Stakes, obstacles significant at Miami hemispheric summit

The Miami Herald ^ | 11/9/2003 | JANE BUSSEY

[Luis Gonzalez]

Trade ministers will seek to fashion an accord out of discord and create a free-trade zone for the Americas -- and the challenge is daunting.

Miami rolls out the red carpet next week for an international gathering of trade luminaries responsible for charting the creation of a free-trade zone that would cover the New World.

Converging at this pivotal moment for the proposed Free Trade Area of the Americas will be trade ministers representing 34 nations, along with hundreds of aides and as many as 1,000 business executives, academics and analysts.

Also expected are an estimated 20,000 protesters: environmentalists, trade-union members, consumer activists and students -- many of them seasoned veterans of the antiglobalization fight.

Miami police also predict the arrival of groups that are more radical, but these organizations rarely announce their plans.

Miami political and business leaders hope to see the city shine during the Nov. 20-21 hemispheric trade ministers meeting, cementing its ambition to become the permanent home for the secretariat that would run the FTAA.

But the Miami trade summit is occurring as the United States and Brazil, the two largest countries involved, are at odds over the scope of an accord.

MAKE OR BREAK

''For the demonstrators and concerned civil society, this is the next important stop on the antiglobalization trail,'' said Carl Cira, director of the Summit of the Americas Center at Florida International University. ``For the others, this is an important appointment that will arguably make or break the FTAA.''

Despite the U.S.-Brazilian friction, it's full speed ahead for the negotiations.

The proposed FTAA would mean that tariffs, the taxes and fees paid when goods cross borders, would drop to zero over time. Other barriers, such as rules over food handling and pesticide levels, would be standardized. Proponents say industries would become more efficient, consumers would enjoy lower prices, and overall trade would grow -- in short, everyone wins.

FLOW OF GOODS

''Any time trade barriers are reduced, that allows goods to flow from country to country,'' said Stephen Flowers, president of UPS Latin America. ``We're fully in favor of an agreement that allows the taking down of barriers and the movement of goods.''

Detractors castigate the trade pact as an assault on labor, the environment and democracy -- especially because broad, new trade-related rules could override existing state and local laws.

''Our objections in three words -- democracy, jobs and the environment,'' said Eric Rubin, state coordinator of the Florida Fair Trade Coalition, which will protest in Miami.

``For the first time, corporations would be in a position where they have the ability to supersede local, state and national laws.''

As with all trade agreements, the effects of a proposed FTAA would cover many big issues whose reach can touch close to home.

WHO WANTS WHAT

The developing nations of Latin America are pushing for access to U.S. agricultural markets. Brazil wants cuts in tariffs on its citrus concentrate. Argentina wants more access for its beef.

Washington wants the region to offer more protection for intellectual property by cracking down on piracy of Hollywood movies or copying of CDs.

It wants U.S. banks, insurance companies and other services to enter foreign markets with fewer rules and less red tape.

The journey toward a free-trade agreement started nine years ago, when Miami hosted the presidential Summit of the Americas, celebrating the region's resurgent democracies and newfound embrace of free-market economics. The meeting culminated with the announcement that the 34 nations of the hemisphere, all except communist-ruled Cuba, would seal a free-trade accord by the start of 2005 as their top-priority goal.

Financial crises, frayed democracy and most recently mounting regional differences over trade have clouded this original vision, but no country has backed away from the pursuit of an agreement.

Crafting such an ambitious treaty is a monumental task.

There is friction over what should be on and off the table.

All told, there are about 5,000 brackets -- each one a disagreement -- in the hundreds of pages of drafted text.

One example: Florida's citrus and sugar industries have warned that lower tariffs would devastate them. In another case, U.S. trade officials have rebuffed calls for discussing farm subsidies, a staple of powerful U.S. agricultural interests.

Foreign countries also take umbrage at U.S. antidumping laws, which allow domestic industries to seek protection from below-cost foreign goods.

Brazil, in turn, wants to protect its service industries -- such as banks and insurance companies -- from being opened to foreign competition.

It also doesn't believe that greater protections for intellectual property, such as computer software, should be achieved through the FTAA.

SECONDARY ISSUES

Behind big issues such as those are innumerable smaller ones.

Examples:

• Would foreign companies be allowed to challenge minority set-aside programs as discriminating against international competitors? The trade pact could open the door to such disputes.

• Would private corporations be allowed to sue governments directly when the companies feel cheated out of potential profits by local laws? Such challenges are allowed under the North American Free Trade Agreement, which covers the United States, Mexico and Canada.

But one of the biggest hurdles for negotiators is protecting small, fragile economies from being overrun by the business giants.

Huge disparities separate nations in areas like wage rates, environmental standards, workplace rules and social safety nets.

Also, the size and affluence of the FTAA countries vary widely, from tiny Dominica to the United States and Brazil. It's a wider range of differences than is found among countries in the world's biggest trade alliance, the European Union.

DAUNTING CHALLENGES

''The challenges of integration in this hemisphere are so much more daunting than in other experiences because of the asymmetries among countries and within countries,'' said Robin Rosenberg, deputy director of the University of Miami's North-South Center. But Rosenberg, a supporter of free trade, considers the effort worth it, because trade is ``the most powerful force for integration in the world.''

Rosenberg and other proponents of free trade say now is the time to forge ahead.

''Trade is no panacea,'' said Eric Farnsworth, vice president of the Council of the Americas, a business group that strongly favors free-trade agreements. But ``on balance, trade brings more benefits than losses.''

Miami's leaders hope to benefit from an FTAA secretariat, which would create a prestigious bureaucracy that would boost Miami's role as the business hub of the Americas.

Some local FTAA critics say they have no dispute with the city's efforts, since it's natural that local leaders would view the secretariat as an economic engine. Their dispute is with this type of trade agreement.

Said Gihan Perera, executive director of the Miami Workers Center: ``For us, it's a question of the vehicle that secretariat is in -- and that vehicle will not take us where we want to go.''

[ETERNAL WARMING]

Bend over, America. You're about to hemmorhage more jobs and cash.