Newspaper article The Christian Science Monitor

With US Hare Flagging in Trade Race, Latin American Tortoise Is Catching Up Mercosur Trade Group Aims to Balance NAFTA, European Union

Newspaper article The Christian Science Monitor

With US Hare Flagging in Trade Race, Latin American Tortoise Is Catching Up Mercosur Trade Group Aims to Balance NAFTA, European Union

Article excerpt

Among the spectators packed into the Olympic Stadium to witness the opening ceremonies were two VIPs - Argentine President Carlos Menem and Queen Sofia, wife of Spain's King Juan Carlos - who sat next to each other and had a great time.

Observers think that the queen was an emissary from the European Community whose role was to maintain a chummy relationship with the southern-cone leader so future trade deals would come more smoothly. Today, the world is dividing into massive trading blocks, much like a global game of musical chairs in which governments are offering preferential treatment to friends and neighbors. Those who don't have a seat when the music stops are left out of the game.

Mercosur - a 206-million-person market comprised of Argentina, Brazil, Paraguay, and Uruguay - is currently spinning the records in this hemisphere, and the United States has diminishing influence with the disc jockey. Weak US leadership Meanwhile, the United States is doing a poor job of taking the lead in Latin American trade issues. First, the Republican-dominated US Congress recently rejected President Clinton's request for fast-track authority when negotiating a free-trade pact with Chile, South America's financial powerhouse. Second, in an upset last spring, Brazil was selected to host the next round of the Pan American free-trade talks, winning out over the US-backed candidate, Costa Rica. This means that the most protectionist nation in this hemisphere will set the pace and agenda of future talks. Unlike the North American Free-Trade Agreement (NAFTA), Mercosur still allows for thousands of mind-boggling exceptions that protect antiquated local manufacturers. Even so, Chile, Bolivia, Venezuela, and other countries are eager to talk with the Mercosur pactmakers, since the benefits greatly outweigh the restrictions. …

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