November 5, 2005

Americas leaders fail to end free-trade stalemate

By Mary Milliken and Kevin Gray

MAR DEL PLATA, Argentina (Reuters) - Leaders from around
the Americas failed on Saturday to resolve key differences over
how to create a hemisphere-wide free trade zone during a
regional summit overshadowed by violent anti-U.S. protests.

Talks on creating the U.S.-proposed Free Trade Area of the
Americas, or FTAA, have been stalled and the Bush
administration had hoped to jump-start discussions here to
establish the world's most populous free-trade bloc.

But Chilean President Ricardo Lagos said differing views
over how to proceed persisted at the two-day summit in this
Argentine seaside resort. Officials were still working on a
final declaration and talks extended hours after a deadline.

"The point of contention is if the conditions are there for
us to negotiate. A great majority said 'Yes' but others said
'Let's wait"' until an upcoming World Trade Organization (WTO)
meeting, he said.

The United States and Mexico had been hoping to set an
April date to move the trade talks forward, a move opposed by
Argentina, Brazil, Paraguay and Uruguay.

Venezuelan President Hugo Chavez, Washington's most
aggressive antagonist in the region for his self-styled
socialist revolution, arrived at the fourth Summit of the
Americas vowing to "bury" efforts to move FTAA forward and
rallied 25,000 anti-free trade protesters on Friday.

Hours later, a separate anti-U.S. demonstration turned
violent blocks from where Bush and the 33 other leaders were

Some 200 protesters battled riot police for more than two
hours during the protest before torching a bank branch and
shattering store windows along a major boulevard in this
Argentine beach resort. Officials said 64 people were arrested
but no major injuries were reported.


U.S. National Security Advisor Stephen Hadley later told
reporters aboard Air Force One, traveling with Bush en route to
Brazil, that although no accord was reached, progress was still
made in the bid to create a free-trade zone stretching from
Alaska to Argentina.

"It's not deadlocked," Hadley said. "We went from a summit
that was supposed to bury FTAA to a summit in which all 34
countries actually talked in terms of exchanged trade and the

Hadley added: "There is nothing in stone that says any time
leaders get together, they have to have a communique."

He said Bush listened as well as expressed the U.S. view.

"His approach is to not to try and dominate but to
participate as one of equals and listen, and that's what he
did," Hadley said. "At critical times he made his views
obviously clear."

Bush and Chavez did not interact at the meetings. "Their
paths did not cross," Hadley said.

Although not outrightly opposed to FTAA like Chavez,
leaders from Latin America's big agricultural economies Brazil
and Argentina have also voiced concern over any free trade
deal, complaining about U.S. farm subsidies.

"Free trade is very important if we respect equality among
nations," Brazilian President Luiz Inacio Lula da Silva told
reporters. He added that it was "not opportune" to discuss FTAA
before a crucial WTO meeting next month in Hong Kong where
subsidies would be a key issue.

Bush's stop in Brazil is the second part of a Latin
American trip that will also include a stop in Panama.

Ahead of his arrival, police in Sao Paulo fired tear gas
and used batons to disperse a crowd of about 1,000 people
protesting in the city center against Bush's visit.

The march began peacefully with protesters shouting "Go
home Bush!" as they streamed along Avenida Paulista, the main
business district boulevard, between two U.S. bank branches.
Police responded after some protesters began throwing rocks.

In comments to reporters in Mar del Plata, Lagos suggested
that talks between regional leaders had at times been tense.

"Something happened here that rarely happened in other
meetings: the call to speak out loud was taken up by everyone,"
Lagos said. "At times, we all talked out loud, perhaps too
loud, but it made the meeting that more interesting.

(Additional reporting by Paulina Modiano, Steve Holland,
Tabassum Zakaria, Guido Nejamkis and Cesar Illiano in Mar del