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Prospects for the FTAA

It has now been ten years since President Bill Clinton hosted the first Summit of the Americas in Miami and initiated the process for creating a Free Trade Area of the Americas (FTAA), and despite much hard work by several United States (US) Trade Representatives, achieving an FTAA agreement remains elusive. A long delay in obtaining Congressional approval of Trade Promotion Authority (TPA), and difficult issues regarding market access between the United States and Brazil and the countries of Mercosur have stymied progress, and at times, threatened to derail the overall negotiations.

Now the US presidential election has put further talks on hold, and observers in the US and Latin America are holding their collective breath for a sign that the FTAA dream is still alive. As this article is being submitted for publication, the election is too close to call. Thus, these comments on the prospects for the FTAA from the US perspective must necessarily consider the scenarios in case either President Bush or Senator Kerry is elected. Who wins the election may well determine the fate of the FTAA because history has demonstrated that large trade initiatives require strong presidential leadership in order to be realized.

Some have questioned whether the election of John Kerry would make it more difficult, if not impossible, to achieve an FTAA agreement, given his preoccupation with labor and environmental rights in international trade agreements. However, recent campaign statements by Kerry clearly imply that, if elected, he will continue and complete the FTAA negotiations, but will insist on including labor and environmental standards in the agreement.

As a Democrat who enjoys support from labor and environmental groups, Kerry will have more credibility than President Bush with these two constituencies and with President Lula, a former labor leader, in completing the FTAA agreement and in obtaining the support to achieve approval by Congress. Nevertheless, the greatest challenge to overcome is convincing Brazil and Mercosur to consent to an agreement with real substance, instead of a diluted one, and to accept that free trade is a two-way street where each side has to give some to win some.

President Bush is fully committed to achieving an FTAA agreement, and enjoys strong support from the business community, but has not been able to persuade President Lula to sign on to a full-scale version of the agreement. He is also facing stiff opposition from labor and environmental groups, and thus will have a very difficult time obtaining a majority in both chambers of an evenly-divided Congress for an FTAA agreement. Although Republicans hold a slim majority in the House and Senate, this could change on Election Day. In any event, it will require significant support from the Democrats to achieve approval of the FTAA, and President Bush may find it very difficult, if not impossible, to get their support. Thus, he faces even greater challenges than a President Kerry in completing and obtaining approval for an FTAA.

President Bush may still be able to achieve success on both fronts, but a President Kerry may be in a stronger position to provide the renewed impetus and forge the coalition necessary to achieve the FTAA in the near future. If Kerry is elected, there may be a replay of the North American Free Trade Agreement (NAFTA) experience when President Clinton took the ball from President George H. W. Bush and successfully achieved ratification of that agreement, along with side agreements on labor and environmental standards, and made it possible for him to initiate the FTAA negotiation process.

In order to obtain the necessary political support for the FTAA, either President Bush or President Kerry will have to more clearly articulate the vision of what the FTAA means for the future economic well-being and political future of both the United States and the rest of the hemisphere. Trade agreements have increasingly become more political, and the political benefits, as well as the economic benefits, of the FTAA have to be clearly understood by all the countries in order to achieve a successful outcome.

At this crucial phase in the negotiations, it is imperative that the next President of the United States convey the vision of the FTAA as not just another international trade agreement, but as the foundation of a future Community of the Americas. In other words, the FTAA must be portrayed as not just about expanding trade and increasing profits for business enterprises, but also about expanding economic opportunity and development for all the people of the Americas and strengthening the inter-American alliance through a renewed sense of community in the Americas.

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