- The Washington Times - Wednesday, April 11, 2001

The Summit of the Americas, to be held later this month in Quebec City, is an important opportunity for U.S. president George W. Bush to advance the goal of a hemispheric trade deal stretching from Alaska to Argentina. The rest of the hemisphere is waiting for U.S. leadership on the issue, but there hasnt been much evidence of it so far.
A Free Trade Area of the Americas (FTAA) would include 800 million people from 34 nations, with a combined economic output of $11 trillion, creating what would be the largest regional trade bloc in the world. It would open important new markets for goods and services, helping many struggling nations liberalize their economies and speed their growth. It could also help secure and strengthen democracy in the hemisphere.
Negotiators are hoping to conclude a pact by 2005, but the bargaining is exceedingly difficult. One reason is that the FTAA aims to go much farther than NAFTA. Issues on the table include: agriculture, investment, services, government procurement, market access, competition policy, intellectual property rights, dispute settlement and common definitions of such things as subsidies, dumping and countervail.
Some progress has been made, but there are real dangers ahead. One is the fact that the Quebec City summit is gradually being hijacked by protest groups threatening another battle in Seattle. Canadian police and security forces anticipate up to 25,000 protesters at the April 20-22 meeting. Organizers are spending in excess of $20 million (U.S.) on security measures, including a 10-foot high, 2.5-mile fence that will protect the area where delegates meet. The unprecedented security may well succeed in saving the local McDonalds from getting smashed. But it may not stop political leaders from caving in to demands that the trade deal include a grab-bag of measures to protect the environment, labor or human rights.
The risk here is obvious. Freighting the trade talks with issues that have nothing to do with trade could kill the FTAA negotiations, which are complex and sensitive enough. As one Canadian business executive put it: People are looking at trade deals as a Christmas tree that they want to hang every ornament on. If you do that, youre going to break down the basis of what makes a trade deal work.
Whats needed now is a real demonstration of political will especially from the United States that free trade is a priority and that other issues in the hemisphere will be dealt with separately. Most of the calls for labor and environment clauses in the FTAA come from union groups and activists in North America, not to mention Democrats in Congress. The irony is that developing nations in Latin America and the Caribbean dont want them. Spelling out labor and environmental standards in a trade deal (and imposing sanctions on countries whose standards may be lower than in the United States) is simply protectionism in another guise.
The issue could stall the trade talks at a critical point. The Quebec City summit needs to generate a renewed sense of momentum on the trade front. But, as the General Accounting Office warned last week in a pessimistic report, some FTAA participants believe the United States has been distracted from pursuing trade liberalization because it is without a domestic consensus on the benefits of trade and the way in which to handle the overlap between trade and labor rights and the environment.
Another danger as we approach Quebec City is the continued absence of fast-track negotiating authority in the White House. Fast track (now known as Trade Promotion Authority) would limit Congress to a yes or no vote on the whole deal. It was a key factor in the Clinton administrations ability to get NAFTA through Congress without the deal being picked apart by special interests. Without fast track, developing countries will be reluctant to negotiate seriously. Their fear is that a carefully negotiated package of compromises might simply fall apart once Congress starts to add its own demands. Securing fast-track authority will send a key signal to all FTAA participants on the seriousness of U.S. intentions, says Jos Manuel Salazar, special trade adviser to Organization of American States.
The stakes for the United States should be obvious. As the GAO pointed out, a Free Trade Area of the Americas could provide significant economic and geopolitical benefits. The region purchases about 36 percent of U.S. exports and receives 23 percent of U.S. foreign direct investment. But U.S. products still face barriers to trade in the hemisphere, including average tariffs of 10 per cent in countries outside of NAFTA.
An FTAA would continue moves already underway in many countries to liberalize and privatize their economies. Its no accident that increased economic openness over the last two decades has coincided with remarkable political change. As recently as 1975, there were 19 dictatorships in the hemisphere. Today, only Cuba remains outside the democratic family and therefore not invited to Quebec City.
While democracy is still fragile in countries such as Haiti, Colombia and Peru, it is beginning to take firmer root. What is clear is that without economic growth, trade and development, efforts to combat poverty and drug trafficking will suffer. And threats to democracy will persist.
Its time for the Bush administration to get the Quebec summit on its radar screen and to send out the right signals on trade liberalization.


Peter Hadekel is the editorial page editor of the Gazette in Montreal, Quebec.


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