Andean Free Trade Agreement Written on December 1, 2004, by Eddie.
Negotiations resumed yesterday in Tucson, Arizona for the Andean Free Trade Agreement (AFTA) involving the Andean countries of Ecuador, Colombia, and Peru. Bolivia is participating as an observer. The trade in question not only includes goods and products crossing respective borders, but may also include measures to deregulate and privatize essential services such as water service, telecommunications, roads, and health care (in Latin America, obviously).
U.S. negotiators are looking for a greater liberalization of the Andean countries’ abilities to control business within their borders, a control that could potentially give preference to local vendors or nationally-owned companies. Other items on the U.S.’ agenda include greater restrictions on prescription drugs. The millions of poor in Latin American depend on generic versions of popular drugs, but the new laws may restrict access and extend monopoly rights for giant pharmaceutical corporations. Copyright and other patent laws are also on the table.
The U.S. is also looking to broaden investor-state legal mechanisms, which would give corporations the increased rights to sue governments in a third-party court. No longer would national laws apply within their own borders involving these lawsuits. These laws would provide greater leverage in protecting investments and other poorly negotiated agreements.
The Andean countries are simply looking for increased fairness, namely in the farm subsidy field. Subsidies provided to U.S. farmers have helped drive prices down to a point where it is often cheaper to import foreign food products than to produce them locally in these Andean countries. The lack of markets is only one of the reasons the Alternative Development program failed in Bolivia.
Subsidies have been a touchy subject in trade talks, and you might remember Brasil’s stance that pushed the issue to the forefront at the WTO meetings in Cancun in 2003. President Lula assembled other developing nations to form the G21 group to rally behind the elimination of these subsidies that would level the playing field for countries that have rich agricultural traditions. Trade fairness should be one of the top priorities in these talks.
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