From WolfWikis

Contents 1 Potential for Trade in the 1990s 1.1 The 1994 Summit of the Americas in Miami 1.2 The Negotiations - Later Summits and Issues 2 Leaving the 1990s 2.1 Evolution of the Bush Administration 2.2 Resistance 3 Current State of Negotiations 3.1 Policy Recommendations 4 External Links 5 References

Potential for Trade in the 1990s

Relations between the United States and the rest of the world through the end of the Cold War were marked unarguably by the promotion of democracy and US national security above all else. With the end of the Cold War, the 1990s brought a new opportunity for other factors to become significant if not central to international relations and, with the suffering economies of most Latin American countries during the few decades prior, talk of trade negotiations and economic integration emerged as a major factor in the affairs of the Western Hemisphere ^[1].

The numbers certainly were in place for such discussions. The idea of a Free Trade Area of the Americas (FTAA) extending from Canada to Chile and Argentina would mean access to 800 million consumers and an economy of $13 trillion ^[2]. Already 80% of Mexican and Canadian trade and an average of 60% in most Central American countries was with the US. The potential for opening up the markets between North and South America, with major players like Brazil in the south, which alone makes up 21% of the population of the Americas, could clearly be beneficial for all ^[1].

Smaller regional free trade agreements like NAFTA, signed in 1993, and later CAFTA-DR and Mercusor helped encourage the potential reality of a hemispheric FTAA ^[3]. US Vice President Al Gore first proposed the idea in a speech in Mexico City in December of 1993 and discussion and a plan for negotiations shortly followed ^[1].

The 1994 Summit of the Americas in Miami

In 1994, about a year after the implementation of NAFTA, 34 American heads of state (with the only major exception being Cuba) met in Miami for “The Summit of the Americas” and discussed the principles that would guide negotiations for a hemisphere-wide trade bloc. They adopted a Declaration of Principles to guide their new “Partnership for Development and Prosperity” with three major guiding principles:

(1) To Preserve and Strengthen the Community of Democracies of the Americas

(2) To Promote Prosperity Through Economic Integration and Free Trade

(3) To Eradicate Poverty and Discrimination in Our Hemisphere^[4]

Expanding on the second principle, the summit jointly declared: “A key to prosperity is trade without barriers, without subsidies, without unfair practices, and with an increasing stream of productive investments… We, therefore resolve to begin immediately to construct the Free Trade Area of the Americas (FTAA), in which barriers to trade and investment will be progressively eliminated.” ^[4]

The heads of state created a tripartite commission at this meeting consisting of the Organization of American States (OAS), the Inter-American Development Bank (IDB), and the United Nations Economic Commission for the Caribbean and Latin America (ECLAC). They also declared that a conclusion to all FTAA negotiations was to be met no later than December 2005 ^[1]. For many this summit “symbolized the renewal of goodwill and cooperation in the region,” ^[5] but others were concerned even then that it was merely going to be an extension of pre-existing agreements like NAFTA, allotting too much control to those already taking part. In any case, the agreement of the 1994 Summit of the Americas was distinct from all prior declarations of inter-American ambitions in that it projected both a specific plan of approach and a time-frame for completion ^[1].

The Negotiations - Later Summits and Issues

Through the rest of the 90s, the development of FTAA negotiations took the form of a series of similar summits between representatives and heads of state with marked progress toward the goal of an agreement being reached by 2005. In June 1995, the trade ministers of the 34 nations met to negotiate in Denver, Colorado and created 12 groups at the vice-ministerial level, each chaired by a different nation. These groups met nine times in order to amass information and bring forth and explore all of the issues and concerns for all parties involved ^[1]. In 1996, representatives met for a Summit on Sustainable Development in Santa Cruz, Bolivia and agreed upon an inter-American strategy for public participation ^[6]. In 1998, the trade ministers met again in San Jose de Costa Rica in order to agree upon a consensus document on the format of the FTAA, marking some of the first agreements toward equality between economically unequal partners, with Brazil gaining the status of an important player in inter-American affairs by confronting US views with the backing of Mercusor ^[1]. Also in 1998, a summit in Santiago, Chile was held to examine the role of civil society in the free trade agreements, with the Committee of Governmental Representatives setting up a mechanism for receiving input from the public and NGOs in the negotiation process ^[6].

Throughout these and other meetings, the major issues debated included:

(1) Different perceptions of how the FTAA should be formed.

Some argued for a gradual extension of NAFTA to FTAA or perhaps Mercusor first into a SAFTA and then an FTAA, while others advocated for the five major existing regional agreements to negotiate with each other as units. Others thought that the fairest way to go about the FTAA would be to see it as a completely new initiative^[7]. The recognition that any process of gradual extension or negotiation between existing parties would give countries such as the US with the NAFTA option an unfair influence largely decided the issue.

(2) The role of the existing subregional groupings in negotiating FTAA.

With the decision to create a completely new agreement, should the already existing agreements and economic regional groupings come into account? The US advocated for all countries to act as individual entities whereas Brazil advocated for groupings such as the Andean Community and the Central American Common Market to act as unified entities.

(3) The way in which the FTAA should enter into force.

Representatives decided that all countries should enter into free trade at the same time as opposed to a process of gradual implementation^[1].

Leaving the 1990s

As of April 2001, negotiations were continuing to develop and all of the parties involved still agreed on many of the principles set forth in 1994, seeing greater economic integration and the elimination of subsidies and tariffs between nations as the chief hope for regional prosperity. Early in 2001, all 34 American nations agreed on a draft of the FTAA that was consistent with the rules of the World Trade Organization (WTO) and still planned to have it passed before the end of 2005 ^[8]. Unfortunately, the events of September 11, 2001 introduced a dramatic shift in US international relations, again elevating national security to the prime motivator for all action and necessarily affecting greatly the negotiations for free trade in the hemisphere.

Evolution of the Bush Administration

At his election, US President George W. Bush had hoped that “his legacy in US-Latin American relations would be to build a permanent Free Trade Area of the Americas” ^[9]. Early in his presidency, he successfully convinced many hesitant, economically weaker nations of the Americas that economic integration and free trade would be a positive force for all involved in bringing development, prosperity, and peace to the region ^[2]. He succeeded in achieving the presidential “fast track” authority in trade negotiations from Congress that President Clinton had failed in achieving, furthering the promise for trade agreements in the Americas ^[10]. Bush went out of his way to develop special relationships with Latin American leaders like Mexican President Vincente Fox, breaking the presidential tradition of visiting the Canadian president for his first presidential visit to show the importance of his relationship with Fox and Mexico and opening up talks about immigration reform in the US that would be important to Mexico ^[2]. However, September 11 shifted the attention of the Bush administration from Latin America to the Middle East and from opening borders to closing them ^[9]. In the post-September 11 world, it quickly became clear that the US was not going to continue to be the leader in promoting positive relations in the Americas and the FTAA. International disagreements about the war in Iraq and US immigration even further served to sever once promising ties between the Bush Administration and Latin American leaders, causing some like Vicente Fox to actively fight the association in order to save their own public opinions ^[2].

In the absence of US leadership in FTAA negotiations, they were either doomed to be forgotten or others needed to step in. Mexico and Brazil were the major actors in filling the void that the US had left and continuing to push for progress in the FTAA negotiation process ^[2]. Brazilian President Luiz Inacio “Lula” da Silva rose as a particularly powerful leader in the process, seen as impressively balanced between “the financial establishment and its critics” ^[10]. Shortly after his election in 2003, Lula was the only national leader who attended both the World Economic Forum in Davos, Switzerland and its counterpoint, the Social Forum in Porto Alegre, Brazil. He has used the full force of his influence in South America to insist on the US lifting agricultural subsidies and tariffs ^[10].

Resistance

Other parties such as Venezuela in particular and some of the Mercosur nations have grown strongly in their resistance of FTAA^[3]. In North America, opposition has been raised from parties as variant as US labor and environmentalist groups and nationalistic Republican factions. Unprecedented scales of FTAA protest were reached in Quebec City as early as 2001 and, in 2002, the representatives at the World Social Forum (WSF) concluded that they needed to wage an all-out campaign against the FTAA through organizing “national plebiscites” throughout the region to expose the unchecked potential for transnational corporations to gain power over national governments in this form of free trade ^[11]. The environmentalist groups have continued to voice major concerns in considering whether the environmental impacts of the existing subregional trade agreements would suggest similar environmental issues on a larger scale with the FTAA ^[12].

At its most basic level, many hold the simple contention that free trade lacks the means of pulling the least developed countries out of their economic problems that its supporters claim. Many still see free trade as merely an opportunity for the rich countries to get richer while keeping the poor countries poor ^[5]. Especially as anti-US sentiments in Latin America are on the rise, the FTAA has become to many simply another attempt at US imperialism in the area ^[13].

Even if people were generally convinced of the economic benefits of free trade, it would be overly simplistic to consider the FTAA as solely an economic question, separate from broader political and international discussions ^[6]. Whatever happens, many argue that it will take another 10 to 15 years for the economies to adjust and for people to see what the result of the agreements really will end up being^[1].

Current State of Negotiations

The Summit of the Americas in 2005, the year by which the negotiations were originally intended to be completed, may have marked the end of progress on the FTAA. Argentina, Brazil, Paraguay, Uruaguay, and Venezuela effectively have joined together to prevent any progress of the FTAA without the US changing some of its economic policies. As Chavez vowed to “bury” the FTAA before the summit and international communities rallied for unprecedented protests in 2005, the negotiations are currently perceived as, in all actuality, dead to most^[13]. Clicking on the “What’s New” section of the official FTAA website reveals this clearly enough, the last update dating June 2006^[14].

Meanwhile, the Bush Administration has picked up the strategy of extending and negotiating new subregional agreements with Central America and now various South American nations such as Panama and Colombia as well in aims to continue the movement toward free trade in the hemisphere on its own terms^[15].

Another, particularly current issue is the role of the political futures of various Latin American countries in the negotiations. Since the beginning, Cuba has been kept out of the entire process because of its conflicting economic system and authoritarian rule ^[1]. If other nations shifted back toward authoritarian rule (Venezuela), they would necessarily be excluded from the potential of the FTAA as well.

Policy Recommendations

It seems that the FTAA specifically as it has been discussed here is no longer an issue to be debated, though movements toward free trade in general are growing. Any future hemisphere-wide free trade area will most likely be formed as an extension of NAFTA and other regional agreements or perhaps an agreement between these regional entities. In any case, if the movement is toward free trade, then those taking part in the movement (especially those leading the movement) must remain loyal to the foundational principles of free trade, not their specific self-interests and political battles. As explained in the parts of the presentation on NAFTA and CAFTA, the largest opposition and problems that come from these trade agreements originate from trade being, in fact, not free (governmental subsidies and tariffs being maintained) due to other priorities taking precedence over the freeing of trade obstacles.

As it will take a significant amount of time for the economies of various countries to adjust to these agreements, we still don't really know what the ultimate result of free trade will look like. It makes sense to me that we should move cautiously in jumping into such agreements, carefully studying and being informed by the unexpected elements of current agreements.

FTAA Discussion Questions

External Links

FTAA Official Site

Global Exchange's Top Ten Reasons to Oppose the FTAA

US Trade Representative's Website on FTAA

Citizens Trade Campaign on FTAA

References

FTAA Annotated Bibliography

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