Important talks on trade liberalization within the western hemisphere are under way in Miami, Florida. Hopes are not high that the 34 participating nations - all hemispheric states except Cuba - will make good on their pledge to create a free trade area of the Americas (FTAA) by 2005.
When the FTAA was launched in 1994 hemispheric leaders believed that a common market extending from Canada to Chile would boost trade and prosperity. Nine years later the leaders are less confident and even divided over whether freer trade would boost economic growth. Peter Hakim is the head of the Washington-based Inter-American Dialogue.
"Ten years later Latin America is in the midst of an economic slump. Politics in many countries are in turmoil and the region is in a much more sour mood. Some of the ideas that seemed so promising in the early 90s now simply don't seem quite so promising," he said.
Argentina, which pursued a rigorous free market program for ten years, endured a devastating economic collapse in late 2001. Brazil, Latin America's biggest economy, elected a leftist populist as president one year ago. Two months ago in Cancun, Mexico Brazil led the opposition that blocked progress on a new global trade accord.
Gary Hufbauer, a trade specialist at Washington's Institute for International Economics, is doubtful that much will emerge from the Miami meeting. He is also not optimistic about the World Trade Organization talks that were derailed at Cancun.
"No one wants [at Miami] the kind of blow up that occurred at Cancun, not even Brazil, which led the G-21 in Cancun. So I expect the outcome to be reasonably satisfactory at Miami. Now, turning to the WTO, I will be very pleasantly surprised if negotiations are resumed in a significant and substantive way next year," he said.
Peter Hakim expects the Miami ministerial meeting to produce only modest results. "I think what's going to happen is that they're going to find some minimal agreement so that they can keep negotiating and not end the discussions in some kind of acrimony," he said.
The original intent of the Miami meeting was to set rules for regional trade and begin talks on opening national markets.
On another trade issue, Mr. Hufbauer predicts that the United States will soon modify its protective tariffs on steel that have been declared illegal by the World Trade Organization. He believes that Washington will compromise with the European Union, reducing it steel tariffs in return for cancellation of planned EU retaliation.