MIAMI — Canada has grudgingly shelved its opposition to a watered- down version of Free Trade Area of the Americas talks in Miami, saying it can live with fresh pledges that other countries, including Brazil, will at least keep talking about lowering barriers in all key sectors.
This new stand came as negotiators approved a draft text yesterday for a free-trade region stretching from Canada to Argentina that sets the stage for an "FTAA lite" deal that allows member countries to take a buffet-style approach to commitments, accepting some and letting them opt out of parts they don't like.
Although International Trade Minister Pierre Pettigrew said that Canada takes some comfort from wording in the draft calling for continued talks on lowering more trade barriers, he conceded that the proposals do fall far short of the type of pact that the country was looking for.
"You have to be realistic here," Mr. Pettigrew said of the talks, being held in Miami among 34 countries in the Western Hemisphere with the goal to create that freer-trade zone from Canada south to Argentina.
"We want to move [as] 34, and when you see an absolute resistance to your higher level of ambition, you register it; you may deplore it; you may think it's not the way we should be going — but we are quite satisfied that all these elements, investments and services are remaining on the table."
But although Canada swallowed its concerns about a lighter pact, Chile, one of many countries that had joined it in fighting a diluted deal, did not.
"In its current state, it will reduce the FTAA to a minimum, leaving behind any economically interesting elements for Chile and most of the other countries present," Chile's foreign affairs ministry said.
The draft hammered out yesterday contains language put forward by Brazil and Washington that concedes "countries may assume different levels of commitments" in the FTAA deal while jointly agreeing on a smaller core agreement.
It falls grievously short of the sweeping and comprehensive "NAFTA on steroids" target for all-Americas free trade envisaged in 1994 when preparatory talks began.
"The ambitious-sounding text is very broad, but also very shallow," said Ottawa trade consultant Peter Clark.
Mr. Pettigrew conceded that the commitment to open markets in the FTAA talks "could be shallow," but he said Canada is happy that countries such as Brazil have agreed to keep talking about opening all aspects of their markets — especially because Brazilian President Luiz Inacio Lula da Silva appears to be warming to the idea of lowering more barriers.
"Some time ago, he was saying the FTAA [amounted to] annexation.... So we'll see next year where we are," Mr. Pettigrew said.
"[The FTAA text] will not go as far as . . . a country like Canada will go, but you have to take it step by step and we are ready to live with that."
The move by Washington and Brasilia to a minimalist FTAA deal reflects gaping disagreements between the two economic titans of the Western Hemisphere over how far negotiations should go in dismantling trade barriers.
"I think it's definitely a disappointment, a huge disappointment for Canada to have . . . the lowest [common] denominator [approach]: a very thin deal," said Annette Hester, director of the University of Calgary's Latin American Research Centre.
Yesterday, Brazilian Foreign Secretary Celso Amorim defended the "pick and choose" approach that allows countries to skirt making the same market obligations as others, pointing out that it was the United States that started down this road by choosing not to discuss cutting heavy domestic farm subsidies or curbing anti-dumping measures at the talks. "Bear in mind who started this pick-and-choose process."
He said the two-track approach allows flexibility for countries to protect sensitive areas.
"It doesn't impose a one-size suit on all countries."
He said Canada can't complain about Brazil trying to protect "sensitivities" in its economy when Ottawa places fences around areas such as culture, education and health care.
Among the new changes in the draft text, which will be officially released Nov. 21 after the trade ministers finish talking, is this statement:
"The negotiations on the common set of rights and obligations will include provisions in each of the following negotiating areas: market access; agriculture; services; investment; government procurement; intellectual property; competition policy; subsidies; antidumping and countervailing duties; and dispute settlement."
This sentence commits countries to nothing except talking about these subjects.