Planned to accelerate the negotiation pace towards the creation of the Free Trade Area of the Americas (FTAA), the minister meeting scheduled to begin Sunday the 16th, in Miami, is likely to fail. Brazil, Argentina and its two partners in the Mercosur, Uruguay and Paraguay, with the help of Bolivia and Venezuela, and possibly of Peru, are ready to block the process because of American intransigence. The United States wants to maintain its fat subsidies to its farmers and force all of its neighbors in the Americas to fully open governmental procurement and services and to accept an intellectual property law that would kill, for example, Brazil's generic medication industry.

Aware of the hostile environment, American Trade secretary, Robert Zoellick, jumped the gun and called an emergency meeting for Saturday, in Washington. Chancellor Celso Amorim had to abandon President Luiz Inácio Lula da Silva's delegation in Africa, on Thursday the 6th, to participate in the meeting. The inconvenient trip the head of the Itamaraty had to make is unlikely to change Brazil's position, however. "No proposal was sent, whether new or old. I don't see how the picture will change," said a diplomatic source.

The fact is that the Mercosur, noticing that the FTAA is but lingering on, has already found a way out: it has accelerated its negotiations with the European Community to form a powerful free trade area. The negotiations have been going on for four years, even if somewhat behind the bushes, but with tangible results. "The divergence there still is between us is the agricultural matter, because of the European subsidies. But I believe we will make advancements in this field," said Celso Amorim. Brazil and Argentina trust the Europeans will flexibilize their position in the minister meeting in Brussels, scheduled to begin four days before the Miami gathering.

Concerned with the future of the block, Zoellick called a meeting that took Amorim away from Lula's delegation to Africa.

Cuba - "The ball is in the European field. Our market access proposal is ready and if they are smart, they will take a couple of steps back in the agricultural matter. On the counterpart, we will open the Mercosur and will try, in the short term, perhaps even before the end of 2004, to make a true agreement that will change the world's economic panorama," celebrated Argentina's ambassador to Brazil, Juan Pablo Lohlé. In fact, it was a colleague of his loaded in Havana, Raul Taleb, who authored the main provocation of the week: he suggested Cuba's entry in the Mercosur, for the despair of the American FTAA negotiators, whose habitual posture is simply to ignore Fidel Castro's country.

The negotiation with Europe, in fact, does not exclude the block's participation in the FTAA as long as the draconian American rules (even stricter than the WTO'S) change. This was clear in President Lula's speech during the closing ceremony of the 4th Mercosur European Union Business Forum, on Wednesday the 29th, in Brasília. "They say we don't want to negotiate the FTAA. Quite the contrary. What we don't want is to take a beating in the FTAA. If we can get a draw, that will be great. What we want is to defend our economy, our industry, our agriculture, our trade, our jobs, and our sovereignty," he said.

The audience, formed by major European and Brazilian executives, applauded out of satisfaction. The gathering was a good example of the fact that while the US and the Mercosur continue struggling with the FTAA, the relations with Europe are going very well, with an agreement being sewn quietly, but with competence, both by the diplomats and by the business sectors.

The two blocks have already weaved deals in the automotive, siderurgy, petrochemical and medication sectors, among others, and they are now arranging the details in governmental procurement and intellectual property matters. "We are greatly interested in forming this bi-regional block. And President Lula's presence, giving the Mercosur a lot of energy, enhances our expectations to levels that were unthinkable a few months ago," said Guy Dollé, the Forum's European co-president.

The European Connection
Eduardo Hollanda and Leonel Rocha