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Business Network for Hemispheric Integration Monitors FTAA Progress The delegates from Brazil reported that President Fernando Henrique Cardoso recently met with the leaders of the Central American Common Market in San Jos�, Costa Rica, but noted that expansion into this market lies in the future. While continuing to try to consolidate the integration of Mercosur, Brazil's current priority is to reach an agreement with the Andean Community (ANC) for closer economic integration between the two regional blocs. It appears that the FTAA negotiations have caused a "building block" approach to trade liberalization in the hemisphere. The Panamanian delegation identified that country's greatest challenge as incorporating the entire nation into the modern trading economy instead of relying on clusters of development. Panama is opening up and drawing closer to its Central American neighbors based on equality of benefits, the delegates stated. The Panamanians expressed optimism that the FTAA will increase competitiveness and productivity. The country's private and public sectors are anticipating the transfer of the FTAA Secretariat to Panama in March 2000, which they predict will benefit Panama. They were confident that the transfer would be carried out efficiently, pointing out that Panama has excellent airline connections to accommodate delegations from any country. The delegation from Colombia acknowledged that some of the Andean Community nations are in economic crisis, but insisted that the region's private sector is willing to work in collaboration with government for a joint ANC position in the FTAA negotiations. In Colombia, the delegates explained, the Consejo Intergerencial de las Asociaciones del Sector Privado was formed recently to coordinate private sector positions on FTAA issues. Market access in agriculture is of special interest to Colombia, and meetings have been held at universities and chambers to formulate technically and theoretically solid government positions. The Peruvians reminded attendees that their government is presiding over the ANC in 2000. The delegates noted that agriculture is a particularly sensitive area for Peru, as are questions of unemployment and poverty. In addition to the items under discussion and the need for technical assistance to improve customs procedures, they cited other issues, including contraband, dumping and private sector participation. In Peru, they noted, private sector participation lags behind even Bolivia. Finally, they stressed the need to improve trade links with Europe and Japan as well as the rest of the hemisphere. The US delegation argued that the success of the anti-trade groups in Seattle proves that governments need to market free trade more effectively to their citizens. The US government and business community, they said, are resigned to the absence of fast track authority. The recent passage of the Trade and Development Act 2000, which provided trade preferences to the Caribbean Basin and Africa, was a greater success than expected, although environmental issues remain a sticking point. The delegates went on to say that the US business sector believes that permanent normal trade relations with China will pass. Regarding the FTAA, they said that the US Trade Representative had accepted about half of the suggestions contained in a report prepared by the American Chamber and the Council of the Americas, but the feeling was that the USTR could have gone further. They claimed that US businesses will collaborate with the US government and Latin American private sector to foster cooperation for a successful FTAA in 2005, and seek to avoid a totally bracketed text in 2001. Finally, they concluded that NAFTA has been a success for all three countries involved. They noted that trade has grown by 85% as a result of the agreement, and they argued for the need to educate Congress about the many jobs that have been created. Support for free trade is growing, they insisted, although they acknowledged that the new president elected in the fall will have to deal with free trade issues. The Canadian delegation discussed the WTO trade dispute between Canada and Brazil about airplane production and sales, saying that while a WTO panel had found that both countries were at fault, upon appeal the decision favored Canada. The private sector is concerned that the Canadian government will take retaliatory action that will harm overall trade between the two countries. The delegates concluded by pointing out that Canada has a modern, efficient customs system that could better serve as a model for Latin America than the US system. A summary presentation
included a call for bringing coherence to the many trade agreements in effect in
Latin America and the Caribbean through the FTAA process. The WTO catastrophe in
Seattle did not affect free trade in practical terms, but it did affect the
political ambience and psychology surrounding trade issues. In the meantime, the
FTAA has been moving ahead and has perhaps grown in importance. What must be
avoided, the BNHI noted, is signing a government-to-government agreement for
which the private sector is not ready. The issues of labor and the environment
in trade talks must be handled carefully, the presentation stated. It approved
sharing Canada's customs model with Latin America, given the importance of a
working customs system for free trade. Finally, the BNHI concluded, although the
US government and the leading contenders in the presidential race voice support
for the FTAA, without fast track an explicit sign of US commitment is needed to
instill confidence in the Latin American and Caribbean nations.
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