Friday, June 03, 2005
Posted on Wed, Jun. 01, 2005
Paying, hoping for FTAA
By Jane Bussey, The Miami Herald Knight Ridder/Tribune Business News
Jun. 1 - The pace of negotiations for the proposed Free Trade Area of the Americas has slowed to a standstill. But hemispheric institutions such as the Organization of the American States, the Inter-American Development Bank and the Economic Commission for Latin America and the Caribbean continue to provide the buoys to keep the talks afloat.
While creating a free-trade zone is not the central goal of the OAS General Assembly this week in Fort Lauderdale, it is definitely part of the OAS agenda for the Americas.
The three institutions have underwritten around $10 million of the costs so far and have provided the technical underpinnings for the decade-long negotiations to create a free-trade zone among 34 nations in the hemisphere.
But with negotiations for the proposed trade pact now entering the 15th month without progress, the temporary FTAA headquarters, in Puebla, Mexico, is down to a skeleton staff.
The creation of an FTAA was proposed in the first Summit of the Americas, held in December 1994 in Miami under former President Bill Clinton.
Actual negotiations began in late 1998 after the countries agreed on the topics to negotiate and reached a compromise on a big stumbling block: where to put the temporary headquarters to handle the documents and take care of other red tape for the talks.
In a compromise worthy of Solomon, Miami won the spot as the first temporary FTAA office for almost three years starting in late 1998. Negotiators then moved the effort to Latin America.
The temporary headquarters was located in Panama City, Panama, in 2001 and 2002 and then moved to Puebla, Mexico, in 2003.
It was supposed to be located there for two years and then be moved to a permanent site -- Miami is among several cities vying for the permanent secretariat.
But in the absence of progress on reaching an FTAA accord, the secretariat has remained in Puebla.
The full accord was to have been negotiated by January 2005, allowing the process of ratification to begin so the agreement could be implemented in 2006.
But negotiators missed the January deadline, and no round of talks has been held since February 2004 because the two biggest players -- the United States and Brazil -- cannot settle their differences over the topics on the table.
Washington wants to include a host of protections for investment and intellectual property, as well as the opportunity for foreign firms to participate in government contracts.
Brasilia wants to take aim at the U.S. and Canadian farm programs, from agricultural price supports and subsidies to high tariffs on goods such as Florida citrus.
To keep the temporary secretariat in Puebla running beyond the two years, FTAA organizers have tried to stretch the budget by not replacing some staff members who have left and and by using other cost-cutting measures. From a high of 53 employees, the Puebla staff has fallen to 23.
"They have done some economies and not renewed contracts so they still have some resources available," said IDB spokesman Peter Bates.
Although earlier this year the IDB raised questions about continued support without clear signals from negotiators, the development bank is now preparing another grant to keep the FTAA office on life support. Since the beginning, the IDB, OAS and ECLAC have been covering roughly a third to a half of the costs of running the temporary headquarters, mainly by paying salaries.
The host cities and their respective governments also have picked up part of the tab, typically paying for infrastructure, equipment, the location for talks and hotel rooms for the negotiators. In-kind contributions from the governments and the private sector round out the budget.
But the OAS and other institutions also supply technical research and analysis and maintain the official website, www.ftaa-alca.org. Most of the financing has come from the IDB, which has $3 million in technical-cooperation grants for each of the three headquarters in Miami, Panama City and Puebla.
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Copyright © 2005, The Miami Herald
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