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And the Threat to Social Programs, Environmental Sustainability and Social Justice in Canada and the AmericasPart 2 of 6 For the PDF version click here. What Is the FTAA? The Free Trade Area of the Americas is the name given to the process of expanding the North American Free Trade Agreement (NAFTA) to all the other countries of the Western Hemisphere except Cuba. With a population of 800 million and a combined GDP of $11 trillion (US), the FTAA would be the largest free trade zone in the world. If reports coming from the Negotiating Groups working on the key elements of the deal are correct, the FTAA will become the most far-reaching free trade agreement in the world, with a scope that will reach into every area of life for the citizens of the Americas. The FTAA was launched by the leaders of 34 countries of North, Central and South America and the Caribbean at the December 1994 Summit of the Americas in Miami, Florida. At that meeting, then President Bill Clinton pledged to fulfil former President George Bush's dream of a free-trade agreement stretching from Anchorage to Tierra del Fuego, linking the economies of the hemisphere as well as deepening social and political integration among the countries based on the same free-market model as NAFTA. However, little real progress was made until the next Summit of the Americas, this one held in Santiago, Chile, in April 1998, at which time the countries set up a Trade Negotiations Committee (TNC), consisting of the vice ministers of trade from each country. With support from a Tripartite Committee made up of the Inter-American Development Bank, the Organization of American States and the UN Economic Commission for Latin America and the Caribbean (ECLAC), nine Working Groups were established to deal with the major areas of negotiations: services; investment; government procurement; market access (covering tariffs, non-tariff measures, customs procedures, rules of origin, standards and technical barriers to trade); agriculture; intellectual property rights; subsidies, anti-dumping and countervailing duties; competition policy; and dispute settlement. As well, three non-negotiating special committees were established to deal with the issues of smaller economies, civil society and electronic commerce. These committees and working groups have been meeting with increasing frequency throughout 1999 and 2000 and the early part of 2001, regularly bringing over 900 trade negotiators and mountains of material to Miami where most of the meetings take place. From the beginning, the big corporations and their associations and lobby groups have been an integral part of the process. In the U.S., a variety of corporate committees advise the American negotiators and, under the Trade Advisory Committee system, over 500 corporate representatives have security clearance and access to FTAA negotiating documents. At the November 1999 ministerial meeting in Toronto, the Ministers of Trade of the Americas agreed to implement 20 "business facilitation measures" within the year in order to speed up customs integration. One of the tasks of the negotiators is to compare and consolidate the key components of a variety of trade and investment agreements throughout the area, including:
There are some differences among these pacts and agreements; MERCOSUR's goal, for example, is to become a common market, whereas NAFTA has not attempted to establish common labour standards among its three members and the U.S. clearly would not tolerate the free movement of labour from Mexico. And MERCOSUR does contain some social provisions and programs for displaced workers that are absent from NAFTA. But the similarities between these treaties far outweigh the differences. Both NAFTA and MERCOSUR include measures to deregulate foreign investment and grant national treatment (non-discriminatory) rights to foreign investors. Both prohibit "performance requirements" whereby foreign investment must enhance the local economy and support local workers. And both are based on a model of trade and investment liberalization that locks in the Structural Adjustment Programs (SAPs) introduced earlier into Latin America by the World Bank and the International Monetary Fund (IMF). Under these programs, most developing countries were forced to
Tensions of leadership exist in the negotiations. Since 1995, the U.S. Adminstration has been unsuccessful in obtaining renewal for its "fast-track" legislation, which basically authorizes Congress to adopt free trade agreements in full. This has given Brazil, the undisputed economic leader in Latin America, the opportunity to challenge U.S. supremacy in the negotiations and bid to lead the process of economic integration of the Americas. As well, the encroachment of the business community of the European Union into Latin America, especially in banking, telecommunications, automobiles and consumer products, has served as a catalyst for the United States to reassert its leadership in the hemisphere. The EU has been intensifying its presence in the region, negotiating individual free trade and investment agreements with countries such as Chile, Mexico and Brazil. The U.S. is counting on the successful completion of the FTAA to maintain the dominance of its corporate sector in the region. Further pressure has been placed on obtaining a successful FTAA in the light of the defeat of the Multilateral Agreement on Investment (MAI) at the first ministerial meeting of the WTO in 1996 and at the Organization for Economic Cooperation and Development (OECD) in 1998, and the shut-down of the "Millennium Round" meeting of the WTO in Seattle in December 1999. In fact, WTO officials are finding it difficult to even secure a venue for a new Ministerial meeting. As well, APEC - the Asia Pacific Economic Cooperation Forum - is faltering and few have expectations that it will make the hoped-for breakthrough to become a free trade and investment zone. Many trade observers and pundits have identified the FTAA as the natural heir of these failed projects and are fearful that another such failure could put the whole concept of these massive free trade agreements on the back burner for years. In fact, in a January 2000 statement, Associate United States Trade Representative Peter Allegeier said that the FTAA has taken on new importance after the fiasco in Seattle and may well aspire to go further than the WTO, freed of the need to play the deals off against one another. The next ministerial-level Summit of the Americas is to be held in Quebec City in April 2001. At this Summit, leaders will be presented with a heavily bracketed first draft for a Free Trade Agreement of the Americas, out of which they will start to fashion a full text. The agreement was originally intended to be completed for implementation by 2005, but some countries, including Chile and the United States, are pushing to move the ratification date up to 2003, depending on how far negotiators get at the Quebec City Summit meeting. |
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January 18, 2007
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