THIRTY-SECOND REGULAR SESSION                                                        OEA/Ser.P

June 2, 2002                                                                                                      AG/doc.4060/02 rev. 1

Bridgetown, Barbados                                                                                       4 June 2002

                                                                                                                        Original:  English

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE OAS, DEMOCRACY, AND TRADE

 

(Document for the Dialogue of Heads of Delegation
of the thirty-second regular session of the General Assembly)

(Presented by the Delegation of the United States)

 

 

 

THE OAS, DEMOCRACY, AND TRADE

 

 

 

The OAS General Assembly should reflect on the approaching deadline of January 2005 for completing negotiations on the Free Trade Area of the Americas agreement that will fortify a community in the Americas committed to democracy, the rule of law, and market-led, broad-based economic growth.  As a precondition for building modern economies and forging 21st-century trade relations, the countries of the Americas have committed themselves to the fundamental freedoms that form the foundation of both democracy and prosperity.  The freely-elected representatives of the people of the Americas recognize that democracy and free trade are mutually reinforcing – and both are indispensable to creating a more stable, more prosperous community.

 

Summit Commitment

 

The 2001 Summit in Quebec City produced a tangible commitment to trade and democracy, demonstrating that the region’s heads of state and government envision building a prosperous community of nations committed to common political values.  The governments’ representatives here at the OAS are crucial to this process because they identify and implement these common values, by consensus and with respect for the sovereign equality of states.  Both the collegial Summit process and the permanent dialogue at the OAS reinforce the sense of community, helping to ensure that regional trade benefits the community as a whole and the smaller and less developed neighbors.

 

Democracy:  Affording Access to Economic Opportunity

 

Representative democracy and the rule of law are indispensable to building modern economies, because they promote accountability, transparency, and stability and they spread economic opportunity without favor. 

 

As the people of the Americas are free to exercise their essential political freedoms, they naturally will be able to claim their fair share of economic opportunity.  Democracy is essential to any global development strategy and trade arrangement, because it empowers the individual to share the costs and the blessings of prosperity.  Unless women and men from all walks of life have a stake in our economic growth, the gap between rich and poor will widen, and genuine prosperity may prove unsustainable.

 

Trade furthers freedom by empowering the development of a vital private sector, encouraging the rule of law, spurring economic liberty, and increasing the freedom of choice among persons from all walks of life.

 

Democracy within nations and economic relations among them are served by public input into the trade negotiation process.  Civil society can make a positive contribution to the negotiation of trade agreements by making known the views of the segments of the population they represent to the negotiators.

 

 

Rule of Law:  Applying ‘The Rules of the Game,’ Fighting Corruption

 

            In modern economies, the rules of the game must be applied equally, without fear or favor.  If a government strives to deliver basic services, citizens will be more likely to pay their fair share of taxes, which strengthens a modern, efficient state that is better able to advance the whole society’s interests.  If a sound, reliable legal system exists to enforce a contract, secure capital, and protect private property (including intellectual property), commerce and investment is more likely to flourish.  In the simplest terms, while states need markets to function, markets cannot function without effective, legitimate, and law-abiding states.

 

            In 21st-century economies based on global trade and competition, the price of corruption is too high for any nation to pay.  Even excessive red tape smothers initiative, destroys jobs before they are created, and drives entrepreneurs beyond the reach of reasonable taxes or regulation.

 

            The wealthiest nations must help developing countries fight international criminal syndicates that traffic in drugs, people, and illegal arms.  Unchecked, this criminality fuels political instability, undermines democracy and the rule of law, and disrupts honest commerce.

 

Progressing as a Community

The Summit of the Americas agenda promotes free trade as part of an integral strategy to make the Hemisphere a better place to live and prosper for each nation and every person in the region.  This constructive, collective agenda assumes that we will prosper as a community.   Free trade is vital to economic growth within nations as well as among them, because trade is an engine of job-creation.  And prosperous neighbors make the entire neighborhood more stable and secure.

The free trade agenda must be part of any integrated strategy of promoting the social and material well-being of all of the nations in the Americas as well as that of the individuals from all walks of life within each nation. Indeed free trade can be a useful tool in helping disadvantaged countries to prosper and modernize.  Free trade also can be used constructively to generate economic activity to replace illicit commerce and help ensure economic stability in countries trying to apply the rule of law.

Free trade benefits individuals – making it possible for them to demand a variety of products as well as better-quality goods.  Moreover, unfettered international commerce allows even the poorest countries to strengthen their entrepreneurial class.  In short, individual freedom is bolstered in countries that accommodate consumers and nurture entrepreneurs.  Likewise, the habits of freedom begin to create the expectations of democracy and demands for fairer, more accountable government institutions.  Societies that are open to commerce across their borders are more open to democracy within their borders.  In sum, for those societies that care about these universal values that promote human dignity, trade is an ideal engine for progressive growth.

Free trade also generates higher average incomes for individuals and societies as a whole.  As countries grow wealthier, their citizens can expect to realize higher labor and environment standards.  Furthermore, governments have more resources and incentives to promote and enforce such standards.  Prosperous nations are more likely to take care of their workers. And a prosperous nation is one more likely to afford the technology necessary to protect the environment. In addition, trade arrangements can be fashioned that will promote respect for worker rights and the rights of children consistent with core labor standards and ensure that trade and environmental policies are mutually supportive, while promoting open markets.

            The OAS should be given to play an important role in strengthening the trade policy capacity of small and less developed states in the region, so that they can participate effectively in trade negotiations and implement their trade commitments.

 

            For both democracy and trade to reach their full potential, education is essential.  Enhancement of education levels better prepares citizens to participate in – and seize the benefits of – global capitalism.  Increasing education levels is also important for a country’s ability to capitalize on the information economy and quickly adapt to waves of new changes that characterize the modern global economy. The very poorest of the region know how best to improve their lives, and they must be empowered to do so through education and economic opportunity.

The private sector should be encouraged to tap into the potential of the developing world as a natural market for the future.  It should also promote partnerships with regional companies and groups to aid the economic development of the region.  These homegrown private pilot programs will identify “what works” and serve as a guide for international financial institution aid.

Conclusion

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Ministers meeting in Barbados should reaffirm that free trade helps us all adhere to values that we share – common values of democracy, human rights, and the belief in the worth of each individual.  Trade advances the interests of nations searching for a path out of poverty.   Open trade fuels the engines of economic growth that creates new jobs and new income. It applies the power of markets to the needs of the poor.  It spurs the process of economic and legal reform.  It helps dismantle protectionist bureaucracies that stifle incentive and invite corruption. And open trade reinforces the habits of liberty that sustain democracy over the long term.