- The Washington Times - Wednesday, February 12, 2003

Trade barriers that protect the United States' most sensitive sectors and products are open for negotiation as 34 countries in the hemisphere work toward a Free Trade Area of the Americas, the Bush administration announced yesterday.
"We're putting all our tariffs on the table, and we're ready to move forward with others who are willing to do the same," U.S. Trade Representative Robert B. Zoellick told reporters.
U.S. textile and some agriculture groups yesterday were cool toward the administration's proposal, but other manufacturing groups said it would open markets.
Mr. Zoellick outlined proposals for the FTAA as countries try to wrap up talks by 2005. An agreement would create a trade zone with about 800 million people and $13 trillion in combined economic output.
The Bush administration proposed:
That 65 percent of all consumer and industrial goods immediately enter the United States duty-free.
Textile and apparel imports become duty-free in five years.
More than half of all agricultural goods enter the country duty-free immediately and almost all become duty-free as tariffs are phased out over time.
The FTAA is a central component of the Bush administration's trade agenda. Mr. Zoellick said the proposals are a strong starting point for negotiations.
All 34 countries were expected to advance proposals by the end of the week on five areas: consumer and industrial goods, agriculture, services, investment and government procurement.
Countries will respond to each others' offers as they begin preparations for a high-level meeting in Miami this November.
Agriculture is one of the most sensitive areas, and while tariffs are on the table, U.S. farm subsidies are not. The United States last year approved 10-year, $180 billion farm bill that Latin American competitors say is unfair.
"I would expect the Brazilians to push very hard on that issue," said Lincoln Gordon, a Brazil expert at the Brookings Institution.
Administration officials have said any changes to the U.S. farm plan must coincide with lower export subsidies in the European Union and Japan.
U.S. textile and sugar groups yesterday were cautious about the administration's proposals.
Asian countries should not be allowed to ship fabric or yarns through other FTAA countries to the United States, said Cass Johnson, associate vice president for international trade at the American Textile Manufacturers Institute.
And U.S. proposals at the World Trade Organization, where talks are unfolding parallel to FTAA negotiations, also call for zero tariffs on goods, which would leave the hemisphere at a competitive disadvantage compared with Asia, Mr. Johnson said.
"The region has to have some sort of preferential reason for being," he said.
Some U.S. agricultural sectors, like sugar and citrus, are also wary of the proposals.
Joseph Terrell, director of public affairs at the American Sugar Alliance, said that regional trade solutions will not work for sugar.
"We feel very strongly that sugar is such a distorted world market that it needs to be addressed globally and not piecemeal in bilateral or regional trade agreements," he said.
But other industry groups see the proposals as an opportunity to open new markets.
"At stake for us, in a big way, is the imbalance in tariffs across the hemisphere," said Scott Otteman, director of international trade policy at the National Association of Manufacturers.
U.S. tariffs average 2 percent to 3 percent, while Brazil's average applied tariff is more than 12 percent, U.S. government figures show.

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