HSA Team in Puebla February 5, 2004 Puebla - México With only one day left in the TNC according to the original calendar, the meeting is just as stalled as it was yesterday. In addition, today the failure of the ¨confessional¨ method (the system of meetings between the co-presidents and each of the five countries or group of countries that made written proposals) was revealed when the TNC adopted a new negotiating method. During the first part of the day, as was planned, the co- presidents met with Bolivia and then Venezuela, completing the cycle of ¨confessionals¨ begun yesterday. But there were no advances, because in each of the meetings participants basically just reiterated the positions they had presented in their written proposals. Reports from the official so-called ¨Civil Society Forum¨ were also received in this first part of today's meeting. The report contained a mixture of praise and criticism of the FTAA. With the failure of the ¨confessional¨ method, the co- presidents pulled another rabbit out of their hat, implementing a new negotiating modality. They divided the negotiators into two groups: the first made up of the delegation chiefs plus one additional member of each delegation and the co-presidents, and the second made up of the remaining delegation members, in a kind of plenary ¨light¨ with little decision-making power. In the first group - the real one - they discussed the issues that are most clearly blocking any possible common definition of Tier 1, but with little result: - They discussed market access, and, in particular, what universe of goods would be subject to tariff elimination. The U.S. reiterated that the goal should be the elimination of substantially all tariffs (which, according to Chile's interpretation, means at least 90% of the tariff universe), and Mercosur maintained its position that the goal should be 100% of tariffs. But Mercosur showed some openness to the possibility that this percentage could be reduced. - Subsidies were also discussed under the market access theme, as was the character of safeguards (on the one hand, if they should apply in general or only to agriculture, and, on the other hand, whether safeguards should take the special and differential treatment principle into account), and the breadth of Most Favored Nation treatment (whether it should apply only to market access for goods or also to the other negotiating topics). Disagreements remained on each of these issues, without any movement. - There was also no resolution of the existing differences in agriculture, in which both direct and indirect US subsidies to big producers and exporters continues to be an important stumbling block of the FTAA. In the "Light Plenary," there were additional disagreements and no inability to make decisions about anything. This was evidenced by the common refrain "I have to consult." The main discussion point was the Venezuelan document presented in Miami, in which there are considerations and proposals regarding agriculture, intellectual property and Special and Differential Treatment. Most of the meeting was spent discussing Special and Differential Treatment, specifically the Venezuelan proposal to create a "Structural Convergence Fund" (which goes far beyond the Hemispheric Cooperation Program). The proposal was supported by Mercosur, Bolivia and Caricom, and was severely criticized by the US negotiators who stated that the word "Fund" was not in their vocabulary, going to the extreme of pontificating on various studies demonstrating the "failure of European Structural Funds." Another theme that was discussed in the "Light Plenary" was transparency. Some countries proposed that the Trade Ministerial meetings and the TNC meetings be transmitted through radio and television. This proposal was rapidly rejected by Canada, US, Mexico and Chile. Their reasoning was that this would hinder negotiations and that the transparency mechanisms they already have are sufficient. They also added that there would be no public interest in these types of discussions. In addition, the proposal that all negotiation groups' proposals and reports be made public was not agreed to, but the US stated that it will respond tomorrow on whether or not it can accept the proposal. To conclude, the latest rabbit pulled out of the co- presidents' hat also failed to function properly. But the deadline to finish talks is tomorrow at 1:00 p.m. (though there are some rumblings that negotiations might go into the night), which means that there is little time to pull more rabbits out of the hat, which are increasingly paltry anyway.