www.thebusinessonline.com

As Americas Summit Ends, Divide Over Trade Continues

By Bernd Radowitz
Of DOW JONES NEWSWIRES


MAR DEL PLATA, Argentina -(Dow Jones)- The Summit of the Americas of 34 nations of the Western Hemisphere was about to end Saturday without bridging divisions on opposing ideas about free trade agreements.

While a group of 29 countries, among them the U.S. and Mexico, endorsed reviving soon stalled talks about the Free Trade Area of the Americas, or FTAA, oil-rich Venezuela squarely opposed the creation of the trade pact.

Also, the countries forming the South American Mercosur trade bloc - Brazil, Argentina, Uruguay, and Paraguay - remained firm in their stand, preferring to wait for the outcome of upcoming WTO trade talks, while not ruling out a restart if the FTAA talks after that.

The meeting was held in the Argentine seaside resort of Mar de Plata Thursday through Saturday amid heavy security. Argentine authorities employed thousands of policemen and troops to shield off the heads of state from at times violent protests. The city was calm Saturday, but Friday anti-Bush and anti-FTAA protesters had clashed with the police, while some rioters smashed the glass storefronts of at least 30 businesses in Mar del Plata.

The Mar del Plata summit had job creation as its main theme, but the discussion on whether or not to revive the FTAA overshadowed the meeting. Also, talks about several bilateral trade deals between the U.S. and the Andean countries Colombia, Ecuador and Peru, took place on the sidelines.

Participating countries Saturday had hours-long negotiations about whether, or how, a final declaration of the summit should mention the FTAA.

A Brazilian negotiator, who didn't want to be named, late Saturday told journalists that the negotiations over the declaration were standing at a "make or break" point, while a Chilean press official said the summit may end without any declaration signed at all.

A compromise proposal looked at mentioning talks about the hemisphere-wide trade area should be resumed in the first half of next year, but without attaching an exact date to that. As the haggling over the summit's declaration dragged on among diplomats, U.S. President George W.Bush, Brazil's President Luiz Inacio Lula da Silva, and most other presidents had already left the summit.

Venezuela's President Hugo Chavez, who throughout the summit said the FTAA "will be buried" in Mar de Plata and openly supported the street protests, made clear that he would refuse to sign any declaration that included a mention of the FTAA.

While declarations from previous Americas Summits haven't necessarily been followed, the situation showed the division among the participating countries about trade.

Brazil's Lula at a press conference early Saturday said upcoming talks in the WTO Doha round negotiations scheduled to take place in Hong Kong in December take preference over restarting the stalled FTAA talks.

He argued that it made no sense to decide when to relaunch the FTAA negotiations, as the controversial issue of agricultural subsidies in richer countries was still pending a solution at the WTO talks. The same issue in the past had also led to a paralyzation of FTAA negotiations.

"We're close to the Doha round (talks), we're close to having an agreement with the European Union and the U.S. Anything we would do now before the WTO round, could ... get in the way of the WTO round itself," Lula said at a press conference.

That was in line with comments by Bush who said on Tuesday that the Doha round "really trumps the FTAA as a priority, because the Doha round not only involves our neighborhood, it involves the whole world."

The idea of a free trade area spanning from Alaska to Argentina had originally been proposed at the first Summit of the Americas in Miami in 1994. Brazil and the U.S. are officially co-chairing those talks, but since 2003, there have been no high-level meetings on the FTAA.

While no real consensus about the FTAA was reached during the summit, proposals by Mexico's President Vicente Fox did much to stir up the trade debate.

Fox on Friday suggested the 29 countries most firmly supporting new FTAA talks could form the free trade area without Mercosur and Venezuela.

Then, on Saturday, Fox said he expects his country to become a fully integrated member of Mercosur in the first half of 2006.

Fox said there were "no contradictions" in his approaching Mercosur while his country and 28 others in the region are taking the opposite position to Mercosur on the establishment of the FTAA.

"My love is to be shared between them both," he said, referring in jest to the two agreements as "marriage proposals."

Outside Mar del Plata, other anti-U.S. protests also turned violent Friday. Four police officers were injured in the Argentine city of Rosario in clashes that followed an attack on a branch of Citibank (C). And in Buenos Aires, activists tossed Molotov cocktails at a U.S.-based bank and two fast-food restaurants, including a McDonald's, the Associated Press reported.

In neighboring Uruguay, hooded protesters chanting anti-Bush slogans attacked a series of bank buildings, shops and shattered windows in an outburst swiftly quelled by riot police. Leftist groups were blamed. Protests also took place in Venezuela and in Brazil, where Bush was expected late Saturday for a state visit.