Why Wait for US to Engineer Hemispheric Free Trade?
SINCE the approval last year of the North American Free Trade Agreement, Latin American and Caribbean governments have been looking to Washington to propose a strategy for building toward a hemisphere-wide free-trade system.
They should stop waiting and start working out their own proposals for regional trade arrangements, making clear what it is they want from the United States and its NAFTA partners, Mexico and Canada.
President Clinton, Vice President Gore, and other administration officials have stated that they want to forge a hemispheric free-trade pact that would encompass all the nations of the Americas, and that they consider NAFTA the first crucial step in that direction. Yet there is little indication so far that Washington plans to move very quickly - or even soon - to set out the basic ground rules for proceeding. A draft policy statement from the US trade representative last November stated that the ``substantial movement toward a true HFTZ (hemispheric free-trade zone) is not realistic in the medium term.''
In his remarks announcing the Summit of the Americas (the US-proposed meeting of democratically elected hemispheric leaders), the president did not include regional free trade among the meeting's two central themes.
Concrete proposals from Latin America and the Caribbean on hemispheric free trade, particularly if they are broadly supported, could significantly affect Washington's priorities. With the administration now actively engaged in defining the purposes and agenda of the summit, Latin American views should command more attention than usual. Those views that are shared and expressed by many nations are likely to be more influential than those of specific sectors or individual governments that appear to be jockeying for advantage.
No matter how much goodwill there is in Washington, the choices that must be made about trade and economic integration are too important for the countries of the region to leave to the US alone - or to the US and its NAFTA partners.
The decisions reached on integration will affect not only the economic benefits that specific Latin American countries and the whole region can expect from freer trade. They will also leave their mark on the politics of many nations, influence the direction of domestic economic and social reform efforts, shape relations among the countries of the region, and condition the region's links to the rest of the world.
The nations of Latin America and the Caribbean should work to develop policy responses to these critical questions:
* Should Latin American countries seek bilateral free-trade deals with the US or accession to an expanding NAFTA? Is it appropriate for different nations to proceed differently?
* Is it appropriate for countries that are members of existing subregional trade pacts (like the Mercosur or the Central American Common Market) to seek entry into NAFTA or pursue bilateral arrangements with the US? Will they face conflicting obligations? Should this be each country's choice or should its subregional partners also be involved?
* Should the US, Mexico, and Canada be called upon to establish explicit criteria and procedures for other countries to join NAFTA? Should countries meeting the criteria be automatically assured entry if they so desire? What should be the conditions for accession? Should there be any provision for poorer or weaker countries that may have special difficulties in qualifying?
* How should trade relations be managed with those countries that are not yet ready to be incorporated into an expanding NAFTA? This is a question that immediately affects the countries of Central America and the Caribbean.
* Should democratic rule be a condition for entry into a regional free-trade system? Should a member country be suspended for violating democratic norms or for systematic abuses of human rights? Are special procedures or mechanisms needed to manage these kinds of political issues?
* Should such issues as environmental protection and labor rights, which became so controversial during the debates over NAFTA, be directly addressed in future free-trade agreements or should they be handled independently? How can this be done most effectively?
Latin American and Caribbean governments must also consider whether to press for the establishment of a regional organization or other multilateral framework to coordinate and monitor progress toward a Western Hemisphere free-trade area. Indeed, that might well be the most important item for discussion at the upcoming Summit of the Americas. Without such a framework, the key decisions will invariably fall to Washington. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.