Free Trade Area of the Americas - FTAA

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October 23, 2000

Original: English



  1. Michael A. Magán, Manager, Western Hemisphere, U.S. Chamber of Commerce
  2. John Murphy, Executive Director, Association of American Chambers of Commerce in Latin America (AACCLA)
  3. Mark Smith, Executive Director, U.S. Section of the Brazil-U.S. Business Council
  1. U.S. Chamber of Commerce
  2. Association of American Chambers of Commerce in Latin America (AACCLA)
  3. U.S. Section of the Brazil-U.S. Business Council
Country      United States of America

Executive Summary

The Association of American Chambers of Commerce in Latin America, the U.S. Section of the Brazil-U.S. Business Council, and the U.S. Chamber of Commerce welcome this opportunity to present our views on the emerging Free Trade Area of the Americas (FTAA). We strongly support free trade in the hemisphere, and we have regularly provided substantive comments and recommendations to the Americas Business Fora and to the trade ministers.

The basic rationale for the FTAA is as strong as ever: hemispheric free trade will foster economic growth and rising incomes throughout the hemisphere. In fact, as a spiderweb of free-trade agreements has emerged in the hemisphere during the 1990s, the economic argument in favor of the FTAA has been strengthened. These new accords raise questions about whether the hemisphere is seeing more “trade diversion” than “trade creation.” A hemispheric free-trade agreement would eliminate these concerns.

To bring the nations of the hemisphere the full benefits of the FTAA as expeditiously as possible, we offer to following recommendations to the negotiating groups:

  • Market Access: The FTAA negotiations should strive for the earliest possible removal of all tariff and non-tariff trade barriers.

  • Agriculture: We recommend that the negotiating countries declare the hemisphere a subsidy-free zone, with all countries in the region pledging to neither extend subsidies on their own exports, nor to admit subsidized imports from outside the region.

  • Services: We urge the negotiators adopt the U.S. government’s “round two” business facilitation proposals numbered 1-4.

  • Intellectual Property Rights: We urge the negotiators adopt the U.S. government’s “round two” business facilitation proposals numbered 7-10.

  • Subsidies, Antidumping and Countervailing Duties: We urge the negotiators to eliminate trade-distorting subsidies within the region and to ensure that that antidumping and countervailing duty regulations conform to clear and transparent standards.

  • Competition Policy: The FTAA should mandate that member countries apply strong national competition policies.

  • Government Procurement: The FTAA should remove domestic preferences and requirements in government procurement, which limit the ability of governments to make the most efficient use of fiscal resources. We urge the negotiators adopt the U.S. government’s “round two” business facilitation proposals numbered 13-16.

  • Dispute Settlement: We urge the negotiators adopt the U.S. government’s “round two” business facilitation proposal number 12.

In addition to these specific recommendations, our submission includes three general recommendations. First, we urge the 34 governments participating in the FTAA process to make the private sector a full partner the negotiations. We applaud the recent decision of the Trade Negotiations Committee (TNC) to post on the official FTAA Web site an official checklist on implementation of the business facilitation measures approved at the Toronto FTAA Ministerial in November 1999. The checklist indicates whether and how the 34 governments have implemented the eight customs-related business facilitation measures agreed in Toronto.

We call on the 34 governments to build upon this decision and make a more concerted effort to engage the private sector in the negotiations. We urge the negotiators to post summaries of draft texts on the Internet from time to time or find other ways to involve the private sector.

As our second general recommendation, we wish to register our opposition to efforts to link trade policy to rules on labor conditions and environmental protection. Nearly all economists agree that free trade raises incomes, and higher incomes lead in turn to improvements in labor and environmental standards.

Efforts to block trade liberalization in the interest of promoting labor or environmental standards fly in the face of these facts. All too often, calls for trade-linked mechanisms to enforce labor and environmental standards are simply protectionism by another name. In fact, advocates of labor and environmental standards often seek to impose constraints in the very areas where Latin America’s economies are at their most competitive.

Improving labor conditions and environmental protection is important, and we advocate serious discussions in international fora on how to address these vital concerns. But trade liberalization is inherently beneficial to workers and the environment, and trade agreements should not be contingent upon labor or environmental standards.

Finally, we urge the 34 FTAA participants to expedite the negotiations. The TNC is apparently making good progress in preparing the bracketed text that will serve as the first draft of the FTAA. In light of this progress, the 2005 deadline seems needlessly distant. In the wake of the Buenos Aires FTAA Ministerial in April 2001, the remaining work will be largely a matter of political will. This being the case, the FTAA could surely be completed in 2002.

We therefore recommend that the trade ministers establish a new deadline of December 31, 2002, to complete the text of the FTAA. Two years is sufficient time to make the political decisions that will form the basis of an agreement, and ratification of the agreement by the hemisphere’s governments can still be completed well before the 2005 deadline. Free trade will bring substantial benefits to all of the countries of the hemisphere. We should seize these benefits without delay.


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