26 April - 2 May 2001
Issue No.531
|
Al-Ahram Weekly On-line 26 April - 2 May 2001 Issue No.531 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Too close for comfort
Washington has clinched agreement on having a Free Trade Area of the Americas in place by 2005. Few south of the Rio Grande are holding their breath, writes Hisham El-Naggar from Buenos Aires
As the leaders of 34 Western Hemisphere nations converged on Quebec City, Canada, expectations were high both north and south of the Rio Grande. For Americans -- United States citizens, that is -- the summit was an important test for the leadership skills of President George W Bush. First, he had to persuade the leaders meeting in Quebec to establish the long-awaited Free Trade Area of the Americas (FTAA), and the sooner the better. Second, he had to convince his own citizens, not least the members of a fractious and often isolationist Congress, that he needs to be trusted with "fast-track" powers so as to reach an agreement as soon as possible.
For Latin Americans, the issue was more complex. Whatever the leaders present at the summit may have thought, they had to struggle against the perception, widespread in their own countries, that the US is trying to carve out an empire for itself in a part of the world it has long regarded as its "backyard." Fierce resentment of American bossiness came to a head during a preliminary meeting in Buenos Aires earlier this month, when demonstrators from all over Latin America smashed shop windows and halted traffic in protest against US "hegemony." A bit too 1960s, perhaps. But then Latin America has witnessed so many frustrated hopes and wasted opportunities in the intervening decades that people there are justly wary of the glorious promises of free trade. Especially since the US has never stopped touting free trade, even as its commitment to political freedom on the continent was less steady.
More to the point, many Latin Americans argue the US has been notoriously inconsistent in practising what it preaches. It is all very good to pressure Latin American countries to open their borders to US-produced goods and services, but when the shoe is on the other foot, "health regulations" are used to keep out Argentine agricultural exports, "unfair subsidies" are invoked to halt Brazilian industrial exports and all manner of "standards" -- expensive to enforce for less wealthy countries -- suddenly become relevant.
Mexico's experience since it joined the North American Free Trade Association (NAFTA) is often cited as an example of what free access to US markets can do for a country's credit rating. But many Latin Americans suspect it is Mexico's proximity to the US and its tendency to export labour aplenty to its northern neighbour that have prompted Uncle Sam to go easy on Mexican exports to the US -- and indeed to support Mexico when its currency collapsed in 1995. There is little chance of Argentina or Chile receiving similar treatment.
For many Latin Americans, the issue is not whether to liberalise trade, but with whom, or rather, with whom to begin with. Brazil, in particular, is much more comfortable with Mercosur, its free trade association with Argentina, Uruguay and Paraguay. Brazil's enormous size gives it considerable negotiating power within the regional bloc, as demonstrated by the pressure it put on Argentina recently to reverse the removal of all duties on imports of computer products from non-Mercosur countries. For Brazil, such high tariffs give its less than fully competitive computer products a comparative advantage in Argentina's captive market.
The question may be as simple as that: who will hold which market captive? For it is very clear that the FTAA is not about free trade on a global scale -- to use one of Washington's favourite phrases -- but about a regional arrangement that translates into preferential access to regional markets.
Such deals always imply that there will be winners and losers, and many Latin Americans suspect that the FTAA's winners will be from the north. At this stage of the game, the US has an edge over most Latin American countries in the manufacturing and service sectors -- where the high-paying jobs are. This is not true in its relations with Europeans and Asians. Huddling close to the US behind a tariff wall essentially eliminates the possibility Latin Americans have of playing off one foreign rival -- who is also a potential investor -- against another.
Not all countries view the FTAA in the same light. Brazil clearly has the most to lose from a rapid liberalisation of trade rules, as its economy has done relatively well under the aegis of Mercosur protectionism. Besides, Brazilians reason, isn't it better being a big fish in a small pond than a small fish in a big, US-dominated pond? Other countries think otherwise. Chile, in particular, is excited about the prospect of being the first country after Mexico to become a NAFTA partner. Argentina is rumoured to be interested in freer access to the US market, if only to counterbalance Brazilian dominance in Mercosur. And several Central American countries cannot wait to be invited to join Mexico as a privileged trade partner of the US.
One is referring to governments, of course; people are much less certain about the wisdom of falling into Uncle Sam's embrace. Opposition to the FTAA among Latin Americans is led by leftists, trade unionists and the occasional industrial lobby. Not everyone finds protectionism so bad. Nor are many optimistic that the US will pay much attention to their interests after the creation of FTAA. The Quebec meeting had its protests and demonstrations, despite the assembled leaders' prayers for rain.
© Copyright Al-Ahram Weekly. All rights reserved
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
Recommend this page