MercoPress. South Atlantic News Agency

Tough FTAA negotiation round.

United States multilateral and bilateral approach to tariff reductions and its insistence in protecting US farm subsidies in the framework of the current Free Trade Association of the Americas talks in Panama have stalled agriculture negotiations.

The 34 countries of the three Americas, with the exception of Cuba, will be discussing during the whole week tariff reductions with the purpose of preparing a draft that should be the basis for the block's official launching in January 2005.

However the US proposal regarding agriculture surprised its counterparts. For the Caribbean Community, US is willing to accept an 85% tariff reduction; 64% for Central America; 68% for the Andean Community that includes Ecuador, Bolivia, Peru, Colombia and Venezuela; and for Mercosur, Brazil, Argentina, Uruguay and Paraguay, just 50%.

As to farm subsidies, United States proposes the issue should be addressed in the World Trade Organization rounds, while most of other countries, particularly Mercosur members, insist they should be considered in the framework of FTAA.

Mercosur sources indicated that the US move had a political motivation and was directed to attract the 14 Caribbean countries, (most of them rely heavily on US tourism and aid), and so creating a sort of majority block in the functioning of the FTAA, almost half of the 34 members.

Mercosur main members had anticipated that before considering any tariff reduction they would link elimination of farm subsidies, "to the continuation of the talks".

However and in spite of the tough agriculture negotiations, the Panama discussions seem to have advanced in other areas such as investments and government purchasing. The meeting that follows a previous one at ministerial level last November in Quito, Ecuador, is also expected to advance in other non agriculture areas such as market access.