SYNOPSIS OF EVENT

The First Issue Meeting of the FTAA Committee of Government Representatives on the Participation of Civil Society was held in Sao Paulo, Brazil, on 25 June 2003, and focused on agriculture negotiations.

The meeting proceeded in accordance with the agenda, attached hereto. The participants from civil society throughout the Hemisphere (see attached list) represented a variety of organizations from different spheres of civil society: non-governmental organizations, business associations, labor, academic sectors, indigenous community representatives, and agricultural producer groups, as well as representatives from the Brazilian Parliament and local governments. Also in attendance were several delegates from the SOC and the Negotiating Group on Agriculture. A total of eighteen countries participated in the meeting. See attached list.

The event was held at the headquarters of the Fundación Memorial de América Latina (Latin American Memorial Foundation).

The forum was formally opened with introductory remarks by Ambassador Luiz Felipe de Moredo Soares, Secretary General for South America of the Ministry of Foreign Affairs of Brazil, and by Luis Fernando Peredo Rojas, Chair of the FTAA Committee of Government Representatives on the Participation of Civil Society. Both speakers emphasized the need for civil society participation in the creation process of the FTAA and the importance of the issue selected as the focus of the meeting.

The Chair highlighted the efforts of the Ministers and Vice Ministers of the Hemisphere to increase two-way communication with civil society regarding the negotiations, enhance and sustain participation of the different sectors of civil society in the hemispheric initiative, and strengthen and deepen their consultation processes with civil society at the national level. Recent Trade Negotiations Committee (TNC) Guidance to the SOC (contained in TNC/22 and TNC/23, available to the public online at www.ftaa-alca.org) identified various mechanisms in order to achieve this goal, including the organization of FTAA issue meetings with Hemispheric civil society in rotating host countries. The Chair explained how this event fulfills this instruction. In addition, the Chair emphasized the Committee’s role as a conduit through which to work with civil society and clarified that the SOC is not an FTAA negotiating entity.

Ms. María Izabel Víeira, National Coordinator for Agriculture, from the Ministry of Foreign Affairs of Brazil, commented on the mandates of the Negotiating Group on Agriculture and the current status of the negotiations. She explained that the NGAG has based its work on the San José, Buenos Aires, and Quito ministerial mandates, as well as on the specific mandates of the TNC, and that the Group has produced a draft Chapter based on proposals submitted by the various delegations. Ms. Víeira further explained that the Group has reached some agreements, citing the elimination of export subsidies, although differences continue to prevail on other issues, such as support measures that affect trade. In this regard, some delegations feel that the issue should be treated multilaterally, in the WTO, while others insist that it should be addressed within the FTAA. The NGAG negotiates non-tariff measures, as well as sanitary and phytosanitary measures. One of the most significant agreements produced by the Group was to design an instrument whereby countries may notify non-tariff measures existing in the FTAA partners that are adversely affecting them. Finally, the NGAG has worked on market access negotiations. Delegations are currently working on improvements to market access offers.

Civil society participants spoke on a variety of topics, also mirrored in the written statements (see annex), which are summarized as follows:

1. - General remarks on the FTAA and its potential impact on the participating countries.
2. - Remarks on the FTAA process and the participation of civil society therein, including issue meetings such as the Sao Paulo meeting.
3. - Remarks on the issue of agriculture and negotiations within the FTAA process.

Clearly, there is a range of views on the impact of the FTAA: first, a position supporting the creation of the FTAA, given the positive and wide-ranging impact it will have on the economies of the countries, job creation, and poverty reduction. Agricultural producer groups and industry groups attending the meeting indicated that they firmly supported this position. Trade in agricultural products among the nations of the Western Hemisphere could be expanded substantially, if the many and varied forms of impediments to that trade were eliminated. Several delegations to the SOC also expressed their support for this position, explaining the importance of the negotiations in formulating clear trading rules for small countries.

- With regard to criticisms of the FTAA there were two distinct viewpoints expressed by some labor and academic groups, as well as NGOs: a viewpoint rejecting the FTAA altogether, and another stating that the FTAA in its current form needed to be dramatically improved.

- Some oppose trade liberalization agreements and the globalization process, because they generally view the latter, and by extension the FTAA, as a process that limits national sovereignty, confirms the status of rich and powerful countries, and perpetuates current poverty levels in developing countries. Some speakers clearly opposed the negotiation of this type of agreement, regardless of its outcome.

- Other participants emphasized that the FTAA needed to be modified to address the following significant issues: differences in the levels of development and size of the economies, in infrastructure and human capital, and the existing asymmetries regarding access to capital and technology for development. Some representatives indicated that their support for the FTAA will depend on the integration model arising out of the negotiations and that they will only support a model geared towards overcoming asymmetries, including on agriculture, which negotiations are seeking to address.

- Other representatives noted that trade plays a significant role in development and poverty reduction, if properly managed, through the elimination of tariff and non-tariff barriers, and the modification of rules.

- Finally, representatives from some indigenous communities expressed their opposition to the process, stating that it threatened the core spiritual and cultural values of their communities.

Many organizations referred to the perceived lack of transparency in the process of creating the FTAA. In this respect, some organizations emphasized the difficulties in accessing the information available, both at a general level regarding the process and the impacts thereof on the population, and at a more specific level, on the negotiations themselves. They are dissatisfied with the type of documents that have been made public, which they assert do not provide any relevant information. It is not enough to have access to the draft Chapters, although the Ministers’ decision to release the first and second draft texts of the agreement was acknowledged. Many of those who took the floor indicated the limitations of the Internet as a means of communication with civil society, describing it as a non-democratic medium for many countries, particularly so in light of the fact that a very small percentage of the population of the Hemisphere enjoys access to the Internet. One representative insisted on the need for the Committee to disseminate documents more effectively. A number of participants requested that civil society be informed as to who made the proposals that are reflected in the draft Chapters.

More specifically, with regard to civil society participation in the FTAA process, some participants felt that the current mechanisms in place at the national and regional level needed to be strengthened and improved. In general, they indicated their desire to actively and substantively participate in the process, rather than simply being consulted. They argued that consultations and other similar mechanisms, such as the contributions in response to the open invitation, are insufficient and do not guarantee that the positions expressed will be taken into account during the negotiations.

Representatives of Argentine civil society reported that a forum will be held in Buenos Aires from 5 to 7 November 2003 in order to create an FTAA Permanent Committee on Civil Society. They propose that the forum be used as a channel through which to notify civil society on all pertinent events. The representatives requested the support of the Committee.

The participants also questioned the format of the issue meetings, indicating that the meetings could not be considered as consultations, but as forums for the exchange of ideas. It is worth mentioning that the Brazilian members of parliament and the local government representatives in attendance said that they were pleased with the format of the meeting, explaining that it enabled them to improve their understanding of the process, participate in the discussions, and prepare to cope with their future impact.

In regard to agriculture, both detractors and supporters of the FTAA argued for the elimination of agricultural export subsidies, and many supported eliminating trade-distorting domestic support measures. The participants mentioned that these types of measures have a protectionist effect, constitute unfair competition, and adversely affect the economies of the poorest countries. Differences still exist, however, on the arena in which these issues should be negotiated. Some organizations emphasized the benefit of negotiating rules on domestic supports in the WTO due to continued use of such supports by non-FTAA countries. Others insisted that working within the FTAA would help to reach more substantial agreements than those reached in the WTO to date. Regardless of the outcome of these discussions, several emphasized the need to define dispute settlement mechanisms to settle disputes on the issue of subsidies in the Hemisphere.

Among FTAA supporters, there is general consensus on the benefits of trade on development and job creation in the agricultural sector. For this reason they support the comprehensive liberalization of the sector, with full market access and the elimination of non-tariff barriers. They defend broad-based negotiations with a universal scope and few exceptions. In terms of tariffs and sanitary and phytosanitary measures, they support an FTAA that is more aggressive than the WTO, but that also ensures that the transition to free trade is adequate.

In regard to the process of exchanging market access offers, participants expressed their views on two issues:

- The need to define the tariff elimination period for the D basket, which currently provides for tariff elimination over a period of greater than 10 years. Some participants proposed that the period for tariff elimination for the products in basket D be 12 years.

- Some also noted the need to reduce scaled tariffs in some countries.

Furthermore, the participants expressed their concern regarding the process for consultations with U.S. Congress on sensitive agricultural products as derived from the Trade Promotion Authority Act.

Many participants indicated that the Chapter on Agriculture does not sufficiently consider special and differential treatment for developing countries. Some expressed concern that the Chapter does not provide for any particular treatment for the family farm, nor does it limit the power of agricultural transnationals or prohibit the dumping practices that occur through the granting of subsidies.

The Brazilian delegation emphasized the comprehensive nature of the negotiations and noted that if sensitive agricultural issues are not negotiated in the FTAA, nor should issues such as services, intellectual property, or investment be negotiated.

Some who oppose the FTAA made the following statements on the subject of agriculture:

- The FTAA is an attack on food sovereignty, which is viewed as essential for the poorest sectors of the population. Free trade agreements do not contain mechanisms to guarantee that countries preserve their food sovereignty.

- The FTAA will destroy the family farm and adversely affect rural workers.

- Competition as promoted by the free market will only cause a trade war between the poor countries, which will be forced to cut the salaries of rural workers even more in order to compete in a market that is already flooded with surpluses.

- The FTAA means that smaller countries will give up control of their domestic markets to the large producers.

- Free trade agreements in agriculture do not guarantee equitable access to the markets of developed countries.

- The FTAA makes no provisions for protecting traditional knowledge or for defending cultural and ethnic values or biodiversity.

Prior to the close of the issue meeting, it was announced that a second issue meeting focusing on the issue of services would be held on 23 September in Santiago, Chile.

Finally, the Committee Chair closed the event, thanking the civil society organizations for participating. The Chair described the feeling of dissatisfaction with the current state of affairs in the hemisphere with regard to development, and stated that the FTAA should help to better that situation and spread the benefits of expanded trade. The Chair emphasized that the Committee would channel the contributions received throughout the event, while recognizing the need to strengthen the mechanisms established to date to promote increased and improved participation.