Below is a Wall Street Journal report on the recent
summit, where Chavez dramatically appeared, and FTAA was
stopped in its tracks.
We don't learn anything new here. Other reports have been
far better. But I am intrigued by their spin.
On the one hand, they acknowledge the failures of the
'Washington Consensus'...
The rise of Mr. Chavez, and of other more moderate leftist
leaders in Latin America, reflects the disappointing
results of the so-called Washington Consensus, a set of
market-oriented policies like trade liberalization and
privatization that the region and parts of Asia embraced
during the 1990s. The disillusionment with free-market
growth formulas also has spread to other parts of the
developing world, such as Africa.
...while at the same time, they continue to report free
trade talks as an essential program that should go
forward, and they interpret objections as negotiating
positions...
The failure of the Western Hemispheric summit could make
it more difficult for the U.S. to gather support for the
Doha Round, and could embolden other countries to make
more demands in those talks.
Do they just not 'get it', that some leaders have 'had it'
with free trade? Are they trying to confuse us,
identifying the phrase 'Washington Consensus' with 'old
failed policies', and inviting us to believe that upcoming
free-trade talks represent something different? (They
don't.)
The fact is that Chavez has become the symbolic leader of
a very effective anti-globalization movement: he's an
anti-globalization activist, and one with a bit of clout.
I don't think the WSJ folks want to see it that way, or
are perhaps unable to see it that way. They emphasize his
conference tactics, which they characterize as playing a
'spoiler role', and 'playing good cop bad cop'. They don't
consider at all the issue of whether Chavez should be
listened to, or whether the free-trade agenda might
deserve reconsideration.
But what can we expect: if there is a public voice of the
banking elite, it is surely the WSJ.
rkm
--------------------------------------------------------
http://online.wsj.com/article_print/SB113133375437389789.html
Failed Summit Casts Shadow On Global Trade Talks
In Blow to U.S., Chavez Taps Latin America's Discontent To
Fight Opening of Markets
By MATT MOFFETT and JOHN D. MCKINNON
Staff Reporters of THE WALL STREET JOURNAL
November 7, 2005; Page A1
MAR DEL PLATA, Argentina -- A failed summit of leaders of
the Western Hemisphere dealt a blow to global trade
liberalization and strengthened the influence of
Venezuelan President Hugo Chavez, a critic of the U.S. who
favors protectionism and old-style socialism.
The Bush administration had hoped to use the meeting of 34
heads of state to breathe new life into negotiations on a
long-stalled Free Trade Area of the Americas, a free-trade
zone reaching from Alaska to Tierra del Fuego, Argentina.
Instead, the meeting was so wracked by division that
diplomats drafting the final communiqué failed to reach
agreement even on when to resume talks on the free-trade
zone.
In handing Washington an embarrassing defeat, Venezuela
was joined by the four countries of the Mercosur trading
bloc, a customs union led by Brazil and Argentina and also
including Paraguay and Uruguay. "We were five musketeers,
kneeling, sword in hand," to oppose the FTAA, Mr. Chavez
said afterward. He condemned the U.S. free-trade model as
a "perversion" that would unduly benefit the U.S., and
instead pushed for closer trade ties among Latin American
nations.
Mr. Chavez's success at playing the spoiler role here
reflects a harsh fact for the Bush administration:
Washington can no longer have its way in setting the
economic agenda in its own backyard or in a large part of
the developing world. The rise of Mr. Chavez, and of other
more moderate leftist leaders in Latin America, reflects
the disappointing results of the so-called Washington
Consensus, a set of market-oriented policies like trade
liberalization and privatization that the region and parts
of Asia embraced during the 1990s. The disillusionment
with free-market growth formulas also has spread to other
parts of the developing world, such as Africa.
That will complicate efforts next month in Hong Kong to
carve out a world trade deal. Mr. Chavez has become a
beacon for those skeptical of the idea that free trade
improves the lives of ordinary people, analysts said.
"Chavez tapped into a discontent that has been brewing for
some time," said Charlene Barshefsky, who was U.S. trade
representative under former President Clinton. "What he
ignited was a combustible situation that was already
smoldering."
President Bush responded only indirectly to the Venezuelan
leader. In a speech yesterday in Brazil, that didn't
mention Mr. Chavez by name, he warned that the
consequences of following his lead could be disastrous. "A
country that divides into factions and dwells on old
grievances cannot move forward, and risks sliding back
into tyranny," Mr. Bush said.
While public attention focused on the voluble Mr. Chavez,
he also appeared to be engaged in an elaborate game of
good cop/bad cop with the more-moderate president of
Brazil, Luís Inácio Lula da Silva, leader of South
America's largest economy. By joining forces with Mr.
Chavez in Mar del Plata, Brazil may be trying to buy more
time to win concessions from the U.S. and European Union
on agricultural subsidies in the global trade talks.
Those concessions, in turn, could leave Brazil and other
emerging powers in the region in a stronger position, if
they decide to turn again to negotiating a hemisphere-wide
free trade zone. Mr. da Silva rejected the idea of setting
a 2006 date for resuming the FTAA negotiations because he
wanted to keep pressure on the U.S. to make concessions in
global trade talks, informally called the Doha Round.
The global negotiations are being held under the auspices
of the World Trade Organization, and have stalled over a
number of contentious issues. Developing nations, seeking
to boost their exports, want the U.S. and EU to slash
agricultural subsidies. Wealthy nations want poorer ones
to slash tariffs, open their service industries to foreign
competition and strengthen intellectual-property
protection. The poor nations blocked the last major round
of talks in Cancún, Mexico, two years ago, because of
concern that agricultural subsidies weren't being
addressed sufficiently.
The failure of the Western Hemispheric summit could make
it more difficult for the U.S. to gather support for the
Doha Round, and could embolden other countries to make
more demands in those talks.
U.S. officials sought to play down Mr. Chavez's role and
importance in the closed-door summit negotiations,
suggesting that his public calls to "bury" FTAA were
quickly ignored by other leaders. Instead, what evolved
during the negotiations were two distinct, but
not-so-different, approaches, they said: a plan backed by
the U.S. and 28 other member states that would restart the
talks next year, despite objections; and a second plan
backed by Mercosur and joined by Venezuela that recognized
the benefits of trade, but said the time wasn't yet right
for FTAA.
American officials suggested that by joining the Mercosur
proposal, Mr. Chavez effectively had to drop his demands
for killing FTAA, although Mr. Chavez continues to deride
the trade pact. Among other things, FTAA could give Latin
American farmers better access to U.S. markets and give
U.S. manufacturers increased access and better
intellectual-property protection in fast-growing markets
like Brazil.
"We went from a summit which was supposed to bury FTAA to
a summit in which all 34 countries actually talk in terms
of enhanced trade and an FTAA, recognizing there are
challenges," said Stephen Hadley, Mr. Bush's national
security adviser, in a briefing late Saturday with
reporters aboard Air Force One. "And the only difference
is, do we start working now on the challenges in order to
reach an agreement, which is the position of the 29, or
the position of the five that, 'Oh, this is too hard right
now.' That's not a big difference. I would say that is
some real progress."
But the underlying strength of Mr. Chavez's political
position appeared to be reflected in the fact that many of
the countries that nominally supported the U.S. position
insisted that the views of Venezuela and Mercosur be
accommodated in the final language. That appeared to be a
direct rejection of Mr. Bush's position.
"The man left beat-up," Mr. Chavez, a former paratrooper,
said of Mr. Bush. "Didn't you see it?"
On Friday, the first day of the summit, Mr. Chavez had
given the keynote address at a peaceful rally condemning
FTAA and President Bush's policy in Iraq. Later that
evening, protests against the trade pact turned violent,
with groups of demonstrators vandalizing businesses in
downtown Mar del Plata.
The summit confirms the Venezuelan as heir apparent to
Fidel Castro as Washington's prime nemesis in its home
hemisphere. Mr. Chavez favors heavy state involvement in
the economy, and many Venezuelans fear he intends to
impose a Cuban-style economic model. He has sharply
increased government control over his country's
all-important oil industry, forcing foreign oil companies
to accept a majority government role in their local
ventures. He also has seized what his government considers
"idle" farmland from large rural estates and given workers
in some factories an ownership stake and management voice.
At a time when Mr. Chavez has been using Venezuela's
immense oil earnings to support political allies
throughout Latin America, the aftermath of Mar del Plata
could give him more credibility to export his leftist
ideology. Moreover, a Chavez ally, Bolivian indigenous
leader Evo Morales, who appeared alongside the Venezuelan
during his anti-FTAA address, stands a good chance of
being elected president of Bolivia.
For moderate leftist leaders in Latin America, such as
Brazil's Mr. da Silva, Mr. Chavez's extreme positions can
serve to make their own differences with Washington appear
less significant. Nevertheless, that could be a
double-edged sword. Mr. Chavez, for instance, has
expressed support for the Brazilian landless peasant
movement, which has disrupted the country's agrarian
sector, the anchor of the Brazilian economy.
--David Luhnow and José de Córdoba contributed to this
article.
--
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