- The Washington Times - Monday, December 15, 2003

Last month, U.S. Trade Representative Robert Zoellick and 33 other Western Hemisphere trade ministers gathered in Miami to discuss the proposed Free Trade Area of the Americas (FTAA) — originally conceived a decade ago to create a barrier-free trading area stretching from the Arctic to the Antarctic.

In the months leading up to the meeting, Brazil — the largest economy in the hemisphere after the United States — had essentially tried to shut the door on the whole trade initiative. But Mr. Zoellick stuck his foot firmly into that door in Miami and kept it from slamming closed, buying additional time to keep the process moving forward and avoiding a second collapse of major trade talks within three months.

It is now up to American government and business, in tandem with other pro-market governments and businesses in the region, to put our shoulders to the door to push it back open and revive the goal of an ambitious and comprehensive FTAA agreement within the next year.

In a joint communique at the end of the Miami summit, intended to guide negotiations toward a conclusion by January 2005, the ministers decided to split the accord into a basic agreement and additional agreements that would enable countries to assume different levels of commitments in the FTAA.

The basic agreement would include “a common and balanced set of rights and obligations applicable to all countries.” It would cover all areas that have been under negotiation since 1998, ranging from market access to basic trading rules, though not at the high levels that we have been seeking. The second tier is made up of optional provisions that would allow countries to choose to participate in the FTAA at more ambitious levels by going further in terms of the commitments they make and the benefits they receive.

The emergence of this new duality stirred much concern among the U.S. and other regional business representatives gathered in Miami to track the negotiations. Most of us would rather the FTAA be a single undertaking in which all aspects of the final agreement would apply to all members. Although many Americans’ dedication to the principle of free trade has wavered through the recession, I believe support will improve over time as the economy continues to grow and unemployment falls.

The new approach raises the fear that provisions in key areas, such as investment, intellectual property and government procurement, might achieve only minimal common improvement over existing rules or significant improvements among only a small number of the FTAA member countries. But despite these and other risks, we recognize that the Miami declaration represents the hemisphere’s only hope for moving forward with the FTAA’s once-in-a generation opportunity to expand regional trade integration and inject dynamism into the economies of all the Americas.

Given this new negotiating framework, can we still achieve an ambitious and comprehensive FTAA? I believe so. Brazil may seek a lower level of achievement, but the rest of the hemisphere need not. The key is to insist that there be only two tiers within the FTAA: a lower level for those who seek to offer up little and achieve little and a high level for everyone else. What we must avoid is a multiplicity of levels of commitment that would yield a spaghetti bowl of varying standards in areas such as customs clearance, intellectual property, investment and rules of origin.

There is no reason to settle for less than the highest-quality agreement with most of the countries in the hemisphere. There is, in fact, an excellent way to move ahead — working with the countries that already have, or are negotiating, individual free-trade agreements with the United States. These countries should be prepared to push for a high-standard FTAA because they have already had to meet such conditions in their bilateral agreements with us.

In Miami, Mr. Zoellick announced new free-trade agreement talks with Colombia, Peru, Bolivia, Ecuador, Panama and the Dominican Republic. U.S. negotiations with the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are on track to conclude by the end of this year. The recently approved U.S.-Chile free-trade pact will take effect at the start of next year. And we are about to celebrate the 10-year anniversary of our NAFTA partnership with Canada and Mexico. These nations make up 90 percent of U.S. exports to the Western Hemisphere and provide a solid basis for an ambitious high tier of the FTAA.

These countries and the United States should immediately gather together as the “friends of ambition” and agree to push for high-quality hemisphere-wide provisions in the FTAA for everyone willing to join in. The result would be a formidable economic synergy, as we open our markets to one another under a comprehensive, gold standard set of rules that will facilitate regional cooperation and renewed economic dynamism.

In addition to insisting on a single upper tier itself, the “friends of ambition” group should work hard to create incentives to encourage Brazil and other reluctant partners to move toward the top tier as well. The key principle must be that benefits can only be commensurate with obligations. As negotiations proceed, there is a good chance that Brazil and its common market partners (Argentina, Paraguay and Uruguay) will recognize the costs of being left behind and will see that an ambitious FTAA is in their interest as well.

If we all join together and push hard, the vision of free trade in the Western Hemisphere can still become a reality.

Jerry Jasinowski is president of the National Association of Manufacturers.

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