U.S. Trade Representative Robert B. Zoellick is in Central America this week to meet with the United States’ best prospects for a new free-trade agreement — some of the same countries that lined up against him at World Trade Organization negotiations last month.
Global trade talks in Cancun, Mexico, collapsed when rich and poor countries failed to agree on new rules for investment, agriculture and other sectors — leaving smaller bilateral and regional deals as the United States’ clearest avenue to liberalizing trade.
“The recent setback in Cancun of the global trade talks makes it all the more important that we continue pressing to open markets bilaterally with [the Central American Free Trade Agreement] and throughout the hemisphere with the Free Trade Area of the Americas,” Mr. Zoellick said before leaving Washington.
But two of the five nations negotiating the CAFTA with the United States are members of a bloc of more than 20 countries allied with Brazil to demand a reduction in subsidies that rich countries give their farmers. The United States has since blamed leaders of the Group of 22 for an unwillingness to negotiate.
The potential consequences are a cause for some concern in Central America.
“I would hope this does not affect the negotiations. The way Nicaragua feels, it is too bad that we did not make as much progress as was needed in the Cancun round,” Mario Arana, Nicaragua’s development, industry and commerce minister, said in a telephone interview before meeting with Mr. Zoellick.
Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are the five CAFTA countries. Costa Rica and Guatemala are G-22 members, while El Salvador joined and then quit.
The Bush administration has made clear to potential free-trade partners that it will work only with countries willing to negotiate at all levels, said Richard Mills, spokesman from the trade representative’s office.
“Part of being a ‘can do’ country and part of the criteria … is that they share our vision of opening markets through the WTO,” Mr. Mills said.
Central American countries that joined the group insist they did so to support a technical position, not to make a political statement.
“Costa Rica did not support any efforts to use this group as a political platform, nor to extend its scope of action to other topics in WTO or to other [forums],” Alberto Trejos, Costa Rica’s foreign trade minister, said in a statement. “We shall remain vigilant that all our alliances in the WTO are in agreement with our commercial interests and our long-held views.”
A major source of concern comes from Congress. Immediately after the collapse of the Cancun talks, the Senate’s leaders on trade warned free-trade candidates that they risked congressional approval by joining the G-22.
“Several of the CAFTA countries played a less-than-constructive role at the WTO Cancun Ministerial. Their participation in the [G-22] and the role of that group in precipitating the meeting’s collapse raises serious questions about their commitment to trade liberalization,” Sen. Max Baucus, Montana Democrat, said in a floor statement.
Congress last year granted President Bush trade-promotion authority, which enables him to negotiate agreements and submit them to Congress for an up-or-down vote.
CAFTA negotiations are scheduled to wrap up by the end of the year, meaning a congressional vote could come as soon as spring.
The Bush administration is aware of the potential difficulty of approving a CAFTA agreement in Congress.
“We’ve reminded countries … that these [agreements] have to be approved by Congress,” Mr. Mills said.