HSA Team

February 4, 2004
Puebla, Mexico

Chances improve for an Extra Light FTAA

The Extra Light FTAA has better chances of succeeding not
only because the governments of the major blocs are pushing
to finish the agreement by the original timeline, but also
because they seem ready to pay the price for the
recognition that the original FTAA vision is dead and that
the FTAA has been reduced to a purely commercial agreement.
This tendency is reflected in Brazil´s ability to resist
strong pressure from its own business interests, such as
the agribusiness sector, which has declared that an FTAA
with these characteristics is a dead deal. In the U.S.,
big business interests still haven´t be able to change the
new direction of the negotiations agreed to Miami, which
they continue to oppose. In this context, the blocs will
make every effort to reach consensus on Tier 1 in Puebla,
and will begin to discuss what Tier 2 will look like, but
without entering into details on the second Tier. The
differences in evidence again today are simply
irresolvable, but every effort is being made to ignore them
in order to sign off on a minimal agreement. Countries
that are anxious to sign off on something see the Extra
Light FTAA as the only viable route.

Today there really weren't any substantial changes to the
official agenda. The official meeting began with the co-
presidents providing a summary of yesterday's discussion on
common rights and obligations (Tier 1), which covered the
issues of market access, agriculture, services and
investment. Afterwards, the Brazilian delegation requested
that at a very minimum, there should be a closed-circuit
transmission of the meetings to all delegation members,
contesting yesterday's decision that country delegations be
restricted to the Chief of the delegation + 4 delegates.
By the end of the discussion, the plenary sessions were
opened to all delegates, including the civil society
representatives.

The remaining Tier 1 issues (government procurement,
competition policy, intellectual property, subsidies and
antidumping, dispute settlement, and institutional issues)
were presented today. In addition, there were brief
discussions on the documents presented by Mercosur and the
G10 (Canada, US, Mexico, Guatemala, Honduras, El Salvador,
Costa Rica, Nicaragua, the Dominican Republic, and Chile)
regarding procedures for negotiating Tier 2. After the
presentations, the co-presidents suggested a system of
direct consultations regarding Tier 1 between them and
representatives of each proposal (Mercosur, G14, Caricom,
Bolivia, and Venezuela). These self-proclaimed
"confessional" sessions are an attempt to try to reach
consensus and produce a final text. This will last through
tomorrow and probably all day, with the final goal of
producing a consensus text.

Civil Society

Mercosur representatives and civil society members of the
delegations discussed Chile´s proposal on ¨Mechanisms on
Civil Society Consultation.¨ Last year, Chile presented a
proposal to create a permanent civil society committee made
up of four representatives, one from big business, one from
small business, one from labor and one representative from
NGOs and academia. Mercosur admitted that they do not have
a proposal on civil society, but, at the same time, they
suspect that the Chilean proposal is a simulacrum and that
it would be better to use the types of consultative
mechanism that Mercosur uses. The discussion was left open
and will be taken up again in the future.

Small Scale Agriculture

One of today´s new items was the Mercosur´s idea (initiated
by Brazil) of making a proposal on small-scale and family
agriculture to the negotiating group on agriculture. They
propose special and differential for developing countries
to allow for adequate policies regarding small-scale
farming, including indigenous, campesino and family farms,
aiming for food security. Mercosur discussed a short text
on the issue with the Bolivian, Peruvian, and Venezuelan
delegations. Mercosur will most likely present the same
text to the TNC tomorrow for more discussion.

The Second Tier

Today ten countries (the G14 countries minus Colombia,
Ecuador, Panama and Peru – or "G10") introduced a proposal
on the second Tier that was identical to the original G5´s
draft proposal on the issue, which was floated before the
TNC meeting began. It is not yet known why these four
countries refused to support this Tier 2 proposal.

Both Mercosur and the G10 presented their proposals to the
TNC today. The presentations were short and simple, with
few questions and little discussion. Nevertheless, several
important differences were evident in the two proposals:

- The G10 proposal appears to envision one set of
plurilateral negotiations among those countries
interested in joining, while the Mercosur proposal
envisions the possibility of more than one plurilateral
negotiation, each containing different groups of
countries.

- Mercosur proposes that the transparency and civil society
participation rules of the existing FTAA negotiating
groups apply automatically to any plurilateral
negotiations, and that documents from the negotiations be
available to all FTAA countries. The G10 proposal is
silent on this issue.

- Both Mercosur and the G10 would allow any FTAA country to
observe the plurilateral negotiations. But, while
Mercosur would allow observers to intervene if the
plurilateral negotiations threatened to prejudice their
rights, the G10 would allow no interventions from
observers.

- Both proposals would allow observers to join the
plurilateral negotiations at any time. The G10 specifies
that these observers would have to accept whatever
modalities and texts were already agreed upon by the
negotiating group, while Mercosur is silent on this
issue.

- Mercosur calls for plurilateral negotiations to have the
same deadline as the overall FTAA negotiations. The G10
does not specifically address this issue, but proposes
that the presidents of the overall FTAA negotiating
process ensure, upon request, that there is enough time
to complete plurilateral negotiations.

Intellectual Property Rights (IPR)

On this issue, implementation of the TRIPs agreement is the
only point upon which all five proposals agree. This is
the only point on IPR included in the G14 proposal, while
there are additional points on intellectual property in
each of the other proposals. In particular, the proposals
of Mercosur, Venezuela and Bolivia contain explicit
references to the Doha agreements on public health. The
Mercosur and Venezuela proposals propose the establishment
of hemispheric rules on technology transfer. And, as we
mentioned yesterday, Venezuela joined Bolivia in explicitly
mentioning the need to guarantee protection for collective
intellectual property, traditional knowledge, folklore and
access to genetic resources. Ecuador and Peru supported
these positions verbally, even though they both signed onto
the G14 proposal that ignores these issues. Finally,
Venezuela proposed creating a balance between the social
function of intellectual property and human rights with
individual intellectual property rights. Venezuela also
proposed guarantees for diffusion and collective access to
the fruits of scientific progress.

During today´s session, there were contacts among Mercosur,
Bolivia and Venezuela in an attempt to develop a joint
proposal on IPR, but this is still a work in progress.
Also, during the plenary, the U.S. made its position on
TRIPs clear, pointing out that, in its point of view, the
technological change and scientific advances had left the
TRIPs agreement behind, and that deeper "post-TRIPs" rules
were necessary. In a word, patents and copyrights for
everything.