Monday, October 17, 2005

Caricom rebuffed over the FTAA

Caricom Rebuffed Over the FTAA
BBC Online October 5, 2005.

In December 1994, at the Miami Summit of the Americas, the heads of state of 34 countries in the Western Hemisphere agreed to form a Free Trade Area of the Americas (FTAA) by January 1, 2005 to progressively eliminate trade and investment barriers.

The FTAA was to be the largest free trade area in the world. The FTAA would increase economic integration and remove the tariff and non-tariff barriers to the free trade of goods, services, capital and investment, benefiting people throughout the Western Hemisphere.

In November 2003, the FTAA Trade Negotiation Committee (TNC) meeting in Puebla, Mexico, reached a deadlock in negotiations. One of the main issues of conflict was agricultural subsidies. The Mercosur countries (Mercado ComĂșn del Sur, or Southern Common Markets), led by Brazil and Argentina, demanded that farm subsidies be reduced and that the issue be included in the discussions. The United States felt that agricultural subsidies should be addressed only by the World Trade Organization (WTO) and not within FTAA deliberations. The Mercosur merged in 2004 with the Andean Community to form the South American Community of Nations (SACN).

Caricom (Caribbean Community) countries agreed with the Mercosur position and requested a Regional Integration Fund (RIF) that would give special treatment to countries with smaller economies. Without the special treatment, Caricom believes it will not be able to survive the trade competition in the free trade arrangement.

The Caricom region has already been negatively affected by the large entry of subsidized agricultural products into their region from the developed world. These foreign products place pressure on locally developed goods by forcing Caricom countries to cut out subsidies for their local producers as a condition for financial assistance.

The Bush Administration in 2003 announced that it would negotiate free trade agreements with Andean nations (with the exception of Venezuela) and Panama, which many feared would undercut the FTAA process. This fear may have been realized as negotiations have not continued. Caricom countries are concerned that the draft declaration for the fourth Summit of the Americas is silent on the FTAA. Three requests to the Brazilian and U.S. co-chairs of the committee have gone unanswered.

Will the FTAA ever happen?

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