not recognize the excellence and generosity of the American positions?’ ”