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US, 5 Central American Nations Conclude Trade Talks in Houston - 2003-10-25

Trade negotiators from the United States and five Central American nations wrapped up their latest meeting Friday in Houston, expressing optimism about reaching an agreement by the end of this year. There are still thorny issues to be worked out before the final round scheduled for December.

After five-days of meetings at a local hotel, the trade delegates said they had made progress in some key areas, but had left some of the more difficult problems for later. The negotiators from Guatemala, Costa Rica, Honduras, El Salvador and Nicaragua agreed to drop tariffs on a wide range of U.S. products immediately after a comprehensive trade agreement takes effect. Those products include apples, cherries, sweet corn and wine.

The agreement the regional representatives seek is modeled on the North American Free Trade Agreement, known as NAFTA. The Central American Free Trade Agreement would be known as CAFTA. Talks began in January and are to conclude in mid-December at a meeting in Washington.

But another meeting is likely to take place before that to deal with unresolved issues such as the Central American demand that the United States lower barriers to sugar from the region and the U.S. demand that countries like Costa Rica open their publicly-owned telecommunications industries to outside investment.

University of Houston International Law professor Stephen Zamora served as monitor for a panel discussion with trade negotiators Friday and came away with the impression that outstanding issues will either be resolved or set aside in the weeks ahead in order to reach some kind of agreement. He says, however, that a better agreement could be achieved if the United States offered more incentives to the poor nations of Central America. "If we want to have a stable region, we cannot have one in which there are such disparities in income," he pointed out. "We cannot say, 'You must open up your society to foreign investment, U.S. investment, you are going to open markets and have free prices, but it is your responsibility to deal with poverty issues.' I think the United States has to get more engaged."

U.S. negotiators say they want a comprehensive agreement that is fair to all parties. Washington has offered a modest increase in sugar imports from Central America in exchange for more openings to investment in the region, but the Central Americans say that is not enough.

Still, observers at the Houston meetings from government and the business community agreed that some form of agreement will be reached in December. U.S. Congressman Kevin Brady, who attended some of the meetings, says a final agreement could be put before Congress by early summer of next year and would likely be approved.