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On November 19 at a shortened hemispheric economic summit in Miami, it was announced that the Bush administration had notified the US Congress of its intention to begin free trade talks with Panama. Such notification is required at least 90 days before the start of any such negotiations under the US “fast track” legislation.”

Mireya Moscoso, who was there with US trade representative Robert Zoellnick for the announcement, called it an “historic milestone” that would “set the relations between our two countries for the next hundred years.” Panama’s ambassador in Washington, Roberto Alfaro, said that the starting point for negotiations would be a combination of clauses from proposed free trade deals between the US and Chile and the US and Singapore.

So is Panama first in line in the Americas? Actually, no. US-Panamanian talks will probably begin in April, but no date has been set. The US is going after free trade in a series of talks that include negotiations with the Central American countries as a bloc, another similar process with the allied MERCOSUR countries of Brazil, Argentina, Uruguay and Paraguay, possibly another round with some collective of Caribbean countries, and bilateral talks between the Americans and Panama, Colombia, Ecuador, Peru and Bolivia. The talks with Chile are fairly advanced, but the Bush administration doesn’t seem eager for the fight that’s likely in Congress when they get to a ratification stage. Of the bilateral processes announced at Miami, only the one with Ecuador has an agreed starting date.

The Miami summit was accompanied by the expected mass protests and a few rumbles between police and militants, but ended early when, in order to avert an abrupt failure with a US election year looming, the Bush administration accepted a Brazilian proposal for a “Free Trade Area of the Americas Lite,” wherein intellectual property rights, farm subsidies and other issues that probably would have torpedoed the talks will be left to worldwide negotiations via the World Trade Organization. In turn, WTO talks on these subjects have remained stalemated since the failure earlier this year of a ministerial summit in Cancun, Mexico after a group of more than 20 countries led by Brazil, China, India and South Africa resisted US and European Union pressures on farm subsidies and other issues.

The Moscoso administration has two priorities. One is to get the headquarters for any integrated hemispheric trade organization located in Panama. The main competition is from Florida, and if that state is a presidential election battleground like it was in 2000, it’s a safe bet that the Bush administration will not accede to Panama’s desires before Mireya leaves office. The second Moscoso aim is to sign a deal before she leaves office next September, and not only the opposition parties but also farm interests, labor unions and veteran diplomats warn that quick acceptance of the form that the Americans offer would be against Panama’s interest and would generate strong public protests.

One outer limit to a longer free trade negotiating process comes from US law. The fast track legislation expires in 2005, so from the American perspective there is an impetus to get an agreement before the Congress sometime next year.



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Business & Economy Briefs
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At the former Paitilla Airport
Panama and the Free Trade Area of the Americas

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