PROSPECTS BRIGHT FOR NEW ANDEAN TRADE DEAL WITH U.S.

NEW YORK -- Prospects for renewal of a preferential trade pact allowing
goods from several Andean nations better access to the U.S. are rapidly
improving.

Although the administration of George W. Bush has consistently made clear
that it wants renewal of the Andean Trade Preferences Act, which expires
Dec. 4, and key legislators from the both sides of the aisle had expressed
their support for it, doubts about its future were numerous until Sept. 11.

Before the terrorist strikes in the U.S., there was little appetite to push
trade deals while the U.S. economy was sputtering and unemployment was
rising. But since the attacks, the surge in bipartisanship at the Capitol
and the Bush administration's efforts to build coalitions and deepen ties
with friendly nations bode well for the ATPA, as the accord is known.

This week, U.S. Trade Representative Robert Zoellick renewed the
administration's call for fast-track trade powers. "Trade Promotion
Authority" would allow the administration to negotiate trade deals that
would be subject only to yes-or-no votes by Congress.

But renewal of the ATPA may not need Bush's securing fast-track power, as
the Senate's approval Monday of a free-trade agreement with Jordan
demonstrates.

Earlier this year, Senator Bob Graham, D-FL, submitted a bill for the
renewal of the ATPA, though since then not much action on it was taken. No
bill has yet been introduced in the House, said Rep. Bas Callenger, R-NC,
but he noted that House Speaker Dennis Hastert, R-IL, supports it as well.

Another supporter, Representative Gregory Meeks, D-NY, noted the ATPA is
part of a broader Andean initiative to fight illicit drug production and
trafficking.

The U.S. has already committed $1.3 billion in mostly military aid to
Colombia to help the country eradicate drug crops in its territory. The
crops are a primary source of revenue for insurgent guerilla groups.

At the same time, the Bush administration has allotted about $800 million
to Colombia's neighbors to help them handle any spillover from Colombia's
internal conflict.

Venezuela Want In, But Questions Remain Brian Walsh, a spokesman for
Representative Benjamin Gilman, R-NY., said his boss believes the ATPA is a
"logical extension" of the other two initiatives.

"Drugs create thousands of jobs," Walsh said. The congressman, he added,
believes that "we need to counter those with legitimate jobs and help them
(Andean nations) build stable, democratic market economies."

In addition to Colombia, Ecuador, Peru and Bolivia are current
beneficiaries of the ATPA. The other Andean nation, Venezuela, is not
because it wasn't in the past either a source or transit point for illicit
drugs.

Over the last couple years, however, Venezuela has indeed become a transit
point, and reports of drug production near its long western border with
Colombia have become increasingly numerous.

Venezuelan officials have said they want the country to be included in the
ATPA, but the U.S. has been reticent to extend what would amount to a
political gift to President Hugo Chavez. Although Venezuela is a top
exporter of crude to the U.S., its non-oil exports to the northern giant
are minimal.

The problem, according to one Bush administration official, is Chavez's
choice of friends. The Venezuelan president has literally embraced in
official state visits Iraq's Saddam Hussein, Libya's Muammar Gaddafi and
repeatedly praised the fruits of Fidel Castro's revolution in Cuba.

Venezuela has also denied the U.S. access to its airspace for anti-drug
surveillance flights.

On the other hand, Chavez condemned the Sept. 11 strikes against the U.S.
and pledged to "share intelligence" in Washington's fight against
terrorism. Venezuelan banking authorities, at the behest of the U.S., are
investigating 11 bank accounts of foreigners suspected to have ties with
terrorist organizations. Chavez has also assured the U.S. that Venezuela
will continue to supply it with oil.

Thus, as it did bilaterally with Jordan, the U.S. might possibly reward
Venezuela's cooperation and include the country in a renewed ATPA.

Economically, More Important To Andes Than To U.S. One other factor
favoring the extension of the ATPA until 2005, when the Free Trade Area of
the Americas should take effect, is the relatively little impact it would
have on the U.S. economy, the Bush administration official said.

"The ATPA can run under everybody's radar screen," he said. That wasn't the
case with the Caribbean Basin Initiative, which was passed last year and
"was worth hundreds of millions of dollars," he said.

To give an economic boost to most Caribbean nations, the U.S. overcame
internal opposition and extended them roughly the same degree of market
access that Mexico enjoys under the North American Free Trade Agreement.

Now, Andean nations want equal trade benefits, the official said, noting
that the Andean nations' exports aren't numerous enough to threaten many
U.S. jobs anyway.

He added that textile and apparel exports might be among the few, if
significant, exceptions, and could be handled in the same way that they
were with Caribbean nations: U.S. fabric is used in garment assembly lines
in member states and then exported back to the U.S.

While the stakes might not be terribly high for the U.S., they're important
to Andean nations, said Victor Rico, director general of the Andean
Community of Nations.

Over the last decade, the ATPA has generated $1.2 billion in additional
trade and 112,000 in new jobs for the four Andean countries.

Currently, about 6,000 products are covered under the ATPA, Rico said. But
the Andean countries want not just textiles but also leather products and
tuna from Ecuador included. While possible, extending duty-free access to
these products may be a bit difficult, Rep. Ballenger said.