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Last Updated: Wednesday, 2 November 2005, 23:59 GMT
Little hope for Americas free trade plan
By Robert Plummer
BBC News business reporter

Riot police and anti-FTAA protesters in Miami, November 2003
Anti-globalisation protesters have fiercely opposed the FTAA process

Nearly 11 years have now passed since former US President Bill Clinton's ringing pledge to create a "Free Trade Area of the Americas from Alaska to Tierra del Fuego".

If the original December 1994 timetable agreed at that first Summit of the Americas in Miami had been followed, FTAA talks would have ended by 1 January this year, with the agreement in force by 31 December.

But as the leaders of the hemisphere's 34 democracies prepare to gather for the fourth such summit, Mr Clinton's successor, George W Bush, has been forced to concede that the plan is as far from fruition as ever.

For anti-globalisation campaigners, this is a matter for rejoicing. As far as they are concerned, the FTAA is just another example of the US trying to make the rest of the world submit to its economic interests.

But as activists thunder about the supposed "imperialist agenda" of the US in advancing free trade, it is often forgotten that the FTAA was actually a Latin American idea.

Reform consensus

The Clinton administration was not at all keen on being tied down to a specific date for the creation of a common market encompassing 800 million people, but gave in to pressure from its neighbours.

In fact, observers at the 1994 summit recall that developing nations were the ones lobbying hardest for trade reforms, even though it would be harder for them to compete once their tariff barriers had been removed.

The heads of Honduras, the US, Canada and Brazil (clockwise) in Mexico in January 2004
Mr Bush and his fellow leaders have discussed the FTAA many times

At the time, there was a consensus among governments for the view that free trade would promote economic growth and bring prosperity to the region.

But that summit is part of history now, as is the litany of problems that afflicted the FTAA process almost from the outset.

It soon became clear that the US and Brazil, the biggest economies in North America and South America respectively, did not see eye to eye over how the new free trade zone was to be created.

In essence, the US viewed it as a matter of gradually adding new members to its existing trade pact, the North American Free Trade Agreement (Nafta), alongside Canada and Mexico.

But Brazil, as the most important member of the South American free trade bloc Mercosur, wanted to negotiate with Washington on equal terms.

'Perverse' plan

Adding to the political rivalries, changes of leadership in key nations produced a more hostile attitude to free trade.

In particular Hugo Chavez, who was elected president of Venezuela in 1998, has repeatedly denounced the "perverse" FTAA and proposed his own alternative trade bloc in its place.

Hugo Chavez
Mr Chavez is traditionally viewed with suspicion by Washington

Mr Chavez, of course, enjoys a warm relationship with Fidel Castro of Cuba, the only country in the hemisphere to be excluded from the FTAA process.

But after the 11 September 2001 attacks on the World Trade Center and the Pentagon, all hopes of keeping the region's free trade ambitions on track were truly sunk.

Suddenly, the Bush administration turned its back on its "backyard", focusing instead on national security and the "war on terror".

Fiasco looms?

Now the US president argues, with some justification, that the FTAA failure pales into insignificance beside the bigger prize of a global trade deal under the auspices of the World Trade Organization (WTO).

But unless negotiators in the Doha talks can make a breakthrough, Mr Bush may find that he has merely swapped a small-scale fiasco for a large-scale one.

Tensions between Washington and Brussels over agricultural subsidies are already seen as a major source of discontent.

When it comes to the crunch at final talks in Hong Kong in December, however, Mr Bush could face opposition from closer to home.

Caribbean nations, angry at recent WTO rulings on sugar and bananas, are said to be spoiling for a fight and could do their best to wreck a deal.

Whatever the outcome at a global level, the failure to conclude the FTAA on time is arguably a missed opportunity - and one that may not come again.

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