Mexico's Fox Says Majority Will Consider Trade-Zone Negotiations Without Dissenters [i.e. no Chavez]

AP via Yahoo! ^ | November 4, 2005 | Nestor Ikeda

[Brilliant]

MAR DEL PLATA, Argentina (AP) -- With talks stalled on forming a massive 34-nation free trade zone from Alaska to Argentina, Mexico's president on Friday floated a new proposal: Exclude dissenting countries like Venezuela and make a smaller alliance that would still rival the European Union.

Trade experts say a watered-down version of the Free Trade Area of the Americas could be a solution to fruitless negotiations that have failed for years to overcome key sticking points and create the 34-nation bloc.

Mexican President Vicente Fox, speaking to reporters on the sidelines of the fourth Summit of the Americas in this south Atlantic beach resort, said 29 countries in the Western Hemisphere have decided to consider moving forward with negotiations to craft the smaller zone.

Venezuela would be the first to opt out. President Hugo Chavez bitterly opposes the idea of FTAA, saying it should be replaced with a Latin American version based on socialist ideals.

The other countries that would likely be left behind are members of the Mercosur trade bloc: Argentina, Brazil, Paraguay and Uruguay. They all support the idea of an FTAA, but have been reluctant to set an April date at the summit to restart high-level negotiations.

Analysts said the Mercosur countries would probably end up joining any pact later.

"Over time, there would be pressure for the Mercosur countries to join," said Michael Shifter, a Latin American expert at the Inter-American Dialogue research group in Washington, D.C. "And the U.S. and other participating governments would extend an open invitation."

Fox came to the summit planning to push the FTAA negotiations forward.

He told reporters that a bilateral meeting that was scheduled between him and Argentine President Nestor Kirchner for Friday was canceled. He said Kirchner "must do more to save this conference."

A smaller FTAA would crush the hopes of creating a trade zone spanning the Americas, a move initially proposed during the first Americas summit in 1994 in Miami.

It could also push forward U.S. moves to create bilateral free trade agreements with some South American countries, said Gary Hufbauer, an economist and senior fellow at the Institute for International Economics in Washington, D.C.

"The practical outcome of Fox's statement is to give a green light to U.S. pacts with Colombia and Peru, and perhaps to create a 'small' FTAA: North America, Central America, the Caribbean, Chile, Colombia, Peru and perhaps Bolivia and Ecuador later on -- but leaving out Mercosur and Venezuela," Hufbauer said.

Neither Kirchner nor U.S. President George W. Bush specifically mentioned the FTAA in a brief appearance before reporters after holding a bilateral meeting Friday morning.

But Chavez denounced it as soon as he stepped off his plane Friday in Mar del Plata, saying: "Today the FTAA is dead and we are going to bury it here. We are here to change the course of history."

Salvadoran President Tony Saca, one of the strongest U.S. allies in the region, said there was a strong momentum toward creating a hemispheric treaty -- with or without Chavez.

"Today we are not attending the burial of the FTAA in this summit," he said. "We, the majority of the presidents, have come here to reiterate our firm resolve and commitment to free trade, to an economic opening and to programs that generate employment."

Bush has said the FTAA would generate wealth, create jobs and help lift tens of millions of Latin Americans out of misery.

About 10,000 mostly Latin American protesters in Mar del Plata insisted the zone would enslave workers and benefit big American companies. And about 100 Canadians who joined in the protests said they have suffered under the North American Free Trade Agreement between Canada, Mexico and the United States.

"We have NAFTA, so we know about free trade deals," said Dennis Matteau, a steelworker from the province of Quebec. "They are not good for workers."

The effort to create an FTAA involving every country in the Western Hemisphere except Cuba has made halting progress for years, with Brazil and the United States far apart on key issues -- including U.S. protections for American farmers and Brazil's laws covering the protection of intellectual property rights and market access.

Negotiators missed an original January 2005 deadline for wrapping up the talks even under a scaled-down two-tier approach that has been dubbed "FTAA lite" by critics.

The United States and Brazil -- which has Latin America's largest economy -- have been leading the on and off talks to create the trade zone.

Brazilian Foreign Ministry officials in Mar del Plata for the summit had no immediate reaction to Fox's comments.

Fox's declaration on the FTAA also had political significance, Hufbauer said.

"This is a move by Fox to heal past differences with the United States," he said.

Associated Press Writer Nestor Ikeda contributed to this story from Mar del Plata.

[Brilliant]

I think this is a great idea. Let Chavez hang in the wind.

[dead]

I agree. Let the monkey trade with his master.

[sheana]

let em all hang in the wind. Just a western EU. yippee!

[Chode]

we don't need no stinking chavaz...