| Can there still be any question that the world is shrinking
and national borders are disappearing? Any doubts were
dispelled when the leaders of 34 free nations of the Western
Hemisphere met in Quebec on Apr. 20-22 at the third Summit of
the Americas. There they were greeted by a large cloud of dust
and industrial pollution arriving from China after traveling
across the Pacific Ocean to North America. Meanwhile, the U.S.
space shuttle Endeavor carried a robotic arm made in Canada to
the international space station.
So who gets to write the rules for globalization -- if
anyone? How will those rules be enforced? And who loses, and
who wins? That was the real debate on the barricades and in
the meeting rooms in Quebec. Will the winners be the
subsistence farmers of Guatemala and the maquiladoras factory
workers of Mexico, or the multinational corporations of the
U.S. and Canada? Or will the process of globalization just
play itself out without rules?
Few seem to prefer the rule of the jungle applied to
international trade. But despite some optimistic language from
the 34 leaders, enormous impediments to any trade agreement
uniting North and South America still remain. And that's
likely to leave the rules more to chance than to design for
perhaps another decade or more.
NONSTARTER. The biggest roadblock to the Free Trade Area of
the Americas (FTAA) is the sour relationship between the U.S.
and Brazil, whose President, Fernando Cardoso, demanded on
Apr. 20 that ``the North has to pay'' for a hemispheric deal
by opening up to Brazilian farm exports. Brazil says it wants
the developed world to stop subsidizing its farmers at a rate
of $1 billion a day, citing Organization for Economic
Cooperation & Development figures that estimate such
payments at $365 billion a year. While U.S. farmers receive,
on average, $11,000 per year from U.S. taxpayers, per capita
gross domestic product in Brazil is just $3,100. Even worse,
says Brazil, the U.S. tariffs on 15 of Brazil's main exports,
including sugar, orange juice, and shoes, is 45.5%.
But ending farm subsidies through the FTAA is a nonstarter,
says Senator Charles Grassley, (R-Iowa), chairman of the
Senate Finance Committee. Holding a handkerchief to his nose
to block the tear gas being dispensed by riot police battling
antiglobalization rioters just three blocks away, Grassley
told BusinessWeek on Apr. 21 that, ``the real problem with
subsidies is in Europe and Japan, and we have to address that
in a bigger forum than just the FTAA. We are not going to
unilaterally disarm.''
If Brazil's insistence on competing with the politically
powerful U.S. farm industry isn't the biggest roadblock,
there's the battle in the U.S. Congress between a
pro-labor/pro-environment block of Democrats and an equally
large group of pro-business Republicans. Since 1994, Congress
hasn't granted the White House its customary broad authority
to negotiate trade agreements and bring them to the
legislature for a single vote without amendments.
``A STRONG MESSAGE.'' The hangup for Congress is how to
instruct U.S. trade negotiators on what importance to assign
workers' rights and environmental protection in trade deals.
Republicans seem generally willing to include such concerns as
long as they aren't enforced in agreements by trade-limiting
sanctions. Democrats want guarantees and sanctions to ensure
compliance by developing nations where such regulations tend
to be weak. ``This is going to be a challenge,'' conceded U.S.
Trade Representative Robert B. Zoellick on Apr. 21 in Quebec.
Other FTAA nations will also be wary of any attempts to
impose higher labor and environmental standards on them,
dismissing this as veiled protectionism. ``We got a strong
message...that most of the countries [in the hemisphere] would
find this objectionable,'' Zoellick said. Nevertheless,
President Bush insisted that working out differences in
Congress and among the 34 nations to complete an FTAA by 2005
would be ``among my top priorities.'' But that depends on Bush
persuading Congress to grant him negotiating authority, and
winning the 2004 election, and neither is a certainty.
The larger and more prosperous FTAA nations have their own
scores to settle before agreeing to a hemispheric free-trade
zone. A decade-old dispute between the U.S. and Canada over
alleged subsidies to Canadian logging has flared anew. More
than 100 U.S. sawmills have closed from Washington to
Arkansas, and the U.S. timber industry is demanding limits on
Canadian softwood lumber imports.
WEAK LINKS. Then there's Brazil and Canada, which are
battling over government subsidies to aircraft makers
Bombardier, in Canada, and Embraer, in Brazil. Each has taken
a complaint to the World Trade Organization. Other disputes
involve alleged violations of U.S. pharmaceutical patents in
Brazil and U.S. demands that Columbia and Mexico do more to
halt illegal drug trafficking. Canada is angry over a U.S. ban
on Canadian potatoes from Prince Edward Island because of
worries about a potato fungus.
The nations of the Americas are also distracted by calls to
strengthen fragile democracies in such countries as Haiti and
boost the economies of much of the Caribbean. ``Economic
growth will never be lasting unless our political system is
democratic and truly representative,'' said Mexico President
Vicente Fox. Added Prime Minister Kenneth Anthony of the tiny
island of St. Lucia: ``The new gospels of globalization and
trade liberalization threaten...the smallest and most
vulnerable states.''
In response, the U.S. offered to fund the salaries of
15,000 teachers over four years in the Andean nations and pay
for a program to fight the spread of AIDS in the Caribbean.
Meanwhile, all other nations are nervously eyeing developments
in Venezuela, where President Hugo Chavez has been speaking up
on behalf of Cuban dictator Fidel Castro, the only hemispheric
leader barred from the summit. With Chavez appointing more
military officers than civilians to high government posts,
other nations are worried that Venezuela may slip back to
military rule, disqualifying it from full participation in the
trade liberalization process.
The call for democracy was one of the few concrete
agreements reached by the leaders in a process still not even
scheduled for completion for four-and-a-half years. But by
that time, the Quebec declaration may be recalled more for its
unwarranted optimism than its achievements |