USTR - Free Trade, Free People
                 
The Office of the United States Trade Representative

Free Trade, Free People
The Bush administration has taken a big step by notifying Congress of our intention to begin negotiating a Southern African Free Trade and Development Agreement. 11/04/2002


The Wall Street Journal

Commentary

During the Cold War, the U.S. persevered to extend the opportunities of liberty to all lands. Yet the new seeds of liberty can only flourish if we overcome another division -- no longer between East and West -- but instead between North and South. Today, from El Salvador to South Africa, we have the chance to employ free trade to help fulfill President Bush's commitment to include all the world's poor in an "expanding circle of development."

The administration has taken a big step toward that goal today by notifying Congress of our intention to begin negotiating a Southern African Free Trade and Development Agreement, or SAFTDA, with South Africa, Botswana, Lesotho, Namibia, and Swaziland. These path-breaking negotiations follow on the heels of our new talks with five nations in Central America and with Morocco. By the end of this year, we hope to have completed free trade agreements with Chile and Singapore. And the president just announced an "Enterprise for Asean" initiative to create a framework for possible free trade agreements with countries in Southeast Asia.

The United States is employing the momentum gained from the passage of the Trade Act of 2002 in global, regional, and bilateral negotiations to further open today's big markets -- in Europe, Japan, China, and Australia -- for America's farmers, workers and businesses. Yet President Bush has directed that we also reach out to the many developing countries struggling to gain an economic foothold. These are the growth opportunities of tomorrow.

As part of the new Trade Act, we have just implemented amendments opening an estimated $20 billion of tariff-free trade from developing economies. In the World Trade Organization, we are pushing to open agricultural markets vital to growth in developing nations and to employ the flexibilities in the international intellectual property rules to help poorer countries deal with epidemics such as HIV/AIDS. We are pursuing negotiations with developing countries in our own hemisphere to create the world's largest free trade zone, the Free Trade Area of the Americas.

The new American trade agenda serves our security interests. The offensive against terrorism requires fresh thinking about how to tackle the global challenges of poverty and privation. To be sure, the source of terrorism is not poverty; to believe that is an insult to people all over the world who struggle daily to overcome hardships. Terrorism's roots lie in a deep evil and fanatic ideologies. But there is no doubt that societies that fragment, that are poor, that have no sense of hope, become fertile grounds in which terrorists can burrow. So all of us have a stake in development and democracy.

By knitting America to peoples beyond our shores, new U.S. trade agreements can encourage reforms that will help establish the basic building blocks for long-term development in open societies, including:

-- The rule of law: Trade agreements encourage the development of enforceable contracts and fair, transparent governance -- helping to expose corruption.

-- Private property rights: These are a necessary ingredient for economic development because they encourage saving, investment, exchange and entrepreneurship. Trade agreements bolster property rights by safeguarding the right to establish businesses, guaranteeing that investments will not be appropriated arbitrarily, supporting privatization, and fostering knowledge industries.

-- Competition: Free trade fosters competition, the hallmark of successful economies. Developing countries suffer at the hands of elites who cling to their positions by depriving ordinary citizens of less-expensive, better-quality goods and services that can be had through competition. Free trade agreements attack manipulated licensing systems, state monopolies and oligarchies that keep affordable products off store shelves.

-- Sectoral reform: Trade agreements drive market reforms in sectors ranging from e-commerce to farming. For example, in our FTA discussions with Morocco, we are examining how we can work with Morocco's World Bank program to restructure its agricultural sector. The U.S. has also advanced an aggressive agriculture reform proposal in the WTO negotiations that would eliminate $100 billion globally in trade-distorting farm subsidies and lead to better agricultural policies in developed and developing countries alike.

-- Regional integration: The lesson of the European Union and Nafta is that location matters, in economics as in politics. Therefore, as we prepare for free trade agreement negotiations with democracies in Central America and Southern Africa, we will explore how we can support beneficial regional integration and promote growth clusters.

-- Joining trade with aid: This year, the U.S. is spending $638 million to help developing countries build the capacity to take part in, implement, and fully benefit from trade negotiations. The USAID and the Inter-American Development Bank have been our cooperative partners in this new thinking about trade, aid, and development.

Ultimately, free trade is about freedom. This value is at the heart of our larger reform and development agenda. Just as U.S. economic policy after World War II helped establish democracy in Western Europe and Japan, today's free trade agenda will both open new markets for the U.S. and strengthen fragile democracies in Central and South America, Africa, and Asia.

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Mr. Zoellick is the U.S. Trade Representative.