ACN member countries propose bilateral accord with the United States

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, May 26, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: The negotiations for the creation of the Free Trade Area of the Americas (FTAA) are now stuck in a situation of divergent perceptions that may set back the timetable. Colombia and Peru, both member countries of the Andean Community (ACN), have announced their interest is bilateral negotiations with the United States, basing their initiative on Chile's experience.

But it is known that there is a mistaken impression (according to ACN Secretary General Guillermo Fernandez de Soto) that the United States is trying to pursue such bilateral negotiations. On the contrary, following the meetings between Bush and Uribe, plus the visit to the US Trade Representative's Office, the intention is to strengthen the negotiations for creation of the FTAA.

The proposal put forward by these ACN members ... to engage in bilateral negotiations reflecting the Chilean experience ... should be carefully examined, because Chile's situation is different; it has a productive and commercial structure unlike those of the Andean countries. "A strategy like this, pursued over 12 years under unique conditions, complete with a process of training for negotiators and persistent lobbying in Washington, is very difficult to replicate by other countries in a short-term bilateral adventure," asserted Fernandez de Soto.

Among the arguments in favor of this approach is that it would make it possible to evade the results of the World Trade Organization's Doha Round, with which the developing countries could obtain direct agreements on agricultural subsidies rather than having to rely on the multilateral mechanism. Fernandez de Soto finds it inexplicable that some Andean countries might want to give up something that has not yet even been negotiated in the Doha Round.

There is no trade agreement in which ALL sectors come out ahead; there are only trade agreements whose short and long-term economic benefits are big enough to compensate for the sectors that might be injured in the short term. It is up to the negotiators to identify those sectors and have the skill to obtain the best possible terms for their countries, establishing internal compensatory and adjustment mechanisms to guarantee the political viability of the agreements' implementation.

That is why, though there may be doubts regarding the desirability of seeking bilateral agreements between the ACN and the United States versus directly working for the FTAA ... some ACN member countries have recognized the importance to their countries' development of pursuing trade integration with the United States.

This understanding does not, unfortunately, seem to be shared by the Venezuelan authorities, who openly refuse to negotiate for our country's accession to the FTAA.