US Makes Public Its Position on FTAA Negotiating Groups

 
In January, in the waning weeks of the Clinton administration, the US Trade Representative took the unusual step of releasing to the public the US government position on each of the nine FTAA negotiating groups. This show of transparency and openness may be a first step toward civil dialogue and could encourage Latin American and Caribbean governments to head in the same direction.

The move was also a political one. When some of the bracketed text chapters are inevitably leaked to the press during the coming year, it will be easy to define the US position in each of them. The release of the negotiating positions also sets a marker for the new administration, although Bush has yet to express any differences on the issues in question. Some Latin American governments anticipate that he may be softer on labor and environmental criteria, but the administration will need to show some progress in these areas to gain support from Democrats for fast track negotiating authority.

In the meantime, the USTR will continue its consultations with interested parties in the United States to ensure that the full range of views is taken into account in the development of US positions. The US International Trade Commission has already performed an economic analysis of the probable economic effects of an agreement, and the Trade Policy Staff Committee is conducting an environmental review of the FTAA. The review is led by USTR and includes all of the nation's environmental agencies.

Below are summaries of the US position on each of the nine negotiating groups. Most of the groups have finished their preparation of bracketed texts for review by the Trade Negotiating Committee, which will send them on to the Trade Ministerial in Buenos Aires in April. The ministers will provide directions for conducting the next stage of negotiations in preparation for the Quebec City Summit.

Agriculture. The US seeks elimination of export subsidies and exclusive trade rights granted to state companies. It supports sanitary and phytosanitary measures that are WTO consistent and do not unduly restrict trade. The US believes that FTAA countries should collaborate to formulate these measures and develop international standards in existing international organizations.

Competition Policy. The US promotes the principles of transparency, due process and nondiscrimination, which it considers important to antitrust enforcement. The US believes that each FTAA country should have a competition agency at the national or subregional level responsible for enforcement of antitrust laws, with adequate powers and enforcement autonomy. It believes FTAA countries must cooperate to achieve effective competition law and policy development, and it supports the inclusion of rules on official monopolies and state enterprises in the FTAA. Such rules would ensure that when the state participates in commercial activity, FTAA trading partners are not subject to discrimination. The US also supports the creation of a competition policy review mechanism.

Dispute Settlement. According to the US position, the complaining government should request consultations with another FTAA government with which it has a dispute. If consultations do not result in resolution of the matter within 30 days, the complaining FTAA government may request the establishment of an arbitration panel comprised of qualified experts. The US proposal provides for the establishment of Model Rules of Procedure for panels to follow.

Government Procurement. The US supports nondiscriminatory treatment for government procurement contracts and goods and services produced within an FTAA country. Any supplier of goods and services from an FTAA country should be given the same nondiscriminatory consideration as the goods, services and suppliers of the FTAA country whose government is awarding the contract. The US believes that the services chapter should cover measures taken by central, regional or local governments and authorities as well as nongovernmental bodies in the exercise of powers delegated by such governments or authorities. The US has indicated the need to identify, where appropriate, supplementary disciplines for specific sectors and to develop specialized provisions for financial services. It believes that MFN treatment should apply, in principle, to all service sectors and service suppliers; however, it recognizes that FTAA countries may need flexibility for a limited number of sectors or measures.

Intellectual Property Rights. From the US perspective, intellectual property protection in the FTAA means having all members join the WIPO, do away with compulsory patenting, narrow the categories for refusing a patent, and limit withdrawing a patent to the same reasons for refusing to grant one.

Subsidies, Antidumping and Countervailing Duties. It is the goal of the US to ensure that FTAA countries maintain effective trade remedies based on the principle of fair, as well as free, trade. The US believes that the FTAA should make no changes to WTO rules on antidumping and countervailing measures and should ensure the right of each country to maintain and apply trade remedies, address the use of antidumping and countervailing duty measures, and identify possible options for deepening the disciplines on subsidies. There is a significant divergence of views on how to approach these issues within the FTAA.

Services. The US believes that the scope and coverage of the services chapter of the FTAA should be comprehensive, covering all service sectors and suppliers. The US believes that MFN treatment should apply, in principle, to all service sectors and suppliers, but recognizes that FTAA countries may need flexibility for a limited number of sectors or measures.

Investment. The US proposes that the FTAA chapter on investment afford investors from an FTAA country the better of national or MFN treatment. The US believes that expropriations must be for a public purpose, nondiscriminatory, in accordance with due process of law, and accompanied by payment of prompt, adequate and effective compensation. The US opposes compensation for losses from transfers of funds as well as performance requirements.

Market Access. The US position on methods and modalities of tariff reduction advocates fair and reasonable procedures to ensure that the benefits of free trade are broadly distributed. It provides for rapid reduction of most duties, while taking into account product sensitivities in a framework that is fully consistent with the disciplines of the WTO. Keeping in mind that some industries will need more time than others to adjust to an open market, the US proposes that the FTAA countries establish three different categories, or "baskets," of tariff reduction. Regarding nontariff trade barriers, the US believes that the FTAA should require member countries to grant national treatment to goods from any other FTAA country. It urges prohibiting consular transactions, establishing simple procedures for the temporary admission of goods related to business travel, permitting duty-free entry of commercial samples and advertising materials, and developing transparency provisions for both import licensing procedures and fees imposed in connection with import or export. The US seeks rules of origin that are objective and transparent for ease of administration and compliance.

www.ustr.gov US Department of State USTR