The cozying up between the E.U. and Mercosur isn’t designed to bypass the world’s largest economy as much as to increase the leverage of both in future trade negotiations with Washington. One aspect of the summit that’s certain to get up Washington’s nose is the presence of Fidel Castro, who met Sunday night with E.U. president Chancellor Gerhard Schroeder. Cuba, which has trade relations with most E.U. and Latin American countries, has urged the summit to adopt a condemnation of Washington’s Helms-Burton Act, which punishes foreign companies doing business with Havana. Whether or not the delegates explicitly chastise the U.S., Castro’s very presence at the summit communicates an important message: On trade matters, the E.U. and its Latin American allies don’t answer to Washington.
Cheeky Europeans! First they declare war on U.S. bananas and beef; then they pitch their trade tent in Washington’s backyard -– and invite Fidel Castro in. The leaders of 15 European Union countries joined 33 Latin American and Caribbean heads of state in Rio de Janeiro Monday for talks aimed at launching a free-trade zone. And even though there are enough unresolved differences between the European Union and the trillion-dollar Mercosur trading bloc (Brazil, Argentina, Uruguay and Paraguay) to guarantee that the creation of such a zone won't be imminent, the message to Washington is ominous. President Clinton had envisaged expanding NAFTA (Canada, the United States and Mexico) into a hemisphere-wide free trade agreement built around the U.S., but Congress pulled the rug out from under him by denying him the right to negotiate "fast-track" trade agreements. Without the executive override offered by "fast track," the myriad special interests operating on Capitol Hill would make it almost impossible for Congress to pass a comprehensive free trade agreement. That’s left countries such as Chile -– now an associate member of Mercosur -– hanging, despite having been promised NAFTA membership in 1994.