Colombia, Peru Push to Finish Andean Free Trade Negotiations with U.S. before 2006 Elections

NotiSur - South American Political and Economic Affairs, October 14, 2005 | Go to article overview

Colombia, Peru Push to Finish Andean Free Trade Negotiations with U.S. before 2006 Elections


Colombia, Ecuador, Peru, and the US have completed their 12th round of free-trade agreement talks in Cartagena, Colombia, and negotiators are expressing qualified optimism that they will have a finished document ready before the end of the year. Colombia and Peru have a particular interest in completing the process before their 2006 electoral cycles get underway, but several obstacles remain, and no firm deadline for completion is in place. As a finished document gets closer, protestors in the Andean countries have ramped up demonstrations against an Andean Free Trade Agreement (AFTA), with protestors in Colombia registering fatalities.

Negotiators: "No deadline," but hopes for December completion

Prior statements from negotiators had looked forward to completion of the document first by March and later by October of 2005, but, as assistant US trade representative Regina Vargo said to reporters on Sept. 27, "We don't have a deadline."

US negotiators are looking forward to progress ahead of the December ministerial meeting of the World Trade Organization (WTO) in Hong Kong, but Vargo says closing work during this "window of opportunity over the next two months...will be challenging." She says the structure of negotiations is allowing different negotiating groups to set their own pace for face-to-face and video conferences. She says the governments of Colombia and Peru have "indicated their desire to conclude in advance of entering the electoral period" of 2006.

Another reason the governments are pushing for December completion is the imminent expiration of the Andean Trade Promotion and Drug Eradication Act (ATPDEA) that month. The act was set up as an alternative economic strategy to encourage businesses other than the cultivation of illicit crops and the US has said that it does not plan to renew it.

Two of the most controversial areas of discussion are intellectual property and agriculture. Latin American farmers fear that they will have little ability to compete with subsidized, high-tech farm products imported from the US, while intellectual-property discussions might make it more difficult for pharmaceutical consumers to purchase low-price generics. During the Cartagena round there was no discussion of ethanol or sugar in the exchange of offers.

Vargo also said there were "still significant differences" in areas like customs cooperation, market access, anti-circumvention measures, and Tariff Preference Levels (TPLs). She said USTR head Rob Portman was talking to congressional representatives to see if he could "garner broader bipartisan support" for incorporating labor and environmental standards, including standards from the International Labor Organization (ILO), into the treaty.

Compared with the five Latin American countries involved in the Central American Free Trade Agreement (CAFTA), the GDP of the three Andean nations is more than double the six CAFTA countries. The total GDP of AFTA countries, based on estimated figures for 2004, would come to US$485.9 billion. CAFTA countries showed an estimated GDP of US$216.6 for the same period. Nonetheless, the US Chamber of Commerce has stated that the CAFTA nations, after Mexico, represent the largest market for US goods in Latin America.

Responding to a question about whether strong political opposition to the CAFTA agreement in the US Congress (see NotiCen, 2005-08-04) discouraged Andean negotiators, Vargo said that the Andean countries "looked at CAFTA debate and saw the US would be moving forward with its trade agenda."

The 13th round of negotiations is set to convene in Washington, DC, Oct. 17-21.

Can Ecuador compete?

Peru and Colombia are the strongest Andean economies in the AFTA talks, with 2004 GDPs of US$155 billion and US$281 billion, respectively. Ecuador's GDP did not reach a total of US$50 billion last year, and, with the political turmoil of 2005, will likely grow little economically.

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