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Mixed signals, weakness in Congress undercut push for FTAA.

WASHINGTON -- Mixed signals from the Bush administration are muddling the effort to negotiate a hemisphere-wide free trade agreement by 2005.

Just weeks after broad smiles and confident statements in Quebec that the effort to negotiate the Free Trade Area of the Americas (FTAA) was on the fast track, numerous questions have emerged about whether the US government has the support of Congress for the project, and the degree to which the administration really supports the project.

However, despite public expressions of support for regional free trade, the Bush administration has undercut its own position. US officials have told just about anyone who will listen that if the FTAA is delayed, the United States would instead opt to negotiate bilateral trade agreements with countries in the region, just as it is attempting to do with Chile now.

In fact, the White House has told Argentina that it would likely negotiate a bilateral trade deal with Argentina quickly if the FTAA becomes stalled. Other countries in the region also have been approached.

The problem with this approach is that it appears to give countries that are reluctant to commit to the FTAA, most notably Brazil, a veto over the entire process. Any country opposing the regional accord can simply refuse to go along, thereby bringing the whole process to a halt. The other country that potentially could be an obstacle is Venezuela, where the nationalist government of President Hugo Chavez has agreed to participate in the process, but also expressed serious misgivings about the benefits of free trade.

In addition, some countries may decide that they will get a better deal through bilateral talks than through a regional accord. Bush administration officials discount this, saying that the bilateral accords would be negotiated from a common template. However, some countries clearly are in a better position to demand concessions than others. For example, as a major supplier of oil and fuels to the United States, Venezuela's importance as a trading partner exceeds than of some of the Andean nations. The US's growing involvement in Colombia also would seem to suggest that country could receive favorable treatment in negotiating with Washington. The large size of Brazil's market also puts it in a stronger position to demand concessions than, say, Guyana.

Insisting on sticking to the terms of a common template agreement would make little sense as each country sits down to talk with the United States. Many could make a good case that their unique situation entitles them to different treatment. Plus, negotiating bilateral accords with more than 30 countries and overseeing the implementation of each would take years. In addition, the bilateral accords would have to incorporate common standards and terms that each signatory would respect with regard to all other parties to bilateral accords with the United States. Otherwise, the system would fail to encourage trade among the countries in the region and instead just foster commerce with the United States.

While these mixed messages have created uncertainty as to the US commitment to the FTAA, there is even more doubt about whether President Bush will even have the authority to oversee the negotiation of a regional trade agreement.

Bush has lobbied loudly for trade promotion authority, or what used to be called fast track. This authority, which expired under the Clinton administration, gives the president the right to negotiate trade agreements without subjecting them to congressional changes. Congress must vote up or down on the entire trade agreement. Without it, members of Congress can add amendments to trade bills that the president then must go back and sell to parties to the accords.

While FTAA talks are going on without this authority, all analysts agree that the complex agreement that will likely emerge and the sometimes painful sacrifices it will entail require trade promotion authority. Without it, the agreement will be subject to the intense lobbying process in Washington in which domestic interest groups would try to insert amendments protecting their particular interest.

But the prospects for Bush securing trade promotion authority are uncertain. President Clinton lost the authority in part because he could not convince members of his own Democratic party to support it. Those members of Congress remain opposed to fast track unless the president agrees to include labor and environmental standards in any accord, a position Bush adamantly opposes. In a narrowly divided Congress, Bush also is having trouble convincing enough members of his own party to support fast track.

Observers in Washington say that they believe Bush could push the measure through Congress if he is willing to engage in a concerted effort and expends enough political capital to win over doubters. However, as yet, the White House effort has largely been confined to a few public comments in favor of the measure and some behind-the-scenes fact finding. It remains to be seen whether regional trade is a big enough priority for the administration to prompt it to launch the kind of campaign that is needed to secure the missing votes in Congress. Sixty one senators already are on record as opposing any agreement that weakens US trade or commercial laws, especially dumping statutes, which a number of Latin American countries - Brazil in particular - oppose.

The Bush administration needs the support of labor unions to win approval of its energy policy, but the AFL/CIO, the nation's biggest union, is adamantly opposed to the FTAA, which may force Bush to decide which measure he wants more.
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Title Annotation:trade policy, United States
Publication:America's Insider
Article Type:Brief Article
Geographic Code:1USA
Date:May 17, 2001
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