Roberto: Una nota sobrelo que se negociara en Santiago; buenos datos sobre bloques comerciales al final. Tom ----- Leaving Big Brother's Shadow: Latin Nations Confront U.S. as Equals at Americas' Summit By Anthony Faiola and Steven Pearlstein Washington Post Foreign Service Thursday, April 16, 1998; Page A01 As President Clinton lands today in Santiago, Chile, for the second Summit of the Americas, he'll be in a decidedly different position from that of previous visiting U.S. presidents. Suddenly, not only is Uncle Sam speaking softly in these parts, but he's carrying a small stick. More than any other issue on the table here this weekend, the quest to create a Free Trade Area of the Americas from Alaska to Tierra del Fuego by 2005 underscores the new, more equal relationship forming between the United States and Latin America. In developing a format for talks aimed at creating the world's largest free-trading bloc -- the details of which, including meeting dates and interim deadlines are to be announced this weekend -- the United States has granted significant concessions to its negotiating partners. In essence, to keep the process moving, Washington bowed to a number of demands made by the Latin nations, especially Brazil, an industrial powerhouse with an economy larger than Russia's. The event that brought this about -- congressional rejection of "fast track" legislation that would have granted Clinton sweeping powers to negotiate free-trade agreements -- may have given an important psychological boost to the idea of hemispheric free trade, analysts say. Latin Americans, who historically had felt bullied or ignored by the powerful United States, realized that U.S. officials would be coming to the negotiating table in a significantly weakened position -- one that could be turned to their advantage. "Latin America is unifying and strengthening, and there is a sense they will no longer allow themselves to be forced into anything" by the United States, said Jan Heirman, an official with the U.N. Economic Commission for Latin America and the Caribbean in Santiago. "They feel they are coming at this from a position of strength." The format for the 33-nation summit reflects that reality. No longer are the countries of Latin America lining up, in effect, to negotiate individually with the United States about joining Canada and Mexico in an enlarged North American Free Trade Agreement. Instead, these talks will be multilateral, with the United States just one player and other countries free to participate individually or as blocs. In one noteworthy concession, the United States also dropped its insistence that any agreements reached early in the process be locked up in preliminary treaties, even as broader talks continue on more difficult issues. Instead, the entire agreement must be considered as a single package -- a formula that the Latin Americans believe will give them greater leverage in the final stages of negotiations. The United States also agreed to formation of a committee to deal strictly with agriculture, something it opposed in the past. The result, although still only a framework for negotiations, illustrates an extraordinary maturing of U.S.-Latin relations through the prism of free trade, analysts say. Symbolically, it brings a respite to the perception of Uncle Sam as Big Brother to this part of the world. "The situation is obviously different now" than at the first Americas summit in Miami, Chilean President Eduardo Frei said in an interview this week. He suggested that Latin America would proceed toward economic integration with or without the United States. "We are going to launch the movement to reach this accord by 2005," Frei said. "And we are agreeing with the Clinton administration to advance [the process in talks with the United States], but their domestic problem [of fast track] is going to have to be resolved along the way. Regardless, the integration process is now practically impossible to stop." U.S. officials maintain that they have yet to give in to the Latin Americans on anything concrete and that procedural concessions were necessary to win acquiescence for creation of a special study group to consider social, environmental and labor issues. Those issues are at the heart of opposition to free trade among congressional Democrats and were the sentiments that derailed fast track on Capitol Hill late last year. U.S. trade officials say that without ensuring some mechanism for interjecting those issues into the trade talks -- even one as nebulous as a study group -- there was little chance that Congress would endorse a hemispheric free-trade pact. "We have a moment to establish a general partnership based on mutual trust and respect," Thomas "Mack" McLarty, the White House special envoy for the Americas, said of the pending talks. But "at some point, you certainly need to shape it and advocate U.S. interests." The United States and Latin America are moving toward a free-trade compact for distinct reasons. For the United States, a pole-to-pole free-trade zone would give it preferential access to the region's fast-growing markets and economies. Latin business leaders, noting the recent economic troubles in Asia, have put themselves forward as an attractive alternative market for goods and a good place for investment. The United States has watched, meanwhile, as individual Latin nations have decided not to wait for Washington to leap aboard the free-trade train. Chile, for instance, has struck bilateral accords with Canada and Mexico -- the United States' partners in NAFTA -- which have given those two countries a leg up in dealing with the most technologically advanced nations in Latin America. >From 1990 to 1996, overall trade doubled in Latin America to $493 billion, according to the Inter-American Development Bank, with the spoils being shared largely within new Latin American trading blocs -- the largest being Mercosur, which encompasses Brazil, Argentina, Paraguay and Uruguay, and represents nearly two-thirds of the region's overall trade volume. For Latin America, the primary benefit would be increased U.S. investment and, for consumers here, cheaper, high-quality American goods on store shelves. Such nations as Argentina, Chile and Peru are eager for the kinds of benefits that came to Mexico as a result of the NAFTA agreement, including new jobs and high-tech factories built with U.S. corporate dollars. Indeed, NAFTA is credited by the Mexican government not only with boosting trade between Mexico and its mammoth trading partner to the north, but with helping it cultivate trade with partners elsewhere around the globe. "It has put Mexico on the radar of other countries that wouldn't have had the incentive to be here," one Mexican official said. But there are forces in Latin America that oppose the idea of dropping trade barriers, in countries both big and small. In large nations, such as Brazil, domestic companies that have long enjoyed a captive marketplace do not want to surrender their advantage to U.S. competition. In small countries, especially Caribbean island nations, the threat is even greater, since their economies of scale generally make local manufactures far less competitive then their American counterparts. There is resistance on some negotiating issues in the United States as well, chiefly arising from labor concerns. Thea Lee, the assistant director for public policy at the AFL-CIO, says, for example, that the hemispheric trade committee on labor issues may be no more than political window-dressing aimed at appeasing Democrats in Congress. "Our view is that this could be a positive step if it turns out to be a steppingstone to have the concerns of labor and environmental groups reflected in the final agreement," said Lee. "But it is not acceptable if all we get is a committee and nothing more by way of results. Our sense, frankly, is that the Latin American ministers still have great hostility to considering worker rights and workplace safety issues." At this point, a hemispheric free-trade zone is still far from a reality; only procedural architecture has been agreed upon, and implementation could take 15 years or more. Still, as worked out by trade ministers at a meeting last month in Costa Rica, overall supervision of the process will be delegated to one country on a rotating basis, starting with Canada and winding up with the two major antagonists, Brazil and the United States, as co-presidents. It's at that point that Washington will be playing rougher. But by then, the United States must have fast-track legislation to stay in the game, experts say. Yet there are no moves currently afoot at the White House or in Congress to reintroduce such legislation this year, and congressional leaders say there is no likelihood of such a move this year. "You've got to understand that this deal will [still] require huge concessions by Latin American countries, involving very big political risk," said Jeffrey Schott, a senior fellow at the Institute for International Economics in Washington. "But they are going to be unwilling to put their best offers on the table and take those risks if they sense that an agreement will eventually be rejected or amended by the Congress." Faiola reported from Santiago, Pearlstein from Washington. Correspondent Molly Moore in Mexico contributed to this report. A United Hemisphere? The Second Summit of the Americas opens today in Santiago, Chile, and the main point of discussion among the 33 nations are details for creation by 2005 of a Free Trade Area of the Americas stretching from Alaska to Tierra del Fuego. Here is a look at the trading blocks now in effect, their strengths and trade volume with the United States. NAFTA established 1994 North American Free Trade Agreement Members: Canada, Mexico, United States Population: 390 million GDP: $8.6 trillion Total intra-group trade in 1996: $43.7 billion CARICOM established 1973 Caribbean Community and Common Market Members: Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago Population: 6 million GDP: $30 billion Total intra-group trade in 1996: $841 million Group's trade with U.S. in 1996: $10 billion CACM established 1961 Central American Common Market, Members: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua Population: 31 million GDP: $76 billion Total intra-group trade in 1996: $1.6 billion Group's trade with U.S. in 1996: $13 billion ANDEAN GROUP established 1969 Members: Bolivia, Colombia, Ecuador, Peru, Venezuela Population: 104 million GDP: $483 billion Total intra-group trade in 1996: $4.8 billion Group's trade with U.S. in 1996: $32 billion MERCOSUR established 1991 Southern Cone Common Market Members: Argentina, Brazil, Paraguay, Uruguay [Tom's note: Chile and Bolivia are associate members] Population: 204 million GDP: $1.2 trillion Total intra-group trade in 1996: $17 billion Group's trade with U.S. in 1996: $30 billion SOURCES: Inter-American Dialogue, Commission for Latin America and the Caribbean, World Almanac, Political Handbook, World Bank © Copyright 1998 The Washington Post Company Tom Kruse / Casilla 5812 / Cochabamba, Bolivia Tel/Fax: (591-42) 48242 Email: [EMAIL PROTECTED]
