The Bush administration hopes the new law giving the president enhanced authority to negotiate trade deals will boost efforts to create a western hemisphere free trade zone by 2005. But a key country in the proposed Free Trade Area of the Americas Brazil is reacting cautiously.
President Bush signed a bill earlier this week giving him the authority to negotiate trade agreements without having them changed or amended by Congress.
Trade promotion authority, more commonly known as Fast Track, allows the president to reach trade agreements that Congress can approve or reject but not change. The authority, which had lapsed in 1994, will last through 2007.
In signing the bill, President Bush pledged to move forward rapidly in negotiating trade deals. Trade agreements with Chile, Singapore are at the top of the list.
But Fast Track is also expected to boost lagging efforts to create the hemisphere-wide free trade zone in the Americas by 2005. The Free Trade Area of the Americas, comprising all the hemisphere's nations except Cuba, was first proposed in 1994. But progress in negotiating the FTAA has been crippled by the reluctance of the U.S. Congress, until now, to give Fast Track authority to the president. Potential trading partners have been reluctant to negotiate an agreement with the U.S. government that could later be amended by Congress.
Brazil, as the largest and most powerful country in Latin America, is key to the success of the FTAA process. But its reaction to the new Fast Track authority has been somewhat cautious.
Brazilian Foreign Minister Celso Lafer welcomed the signing of the bill as a positive development. But he said the U.S. government will have to offer attractive incentives to Brazil and other Latin American countries if the FTAA is to become a reality.
Brazil's caution stems from various factors. Brazilian International Relations professor Williams Goncalves said one reason is that there is a lack of consensus over the FTAA. "There are a lot of doubts about whether the FTAA is right for Brazil at this time," he said. "I would say there is a lack of consensus and contrary points of view within the economic and intellectual elites, and even within Brazil's diplomatic corps. There is the feeling that there are too many inequalities between Brazil and the United States, and that only a few sectors in Brazil would benefit from a free trade agreement while other sectors of the economy would suffer."
Brazil also is concerned over various clauses in the Fast Track law, one of which calls for consultations with Congress over negotiations to reduce agricultural tariffs. As a major exporter of beef, soya, and other agricultural products, Brazil wants to ensure its goods have greater access into the U.S. market under the FTAA. The Brazilian government strongly criticized the recent U.S. farm bill as being protectionist.
Analyst Goncalves said these concerns over protectionism in the United States have strengthened those who oppose the FTAA in Brazil.
"Even though President Bush has received these powers from the Congress, the demands by various productive sectors of the American economy will make the negotiations very difficult," he said. "These sectors have significant representation in the U.S. Congress, and they will not accept a free trade agreement that causes losses for them. This has been observed in Brazil, and has reinforced the forces here that oppose the FTAA. So despite the mandate President Bush has received, he'll have difficulty in negotiating an accord because of the protectionist sentiment of certain sectors in the United States."
The Brazilian government said it is still studying the effects fast track will have on the process to create a hemisphere-wide free trade zone. But the mood in Brasilia can be summed up by one top official's comment, who described the approval of Fast Track as a positive signal but added much will depend on what the U.S. government is disposed to negotiate.