TNC Rajagopalan: Summit set back

EXIM MATTERS

The fourth Summit of Americas opened with an agenda to push ahead with the idea of free trade among 35 countries in North and South America but failed to arrive at a suitable deadline even to restart the stalled talks on free trade zone, even after the negotiations extended eight hours past the scheduled deadline.

The visions of a Free Trade Area of America (FTAA) seem to be wilting in the face of leftist onslaughts in Latin America. Leaders from across the American continent met at Mar del Plata, Argentina""the birthplace of leftist revolutionary Che Guvera""but Brazil, Argentina, Uruguay, Paraguay and Venezuela opposed the proposal to set an April deadline for talks on free trade that 27 other countries did not so categorically oppose.

The summit was to focus on job creation, immigration and disaster relief, besides greater economic integration, but was overshadowed by angry demonstrations, which turned violent at times, against the policies of US President George W Bush.

The protests also drew attention to poverty, inequality and unemployment across South America, where more left-of-center leaders promoting new ways to reduce poverty and preserve a disappearing middle class are gaining acceptance.

Bush campaigned for prosperity and stability through open economies and entrepreneurship, more hemispheric trade and stronger democracies.

Opposing his vision, Venezuelan President Hugo Chavez advocated heavy state economic intervention and social spending. The Latin American public is equally sceptical of both the views.

The Summit of the Americas was established with fanfare in 1994 to deliver by this year a free trade area of the Americas""from Alaska to Tierra del Fuego""and to solidify the region's democratic gains after decades of military coups and civil wars.

But neither democracy nor the free-trade area has materialised. Instead, smaller trade blocs have formed and many countries, including Brazil and Argentina, resist what they perceive would be a US-dominated trade area.

The current summit, the fourth to be held, had the theme of job creation through good governance. Without the driving goal of a free-trade area and given the "diversification" of approaches, the summit was never likely to deliver more than bland calls for poverty reduction and trade growth.

The timing of the summit could also be faulted. The sixth meet of the trade ministers of the World Trade Organisation (WTO) is due at Hong Kong next month. "Anything we do now, before the WTO meeting, could confuse the facts and we would be creating an impediment to the WTO," said Brazilian President Luiz Inacio Lula da Silva.

Also, post-9/11, Bush was too pre-occupied with middle-east, especially Iraq, and neglected Latin America. The post-Katrina images of the helpless poor in the US and riots in France over inequality and poverty did not help overcome the perception that capitalism, or for that matter, free market economy favours the rich.

Also, Chevaz, the main opponent of free trade zone, has been using the surplus that high oil prices gave Venezuela to help neighbours in trouble and so, his views are difficult to brush aside.

Mexican President Vincent Fox, however, talked about free trade agreement among the 27 other countries that did not oppose the talks categorically. But any trade talks that excludes Brazil and Argentina is of little significance in Latin America.

tncr@sify.com