May 12, 1998

EU & US GOING AHEAD WITH TAFTA/NTM TALKS ?

Geneva, 11 May (Chakravarthi Raghavan) -- The European Union and the United States are still planning, at the EU-US summit on 18 May, to signal their intention to go ahead with negotiations for a Transatlantic Free Trade Agreement (TAFTA), and adopt and issue a formal launch statement and a negotiating framework document, according to non-governmental organizations (NGOs) tracking EU-US trade moves.

Based on information flowing from an EU Commission briefing to Brussels-based EU missions, on the preparatory work at official levels on the EU-US summit, the NGOs have issued an alert about the moves and warned that TAFTA, also being described as the New Transatlantic Marketplace (NTM), is not dead but very much alive.  

The original proposal for TAFTA (like the NAFTA uniting Canada, Mexico and the US), was subsequently 'scaled down' into the so-called Transatlantic Marketplace, but it has not been clear whether it has been a semantic modification to disarm US-NGO critics or a real scaling down.  

The US administration would certainly need some authority (fast-track approach) from the Congress for negotiating a wide-ranging and sweeping free trade agreement. In its absence, and the unlikelihood that Congress will grant any such authority until at least after the Presidential elections in 2000 and a new man in the White House in 2001, independent trade analysts in Washington say, the US administration will be pushing for accords that would not need changes in US laws or congressional endorsements.  

But perhaps, an NTM could be so fashioned as to need little or not changes in Congressional laws. 

At the time of the April OECD Ministerial meeting, which resulted in the suspension of negotiations for the Multilateral Agreement on Investment (MAI), it was reported that because of opposition of France -- President Jacques Chirac had publicly rebuked the EC Commissionner Sir Leon Brittan over his initiative -- the EC Council of Ministers, at their April meeting, had not endorsed the move or granted authority to Brittan to go ahead. 

The NGO alert said that despite the earlier reports out of the EC Council of Ministers meeting, the official level preparations for the EC-US summit on 18 May, to be held in the UK after the G-7 summit, envisage an announcement on the formal launch of a 2-year TAFTA negotiations. 

According to the briefing at Brussels for the EU missions, the NGO alert said, the TAFTA negotiating agenda would include investment issues, genetically modified organisms, ending sanctions against enterprises and companies (by the US federal entities and state and local authorities) over investments in specified third countries, on grounds of human rights violations and abuses in that country.  

Also to be included would be harmonisation of food, health and environmental standards.  

The NGO alert is not clear on the 'trade agendas' that would be negotiated, and whether it would include agriculture (which the US is keen on, but which France and some others oppose).  

At the US-EC summit preparatory talks, US officials were reported to have said that since then they had held bilateral discussions with the French officials, and that this seemed to confirm that the actual French position (on the transatlantic talks) was not as much opposed as the public statements made it appear. 

The US side was reported to have indicated that it would welcome a statement (out of the US-EC summit) on the NTM negotiating program and one that would be as specific as possible.  

The US side has also been reportedly advised that NTM talks could best be promoted by the US settling some pending issues about US unilateralism under various investment sanctions laws (by Federal, state and local authorities). 

The US and the EC are expected to attempt to win over critical NGOs, by announcing that labour and environment issues would also be on the NTM negotiating agenda.  

However, this is only expected to include, as in the case of the negotiations for Free Trade of Americas Agreement (announced at the Santiago Second Americas Summit), private sector advisory groups to receive inputs from the NGOs on these issues. 

The NGO alert said that "neither labour nor environment issues nor their relationships to investment/trade issues" would be negotiating topics themselves.  

The US-EU official preparatory talks for the summit on 18 May, would also appear to have received a cautionary advice from the United States against any call for a millennium round at the WTO ministerial, either from the EU or the WTO head, Renato Ruggiero (in any statement he might make at the WTO meetings or the 'celebrations of the multilateral system). The EC wants to launch such a round at a 1999 WTO ministerial, with the new issues raised at Singapore, and now at Geneva. 

But neverthless, Sir Leon Brittan could be expected to air this at the WTO ministerial. 

The draft Ministerial text planned to be issued at the Geneva 2nd WTO ministerial, which is being 'negotiated' among delegations on the basis of a Ruggiero draft, avoids specific mention of "a new round" with new issues, but is so worded as to call for preparations to be undertaken at the General Council on implementation issues, socalled built-in agenda, and subjects raised at Singapore, and any at Geneva.  

At the informal heads of delegations meeting at the WTO last week, some key delegations from the developing countries have said that they would have difficulty in providing consensus for such a text.  

Meanwhile, there is no word still whether President Clinton will come for the 50th anniversary 'celebrations' of the multilateral trading system. When originally planned, the 'celebration' was intended to link the WTO with the 1948 Havana Charter and the Bretton Woods architecture, and thus claim legitimacy for WTO neo-liberal trade order. As such the WTO officials and leading trading nations had been cool to earlier suggestions for the 50th anniversary meeting to be held in Havana. But the Cuban President Fidel Castro is expected to be at the event (on 19 May), joining another nine heads whose names the WTO announced last week.  

A reportage in the Tribune de Geneve (of WTO head Renato Ruggiero's talks with Swiss economic journalists last week), said Ruggiero viewed the resistance to the WTO and neo-liberalism, and the problems emerging from it, as coming from "a little minority, with a ridiculous vision, marxists and with a vision of the past."