FTAA: Election-Year Politics Could Complicate Hemispheric Trade Talks

MIAMI -- An international summit this month could move the Western Hemisphere toward becoming a free trade zone. But with an election less than a year away, the talks could also emerge as a thorny political issue in next year's presidential election.

Florida expects to be at the heart of the Free Trade Area of the Americas, the proposed $13 trillion market that would serve 800 million consumers in 34 countries. Trade ministers from throughout the Americas will gather for five days of crucial negotiations in Miami beginning Monday.

Local business leaders, backed by Gov. Jeb Bush, want Miami to become home to the FTAA's headquarters and reap the benefits of enhanced trade and commerce. But Florida's sugar and citrus growers, allies of President Bush and his younger brother in the past, fear the trade talks could lead to the elimination of tariffs, opening them up to competition from cheaper produce from Brazil and potentially dooming their industries.

"If we do not prevail in this, nothing else matters," said Squire Smith, a Winter Haven citrus farmer and a member of Florida Citrus Mutual, which has launched a public campaign to oppose the proposed pact. "We won't be around to argue about it as an industry."

Outside of Florida, the re-emergence of a national debate on free trade could energize labor unions in key battleground "Rust Belt" states and complicate negotiations. Unions, traditional allies of Democrats, fear the depletion of jobs and weakened environmental standards from the talks and plan to join the thousands of protesters expected in the city's downtown.

"The upcoming elections are going to make trade negotiations more difficult," said Terry McCoy, a professor of Latin American studies and political science at the University of Florida. "Trade is going to be an issue in the election -- it's going to be a big issue in the Democratic primaries."

Analysts predict next year's election could hinder substantial progress toward an FTAA agreement by the January 2005 deadline, with the administration and Congress possibly unwilling to complete a major trade deal that could alienate key votes or provide ammunition for opponents.

Besides eliminating tariffs, Brazil and its partners are pushing the United States to drop subsidies for farmers. Observers say the Bush administration would be reluctant to advance a deal that might threaten Midwestern farmers, steel workers in the nation's Rust Belt and sugar and citrus growers in the South.

"One of the things you can count on is that this administration is not going to give away the store -- especially not with an election coming up," said Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland.

Florida's citrus and sugar industries have taken to the airwaves in recent months to build public opinion for their cause. The state's $9 billion citrus industry has aired ads featuring Tampa Bay Buccaneers coach Jon Gruden opposing Brazil's efforts to lower the U.S. tariff on orange juice imports.

Florida's citrus farmers fear the removal of trade protections would allow Brazil, the world's top orange producer, to siphon business with lower prices they would be unable to match. Workers also fear any loss in business would cost them their jobs.

Labor unions working in the sugar industry recently aired radio ads in Miami warning "the Bush plan will put thousands of skilled Florida machinists, technicians and engineers out of work." Similar ads are running in Louisiana to keep sugar out of negotiations on the Central American Free Trade Agreement.

"This concern is really widespread," said Robert Coker, a U.S. Sugar Corp. senior vice president. "We're getting down to the wire and I don't think our industry has gotten any assurances that we aren't going to be put out of business."

In Miami, meanwhile, a successful round of talks could bolster the city's hopes of landing the FTAA's permanent secretariat, or headquarters. The city is competing with Atlanta; Panama City, Panama; Puebla, Mexico; and Port of Spain, Trinidad.

Jorge Arrizurieta, executive director of Florida FTAA, stresses the state's long-standing trade partnerships to the Americas, Miami's role as a dominant transportation hub to Latin America and the city's diversity and large diplomatic community.

"It's not about a new friend or a new image, it's about ratifying old ties," Arrizurieta said.

Both Arrizurieta and the group's chairman, Chuck Cobb, are prominent Bush allies. Arrizurieta was vice chairman of George W. Bush's presidential campaign in Florida and later nominated by the president to represent the United States on the Inter-American Development Bank. Cobb served as U.S. ambassador to Iceland during the first Bush administration and developed economic policy on the governor's transition team.

Jeb Bush has aggressively courted support for the headquarters, and progress on that front could provide another economic development laurel in Florida and boost his brother's standing as he seeks re-election in the state that decided the presidency in 2000.

The governor says his brother's decision on backing a U.S. city for the headquarters -- either Atlanta or Miami -- "will be based on the merits of the location." The eventual winner must be approved by the 34 nations that comprise the trade group.

Jeffrey Schott, a senior fellow at the Institute for International Economics in Washington, D.C., said the talks could drag out into 2005 or 2006, lessening the potential for conflicts in the presidential campaign. He noted that the most sensitive issues are not usually addressed until the final days of negotiations and a concrete agreement could be far off.

"It will take some time to put the deal together because of the complexities of the talks," Schott said. "We're talking about an agreement among 34 countries involving some of the poorest and smallest countries of the world and the largest countries of the world." (AP)