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US officials, thwarted in plan for FTA, go bilateral

US officials, frustrated with the prospect of a watered-down hemispheric trade agreement, said Tuesday they would focus on bilateral agreements with several compliant nations in the Andes, Central America and the Caribbean as a way to get past differences with South America's largest economy, Brazil.

In announcing the decision to seek less-ambitious trade agreements with a group of relatively small economies, Robert Zoellick, the US trade representative, tacitly confirmed the glacial pace of wider talks here this week aimed at creating a Free Trade Area of the Americas among 34 countries in the Western Hemisphere.

The US and Brazil, which are jointly leading the negotiations, reached an understanding that would remove sensitive issues like agricultural subsidies and intellectual property protection from the talks in an effort to avert the type of collapse that took place two months ago at a WTO meeting in Cancun, Mexico.

This strategy could ultimately allow talks to advance on creating a hemispheric trade agreement by early 2005. But because the US and Brazil remain far apart in several crucial areas, the approach has also generated concern that the talks could result in a watered-down agreement described by some negotiators as an a la carte approach.

While a group of about a dozen countries, led by Canada and Chile, have reacted coolly to the joint proposal by the US and Brazil, effectively stalling resolution of the matter until top-level negotiators convene here later this week, several nations have seized on the opportunity to negotiate parallel agreements with the US.

Zoellick said he had notified Congress on Tuesday of the Bush administration's intent to begin trade talks with several countries in the Andean region: Colombia, Peru, Ecuador and Bolivia.

Zoellick said there would be a two-pronged approach to the talks, with an early emphasis on negotiations with Colombia and Peru and later efforts to bring Ecuador and Bolivia into the talks.

Zoellick said he was also planning to start talks to bring the Dominican Republic into the Central American Free Trade Agreement and a separate effort to reach an agreement with Panama.

Despite concern that the Central American agreement could encounter resistance in Congress, especially with regard to efforts to reduce subsidies for sugar producers, negotiators here said it was important to move forward in some areas.

Brazilian negotiators reacted calmly to Zoellick's announcement of talks with several countries, describing the strategy as a normal negotiating tactic. Antonio Simoes, an adviser to Brazil's foreign minister, Celso Amorim, said Brazil was also hoping to negotiate bilateral trade agreements with nations including Peru and Venezuela through the Mercosur trade group.
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