Earlier, the WTO Disputes Panel had ruled that the US steel tariffs are in contravention of the Treaty, in effect authorizing the EU to impose retaliatory tariffs if the US does not act to remove them. And the US has imposed quotas on imports of textiles from China, to the latter's evident displeasure-leading to a marked decline in the value of the US dollar.

These developments, first, confirm that significant shifts in the balance of power in global trade relations are taking place. The new model of the FTAA is as much of Brazilian vintage as it is of the US. The US is also being constrained by relations of mutual trade interdependence with the EU and with China. And the Northern bloc is being forced, to a much greater degree than in the past, to take account of the views of the countries of the South.

More specifically, they suggest the unlikelihood that there will be a multilateral global or hemispheric regime to govern trade in services, investment and government procurement. The WTO will not reach agreement on negotiating these areas in the foreseeable future. And in the FTAA no single, uniform set of disciplines will apply. In the words of the Miami Declaration, "countries may assume different levels of commmitments....negotiations should allow for countries that so choose, within the FTAA, to agree to additional obligations and benefits".

Another implication is that much of the action in this hemisphere will likely shift to bilateral and plurilateral trade negotiations. The Miami Declaration's reiteration that "the FTAA can co-exist with bilateral and sub-regional agreements" sanctions both the US thrust to negotiate FTAs with the Andean countries (Venezuela excepted), Central America, the Dominican Republic and Panama; and the MERCOSUR strategy of building a South American bloc with the Andean Community.

In this context the sub-regional trade agreements negotiated among regional countries (e.g. Mexico with Central America, Central America with the Dominican Republic, Caricom with the Dominican Republic, Cuba, Costa Rica, Venezuela and Colombia, etc.) now appears to have been a prudent insurance policy.

The question arises is: how great will be the market access afforded by the basic FTAA agreement vis-à-vis (i) the additional obligations and benefits negotiated under FTAA-plus provisions and (ii) those that will be available from bilateral and plurilateral agreements with the US?

There is no ready answer. The Miami Ministerial appears to have put everything back on the table. Details have been referred back to the FTAA Trade Negotiating Committee, whose next meeting is scheduled for February 2004 in Puebla, Mexico.

This will give time to all players to consider their options and strategies in the new FTAA architecture. They will be pondering the question: how much to put into the FTAA, how much to put into bilateral negotiations, and how much to put into consolidating its own regional grouping? For the smaller countries in Caricom and Central America, these are crucial questions.

Last week, too, ECLAC and the ACS convened an Expert Group Meeting on the FTAA: Selected Issues, Prospects and Implications for Subregional Groupings in the Caribbean. The material presented could not have come at a better time. Some of the papers are available on the ACS website www.acs-aec.org.

Professor Norman Girvan is Secretary General of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org

November 21, 2003