Bush scrambles to keep free trade plans on track at Americas summit

by Michael Langan

Thursday, January 15, 2004

MONTERREY, Mexico (AFP): US President George W. Bush won grudging endorsement Tuesday from other 33 Western Hemisphere leaders for his plan to launch an ambitious pan-American free trade zone next year.

However, the Summit of the Americas was divided over how best to combat spreading poverty in the region. And, the United States failed to have an anti-corruption clause included in the summit's final statement.

The free trade area, which would stretch from Alaska to Argentina, would be the world's largest, with a population of some 800 million and a 13-trillion-dollar gross domestic product.

But as the two-day summit closed, Argentine President Nestor Kirchner, half of whose country lives in poverty, lashed out at the US-backed plan, arguing "not just any Free Trade Area of the Americas will do."

"It will not be an easy road to prosperity," the Argentine president said.

"The deal should acknowledge (economic) differences. It cannot be a one-way street and it cannot be imposed." He joined leaders in urging the United States to drop farm subsidies.

Brazil, South America's largest economy, and key US oil supplier Venezuela fought to keep free trade off the summit agenda. But after intense haggling, leaders agreed in a declaration to endorse plans to finish negotiating the proposed Free Trade Area of the Americas (FTAA) by January 2005.

Some leaders warned the accord would not be easy.

"International trade can be a powerful factor in development. But it should be just and balanced, benefiting everyone equally," said Brazil's leftist President Luiz Inacio Lula da Silva.

Lula also insisted on governments' rights to pursue social, industrial, farm and science policies. US officials said Lula reaffirmed to Bush his commitment to launching the FTAA in 2005.

And "we must understand that the principles followed to the letter in the 1990s, the disappearance of the state, privatizations at any cost, were what led to ... the bankruptcy of our economy," Kirchner argued, calling for the deal to include safeguards and compensation for those hurt by economic integration as has been done in the European Union.

But the US president urged his Argentine counterpart to stick by his country's commitment to the International Monetary Fund in order to ensure further international financing.

Bush's strategy for the region is to expand the free trade that US, Mexican and Canadian officials say is key to economic growth.

But some Latin nations fear that free trade cannot solve social problems that undercut their stability and that it might not help the millions of poor fast enough.

Leaders also agreed on measures aimed to combat poverty, such as boosting multilateral credit for small businesses. They did the same at their last summit and poverty in the region has increased since.

Bush said after an earlier meeting with Canadian Prime Minister Paul Martin that Canada would be able to bid on a new round of reconstruction projects in Iraq.

Canada, which did not back the US-led war in Iraq, was excluded from taking part in the first round of lucrative reconstruction contracts.

Monday, Bush invited summit host President Vicente Fox -- with whom he had a warm personal relationship before Mexico opted not to back the US-led Iraq war -- to visit him at his Texas ranch in March.

Bush also addressed a key Fox concern by discussing migration issues. Bush had proposed a temporary guest worker system to legalize the status of millions living underground in the United States.

Half of the eight million undocumented workers in the United States are Mexican. The money they send home, amounting to 12 billion dollars last year, is Mexico's number-two source of foreign revenue, after oil.

Bush also briefly spoke of rivals Cuba -- not invited to the summit -- and Venezuela, saying the United States backs Venezuela's upcoming referendum, which could recall President Hugo Chavez.

The leftist-populist Chavez listened with a furrowed brow, then fired back in his speech that despite economic woes this year "with the invaluable help of Cuba and its literacy program, we were able to teach more than a million people to read in six months."

Meanwhile, the United States and Caribbean nations reaffirmed their determination to protect the region from terrorism. 

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