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U.S. Heads to Ecuador For FTAA Discussion

WASHINGTON — U.S. Trade Representative Robert Zoellick today is set to begin a two-day meeting with his counterparts from 33 Latin American countries in Quito, Ecuador to try to advance the market-access phase of negotiations aimed at creating a...

WASHINGTON — U.S. Trade Representative Robert Zoellick today is set to begin a two-day meeting with his counterparts from 33 Latin American countries in Quito, Ecuador to try to advance the market-access phase of negotiations aimed at creating a hemispheric free-trade zone.

The U.S. will push for trade ministers to commit to exchanging initial offers on tariff reductions and work to establish a timetable for resolving remaining differences in the draft texts of the agreement, known as the Free Trade Area of the Americas, trade officials said.

After reviewing the initial offers, trade officials will exchange requests for improvements to the original offers next year. Revised offers are due by July 15, 2003.

“In Quito, we will endeavor to advance the negotiations into the crucial phase of specific, concrete bargaining,” Zoellick said in a statement. “This will move us closer to a hemispheric partnership stretching from Alaska to Tierra del Fuego — 800 million economically integrated and democratically governed people united in the opportunity to prosper and improve lives.”

He also said the U.S.will seek to negotiate reduced tariffs while “recognizing the small island economies of the Caribbean may need flexibility on the tariff starting points for a limited number of sensitive products.”

The direction of the FTAA could be affected by next week’s election if there is a change in control of the House or Senate. A Democratic majority, particularly in the House, could seek to impede the Bush administration’s expansive trade agenda.

But there are hurdles to overcome before the administration needs to seek Congressional approval.

In addition to the politically sensitive issue of textile and apparel tariff phaseouts in the U.S. and other countries, trade officials will have to decide how to drop barriers on agricultural products.

A dispute between Brazil and the U.S. over cotton subsidies is heating up even as the FTAA talks move forward.

Argentina joined with Brazil in a claim that Washington’s subsidies to U.S. cotton producers violate WTO rules.

Brazil, which has the largest economy in South America, has also persistently voiced opposition to the FTAA. The nation’s newly elected president, Luiz Inacio Lula da Silva, has claimed the U.S. is trying to annex Latin America through the pact.

Despite these potential roadblocks, Zoellick has maintained he is optimistic that progress will be made.

He has reiterated that the U.S. is ready to negotiate trade pacts with individual Latin American countries if the multilateral talks reach an impasse.

Negotiators hope to reach a deal by 2005 — when quotas on textiles and apparel are to be dropped among WTO nations.

In addition, the Bush administration hopes to wrap up free-trade pacts with Chile and Singapore this year and send the deals to Congress in 2003. Negotiators also hope to start negotiations next year with five Central American countries and begin talks on a separate free-trade pact with Morocco.

Apparel importers and the domestic textile industry will likely watch the market-access negotiations closely.

“We will have to see whether all of the countries are willing to initiate substantive negotiations — whether or not they will put their proposals and offers on the table,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles and Apparel.

Stephen Lamar, senior vice president at the American Apparel & Footwear Association, said it will be key for the tariffs to be phased out quickly.

“Companies are not looking 10 years out, they are looking 10 months out,” said Lamar.

The American Textile Manufacturers Institute does not object to an FTAA, but is pushing for reciprocity in tariff phaseouts.

“It is simply impermissible to allow an FTAA participant to maintain its tariffs on U.S. products for a longer period of time than the U.S. maintains on that party’s products,” said Parks D. Shackelford, president of the ATMI, in a letter he sent to a USTR committee in September.