Winners and Losers at End of the Trade Talks

Last week's hemispheric trade meeting in Miami was hailed by most participants as a breakthrough that will give new momentum to negotiations to create a 34-country Free Trade Area of the Americas. But some countries won more than others, and others came out as net losers.

The ''Declaration of Miami'' signed Thursday by the 34 participating trade and foreign ministers amounted to a broad agreement that allows countries to participate at their own preferred pace and scope in the negotiations, which are scheduled to end on Jan. 1, 2005.

Rather than aiming at the regionwide comprehensive free-trade deal that was envisioned at the 1994 Summit of the Americas in Miami, the ministers agreed last week to produce a two-tier process. In essence, countries like Brazil and Argentina, which don't see much to benefit them in the current U.S. trade offers, will have the choice of negotiating a slow-motion, limited free-trade agreement with the United States, while enthusiastic countries such as Colombia or Peru will be able to sign more comprehensive, fast-track bilateral deals.

The Miami consensus was largely reached because both the United States and Brazil – the two co-chairs of the negotiation – were under strong domestic business and political pressures to make the meeting a success after the collapse of previous trade talks in Seattle, Cancún and Port-of-Spain.

If last week's meeting had been an Olympic competition, the outcome would have looked like this:

• Gold medal: The four Andean countries – Colombia, Peru, Ecuador and Bolivia – which, in addition to participating in the overall FTAA process, signed a separate agreement with the Bush administration to start fast-track bilateral free-trade negotiations early next year.

The Bush administration announced it will start the talks initially with Colombia and Peru.

These countries may use their close ties with the Bush administration to extract individual concessions that they may not be able to get in the hemisphere-wide negotiations.

1. Silver medal: Panama and the Dominican Republic, which also signed bilateral deals during the Miami meeting to start fast-track trade negotiations with the United States.

Although they have less political clout than Colombia, they will be able to avoid being left behind the five Central American countries that are already negotiating a bilateral free-trade deal with Washington.

2. Bronze medal: The United States. While U.S. trade negotiators had to water down the Miami Declaration to accommodate Brazil's concerns about an uneven playing field, the Bush administration in effect resurrected the FTAA process, which in recent months seemed almost doomed to failure.

3. Consolation prize: Brazil's ambitious diplomatic offensive to become the leader of a unified South American bloc that would negotiate with Washington from a position of greater strength collapsed in the face of the Andean countries' decision to negotiate trade agreements with the United States.

And Brazil virtually conceded that hemispheric free trade will help more than hurt. In the last 18 months, Brazil's President Luiz Inácio Lula da Silva has gone from denouncing the FTAA as a scheme for Latin America's ''annexation'' to the United States, to seeking to postpone the agreement until 2007, to accepting the goal of a basic agreement by the 2005 deadline.

On the plus side, Brazil, for the first time in recent months, did not come out as the spoiler and managed to get the United States to accept the idea of a watered-down starting base for the FTAA negotiations.

In the losers' corner, I would put Canada, Mexico and Chile, which already have free-trade agreements with the United States. They may now face greater competition from countries such as Brazil, which under the new negotiating plan will gain better access to the U.S. market without making the big sacrifices – such as allowing a flood of U.S. food imports – that countries like Mexico had to do to enter their free-trade deals Washington.

The all-time loser was Venezuela, which tried unsuccessfully to derail the Miami agreement and was the only Andean country left out of the sub-regional deal to enter free-trade negotiations with the United States.

My own guess is that the FTAA will move along and that some version of it will be signed late next year. But following last week's Miami agreement, it may be a club in which some countries will be preferred members and others will only have access to certain activities.