of the United States Trade Representative
|The Route from Miami to Economic Freedom
By Robert B. Zoellick
The recent Miami meeting of the 34 democracies of the Americas charted two
complementary courses for achieving hemispheric free trade. Deepening
integration among the 800m people of the Americas will - like the rise of China
- help shape events globally. The extent of the New World's new influence will
depend on the pace and scope of the economic synthesis, similar to the way
Europe's Union worked to combine visions with realities over time.
One course outlined in Miami is to complete the
negotiation by 34 nations of a single Free Trade Area of the Americas. Even as
we advance along the FTAA track, the US and 11 Latin American countries are
pursuing a second course of comprehensive free trade agreements that achieve the
highest standards - in effect extending the North American Free Trade Agreement
and the recent US-Chile FTA.
The US is working to
complete an FTA with five Central American economies by year-end. We hope to
integrate the Dominican Republic into this Central American FTA early next year.
Panama will begin FTA negotiations with the US next spring. So will Colombia and
Peru, followed, when ready, by Ecuador and Bolivia. Together, this league of
accords would progress a long way towards free trade in the Americas. The US
apart, these partners represent 68 per cent of the hemisphere's gross domestic
product. US trade with the Central Americans and the Dominican Republic alone
exceeds our trade with Brazil.
enable us to customise for the diversity of the Americas. After Miami, headlines
from our newest free trade partners gave their assessments: Colombia's El Tiempo
declared "Historic News"; in Peru, El Comercio said "A Door Was Opened"; and, in
Panama, La Prensa wrote of "the big smiles" of its leaders.
For Colombia, an FTA is a vital vote of confidence and an investment in
economic strength as President Alvaro Uribe fights narco-trafficker terrorists
trying to rip apart one of Latin America's oldest democracies. Cafta offers hope
to fragile democracies that need to show their citizens they can prosper and
help one another in a global competition, even with the Chinese. For the
Dominican Republic, an FTA can help overcome recent financial crises, resume the
high growth of the 1990s, strengthen the Caribbean economy and empower democracy
with transparency. Peru's free trade with the US can bolster a restored
democracy, as President Alejandro Toledo deploys economic incentives to light a
path away from the shadows of Fujimori's regime and beyond the neo-populist
fantasies of economic autarky. For Panama, an FTA like our recent agreement with
Singapore can help build a service economy hub at a unique juncture of east and
west, north and south.
To encompass the Caribbean
democracies and Mercosur - Brazil, Argen tina, Uruguay and Paraguay - we need to
complete a quality FTAA. Caribbean countries already enjoy special access to the
US. Our goal for the FTAA is to give them new opportunities by linking
connecting aid to trade liberalisation that suits their circumstances. Mercosur
also wants to move towards more open markets. Given their recent financial
crises, these countries are devoting considerable energy to stabilising their
economies. They are working through understandable uncertainties, compounded by
frustrating economic histories, about how to combine trade and new rules with
Critics of Miami's outcome apply an unfair
standard. The FTAA envisaged in Miami would remove all goods tariffs, seek
substantial openings for agriculture and services and add rules in many other
sectors. Given Mercosur's average applied goods tariff of 13.5 per cent - with
applied rates on vital goods of about 20 per cent and average bound tariffs of
about 30 per cent - free trade in goods alone would be a huge stride. By
contrast, the south-east Asian nations working on an FTA are still struggling to
eliminate internal trade barriers on goods, and myriad agricultural barriers
remain. Other so-called FTAs in Asia frequently involve just lowering barriers
in select sectors.
With so much attention devoted to
the FTAA's ambition on topics such as investment, it is useful to benchmark with
other negotiations. The WTO cannot even launch a negotiation on investment. The
EU, some 50 years into its integration process, has been pursuing a takeover
directive that not only preserves national investment barriers but may also be
at odds with international obligations.
Mercosur - and economic communities within it - will expand their interest in
rules that foster investment, protect knowledge and creative industries, help to
counter corruption, lower costs and improve the quality of service sectors.
These topics are increasingly vital for development. Indeed, some countries are
already willing to go further on these topics. Argentina has a bilateral
investment treaty with the US that matches the high-quality provisions in our
FTAs. Uruguay recently announced it wanted to negotiate a similar accord. Labour
party governments should also want to work creatively with us to improve
workers' rights and enhance environmental conditions, while avoiding
We have a historic opportunity to expand
trade, prosperity, democracy and a hemispheric partnership amid global
competition. To expand the circle of political and economic liberty in the
Americas, businesses, farmers, workers, Latino-Americans and US
internationalists will need to advance along the two courses mapped in Miami.
With support, the steps toward economic freedom and opportunity will keep
The writer is US trade