The Miami Herald
Jun. 07, 2003

'Milestone' in Miami: U.S., Chile sign free-trade pact


  The United States and Chile on Friday signed the Bush administration's first free-trade agreement in the region, an accord that may prove to be a litmus test for a future hemispheric trade pact.

  In a signing ceremony in Miami, Chilean Foreign Minister Soledad Alvear and U.S. Trade Representative Robert Zoellick heralded the advances over past accords, such as new rules for electronic commerce. The ceremony was a prelude to 34 trade ministers gathering in Miami on Nov. 21 to discuss negotiations for a Free Trade Area of the Americas.

  ''Today is a milestone, but our work is not finished,'' Zoellick said.

  ''We have to work to gain approval of Congress,'' he said, calling the bilateral trade accord with Chile "the first of what I hope will be a series of agreements.''

  Both the Chilean and U.S. congresses must ratify the treaty, which -- along with a Singapore accord that Bush signed last month in Washington -- marks his
  administration's first foray into full-fledged trade pacts.

  Progress in trade negotiations in the hemisphere is music to the ears of the Miami trade community. Bilateral trade talks are under way with Central America, and more possibilities are being held out for Colombia, Panama, the Dominican Republic and even Brazil with its neighbors.

  All those talks signal progress towards the ultimate goal of a Free Trade Area of the Americas, encompassing the entire hemisphere. Miami business leaders hope the
  secretariat, or headquarters, of the FTAA will be located in Miami, bringing more jobs and trade to South Florida.


  Washington's choice of Miami for the signing ceremony appeared to be a nod to the city's bid for the secretariat site, and Zoellick saluted Miami's interest in trade.

  But the Office of the U.S. Trade Representative stopped short of any official endorsement of Miami's aspirations.

  Although President Bush decided against meeting face-to-face with Chilean President Ricardo Lagos to put his signature on what both sides were calling a historic
  agreement, the president's brother, Florida Gov. Jeb Bush, headed the roster of Chilean and U.S. trade officials and state and local politicians. Chile did not support the
  Bush administration's Iraq policy.


  Pro-trade business lobbyists from Washington, Miami business leaders and members of the Chilean business community in South Florida rounded out those attending the morning ceremony, which took place in the courtyard of the Vizcaya Museum, Miami's renowned example of Italian Renaissance architecture.

  Business leaders were clearly relishing the trade agreement, which Zoellick's office called "cutting edge.''

  Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers, said the agreement will make a difference on trade because so many tariffs disappear right away.

  The schedule of tariff reductions runs to 500 pages, but U.S. officials said most tariffs on U.S. manufactured products will drop from 6 percent to zero when the agreement takes effect.

  Many agricultural tariffs will be eliminated in four years. All tariffs will be eliminated in 12 years.

  Chile's trade impact is minimal compared to overall U.S. imports and exports or even its trade with Canada and Mexico. Total U.S. trade with Chile of $6.3 billion in 2001 was a fraction of some $1.8 trillion in total trade.


  ''This is really a very high-quality agreement,'' said Vargo, who had an added interest in the success since his wife Regina Vargo, assistant U.S. trade representative for the Americas, headed the negotiations with Chile.

  Missing from the ceremony were any representatives of labor or environmental groups, which signaled their displeasure with the results in several statements.


  ''It's very weak on worker's rights, it's problematic on investment, it's bad on temporary entry [of workers]; we're concerned about the capital controls,'' said Thea Lee,
  assistant director for international economics at the AFL-CIO.

  For Chile, the new trade and investment agreement has been seen as a desired but frustrated policy goal for more than eight years.

  ''These results show us that when we and other countries work toward an objective there is no goal that can't be achieved,'' Alvear said.