What is interesting about current concerns about trade regimes, is that most of the talks about looming prospects ahead for the Free Trade Area of The Americas Agreement have been taking place, up to now, in a vacuum. But this is changing. Talks about trading relations are now following paths created by power, in its myriad of applications in the real world.
As Larry Rohter notes: The end of the cold war did away with the East-West split and made fashionable the notion of a North-South divide. Forget Communism versus capitalism. Now it was rich versus poor. But even as negotiators continue seeking a global trading system that might lift economies in both categories, that idea now appears to be coming apart at the seams.
Just as old military alliances are changing, familiar trade alliances and rivalries are mutating or dissolving under pressure from forces far stronger than ideology: in this case, competition for profits and markets.
This week in Washington and later this month in Miami, trade ministers from across the Americas are to meet again to try to adjust the rules that would govern free trade in the hemisphere, and the exchanges promise to be caustic. The prospect of a global agreement or even a hemispheric pact like Washington’s pet project ﾗ the Free Trade Area of the Americas ﾗ seems to be receding, replaced by a fragmented panorama in which resentment and bitterness set the tone.
That became clear in September, when representatives of the 146 nations that make up the World Trade Organization gathered in Canc�n, Mexico, for negotiations intended to reduce barriers to trade. The talks broke down amid mutual accusations of bad faith. One factor was a familiar sore point for nations with what Wall Street likes to call emerging markets: the United States and other industrialized nations insist on a right to continue subsidizing their own agricultural products.
But there was also a striking new development: the emergence of a coalition of not-so-poor nations that no longer fit the profile of either have or have-not. Calling itself the Group of 20-plus, the bloc was conceived by Brazil and India as a way to bring together large, resource-rich and economically dynamic nations from the South ﾗ a not strictly geographical label since it includes China as well as Indonesia, Thailand, South Africa, Nigeria, Mexico and Argentina.
These countries have the clout to demand greater access to the markets of industrialized nations because together they account for more than half the world’s population ﾗ and they also have substantial manufacturing centers of their own.
The United States and Europe, faced with an opposition more cohesive and vocal than they were used to, responded with petulance. “The improvised articulation led by Brazil is something from another planet,” said Franz Fischler, the European Union’s agricultural commissioner. ﾓThey need to come back to earth quickly.ﾔ
But Charlene Barshefsky, who was United States trade representative in the Clinton administration, sees the Brazilian-led coalition as a logical development ﾗ ﾓan additional power center, much better organized and more savvy,ﾔ with a stake in the world trading system.
ﾓYears ago, the North-South divide was largely ideologically based,ﾔ she said, with the poorer countries looking to shield themselves, through protectionism, from the risks of free trade. Now, she said, there are ﾓfloating combinations of countries, in which essential economic interests, and not ideology, are the guidepost.ﾔ
In that context, the Canc�n talks were also notable for the gulf that arose between the Group of 20-plus and the rest of what is known as the developing world. The conference was brought to a halt � over the question of American and European agricultural subsidies � not by Brazil and its allies but by a larger, separate coalition of less developed countries, mostly African and Caribbean, that felt disenfranchised and ignored. “If it were just up to the Group of 20-plus, the meeting would have ended with a decision to keep negotiating,” said Rubens Ricupero, a Brazilian who is the director of the United Nations Commission on Trade and Development.
Members of the Group of 20-plus, in fact, account for a growing slice of world trade and have a broad range of interests. Brazil, once thought of as just an agricultural exporter, now counts airplanes and automobiles and car parts as its leading export items.
The danger now, especially for the weakest nations, is that trade talks will be transformed into what the economist Jagdish Bhagwati calls a ﾓspaghetti bowlﾔ of bilateral and regional agreements. More than 300 such accords already exist, each with a slightly different set of rules. Dr. Bhagwati, a Columbia University professor, notes that ﾓpoor countries are singularly unequipped to cope with the chaotic regime.ﾔ
The best that The Bahamas and other countries in the region can therefore ever hope for is that together they might increase their room for manoeuvre. They can do so by carrying out for themselves niche markets, thus the implied importance of an expanded Caribbean Single Market and Economy.
Editorial, The Bahama Journal
