Time to Strike a Deal?(Brazilian orange tariff)(Brief Article)(Statistical Data Included)

Brazilian orange growers have a complaint. Six of every 10 glasses of orange juice served worldwide can be traced back to their groves. That's a pretty gaudy statistic, but the Brazilians say the figure would be even higher--and the juice much cheaper--if they had more open access to American breakfast tables. The U.S. government levies a $418 tariff on every ton of Brazilian orange-juice concentrate that enters the country. In addition, all foreign shipments bound for Florida carry an additional tax to help shield that vote-rich state's 90,000 orange growers from over-seas competitors. The gap between principle and practice in the supposed cradle of free trade irks Brazilian President Fernando Henrique Cardoso. "So far, the signals coming from the most important governments in the north have... been signals of restriction," he said at a recent summit of South American presidents in Ecuador.

Ten years ago the United States, Canada and Mexico signed the North American Free Trade Agreement (NAFTA), and business among the partners has been booming ever since. NAFTA seemed a model for the free-trade future--so much so that barely a year after its approval by the U.S. Congress, the Clinton administration tried to grab a bigger prize. In 1994 Washington and Latin American leaders formally endorsed the creation of a Free Trade Area of the Americas (FTAA). It offered the same promise as NAFTA--but on a much larger regional scale. South American economies would benefit from a surge of exports to the United States, and U.S. companies would sell more goods, and invest more money, in a long-suffering region.

But unlike NAFTA, the FTAA has been a victim of prolonged benign neglect. For years U.S. officials have placed new free-trade agreements on hold pending final approval by Congress of the Trade Promotion Authority (TPA) bill--also known as fast-track legislation--which gives the White House a green light to conclude trade accords with foreign countries without fear that Congress will tinker with the final terms. Last month the TPA finally passed, and the Bush administration renewed Bill Clinton's original promise to deliver the long-stalled hemispheric deal by 2005. But there is a huge gap between bold talk and an actual trade deal, especially one covering 34 countries. Many thorny issues must be resolved first. The United States may not want to lower its import duties to the extent that some Latin American countries are seeking. And Latin America is not terribly eager to open its government-procurement and services sectors to U.S. competitors.

Still, the United States aims to press ahead. According to administration officials, America's first priority will be to nail down bilateral agreements with Chile and Singapore. At the same time the Bushies say they will try to jump-start negotiations toward the FTAA, though success on the bilateral front won't necessarily promote a regional trade-bloc treaty.

Or will they? On paper at least, the FTAA sounds like a win-win proposition. It would bring together 850 million consumers in the world's largest trading bloc, with annual economic output of about $13 trillion. But domestic ...