Media Center



October 5, 1998 - Nassau, Bahamas

First, I would like to thank you President McKinney and the members of the Task Force for your kind invitation. I welcome this opportunity to share ideas on the FTAA and the wider Summit of the Americas Process, and what these processes that are occupying so much of the attention of the governments of the region mean for the private sector. Your importance as actors in this process cannot be sufficiently underscored. Thank you for your very warm welcome.

Three years after the Miami Summit, and based on its mandates in the trade area, the San Jose Ministerial gave us a clear blueprint and Plan of Action as to what to negotiate and how to do it. This April, the Santiago Summit reiterated the general vision, launched the FTAA negotiations, and consolidated mandates in other key areas of hemispheric cooperation. And only a few days ago, eight of the nine negotiating groups concluded their first set of meetings in Miami. The Advisory Group on Smaller Economies and the special committees on electronic commerce and civil society will meet over the next two weeks.

The negotiating groups all had a solid foundation from which to begin their work, the result of the incredible amount of technical analysis that had been accomplished during the preparatory phase with the assistance of the OAS and its colleague institutions on the Tripartite Committee. The focus of all the groups in these first meetings was to agree on substantively driven work programmes between now and the next Trade Ministerial, which is scheduled for Canada in the fall of 1999. Some groups were successful in going beyond this and concluded some valuable substantive discussions, even if only in a preliminary manner.

The Market Access Negotiating Group, for example, succeeded in sketching out a serious work programme that addresses the main issues of tariffs, non-tariff barriers, rules of origin and customs procedures, safeguards, and standards and technical barriers to trade.

The Agriculture Negotiating Group is a new group, although agricultural issues had been discussed during the preparatory process in the Working Group on Subsidies, Anti-Dumping and Countervailing Duties. This Group struggled successfully with determining the appropriate demarcation between themselves and the Negotiating Group on Market access.

The Services Negotiating Group is continuing where the preparatory Working Group left off. The Group is working off an "essential issues" framework established at the last meeting of the then preparatory Working Group on Services.

The Investment Negotiating Group agreed on a detailed work plan and methodology to organise their work that will develop a comprehensive framework incorporating rights and obligations on investment. The Group also noted that it was important to maintain close coordination with the Negotiating Groups on Services, Intellectual Property, and Dispute Settlement.

The Negotiating Group on Subsidies, Anti-Dumping and Countervailing Duties exchanged opinions on the organisation of their work and agreed to fully develop their work programme by the next meeting. Negotiators agreed to present items to be discussed by the Group to the Chair by the first week of December. This Group also examined its relationship with other negotiating groups, particularly, the Groups on Competition Policy, Market Access, Agriculture, and Investment.

The Negotiating Group on Competition Policy also devised an ambitious work plan and commenced preliminary consideration of a study, prepared by ECLAC, on possible relations between the Negotiating Group on Competition Policy and other FTAA Negotiating Groups, with emphasis on the linkage between trade policy and competition policy. The Negotiating Groups on Competition Policy and Subsidies, Anti-Dumping and Countervailing Duties agreed to meet consecutively to facilitate exchange of information.

The Negotiating Groups on Government Procurement and Dispute Settlement also made good progress in charting the course of their work and framing the many issues to be raised in the context of the negotiations.

These first meetings ran relatively smoothly. The Chairs of the various negotiating groups, often with Tripartite Committee assistance, had carefully considered their approaches to the issues and the strategies for realising their objectives. Most had consulted extensively with other countries and with the Tripartite Committee. Also, many governments had used the six months between the San Jose Ministerial in March and the start of the negotiations to engage in consultations with their business sectors and other sectors of civil society before arriving in Miami. This allowed them to approach the negotiations with a clearer vision of what they wanted. Without a doubt, this first round and successive rounds of negotiations constitute an extraordinary effort of political will.

Yet, the FTAA process will confront many challenges from global, regional, and national economic and political factors, along the way to realisation of hemispheric free trade. I will simply note some of these challenges and, perhaps, we can delve into them further during our discussions.

The most important factors that the FTAA negotiations must overcome are the lack of Afast track@ negotiating authority in the U.S.; the unclear scope of WTO trade talks scheduled to begin in 2000; the similarly unclear scope of other ongoing and planned sub-regional, inter-regional, and bilateral negotiations; and the policy responses of Latin American and Caribbean countries to the Asian/Russian financial crises.

First, Afast track@ negotiating authority for the U.S. Executive Branch has both a symbolic and real impact on trade negotiations. Symbolically, Afast track@ demonstrates U.S. public support for trade liberalising negotiations. In real terms, it ensures foreign governments that they will not have to renegotiate with the U.S. Congress the agreements struck with the U.S. Executive Branch. For both these reasons, passage of Afast track@ legislation in the U.S. is necessary, albeit not sufficient, for the progress of the FTAA negotiations at a satisfactory pace.

Second, multilateral trade talks and ongoing sub-regional and bilateral negotiations will affect the FTAA process. In the case of the WTO, if new trade talks, whatever their scope, develop at a slow pace, the FTAA may get a boost. If the new round of negotiations is fully engaged, however, the talks could make it harder to sustain governmental and business interest in the FTAA. This is a real concern, especially for Latin American and Caribbean nations, which have very limited human and financial negotiating resources.

Third, we also need to think about what the relationship will be between the FTAA and the existing sub-regional agreements. The FTAA must somehow bring together the economies of the Americas under a single agreement while preserving, in some form, existing alliances. Sub-regional deepening and widening is one way of advancing hemispheric integration. However, this approach has its risks. Countries will need to mitigate these risks by negotiating bilateral and sub-regional treaties with mutually consistent rules and standards.

EU Trade policy toward the region also could take its toll. The EU has been actively seeking negotiations with several countries and sub-regions of this Hemisphere. For regions such as MERCOSUR, which have a high proportion of their trade with the EU, these negotiations are a high priority. As a practical matter, if those negotiations are real and intense, then the pressure and capacity to fully engage in hemispheric talks will not be present. Furthermore, engagement with the EU could be stimulated by a protracted absence of Afast track@ authority in the United States.

Finally, global economic conditions certainly will influence the pace of the FTAA process. Unfortunately, the transition of the FTAA to the negotiations phase is occurring just as the Asian/Russian financial crisis is providing fuel to critics of globalisation. If the deterioration of economic conditions in Asia and the Russian Federation aggravate and exert a contagion effect on other regions of the world and on the American economy, Western Hemisphere economic and trade priorities could be affected, including the possibility that the FTAA negotiations reduce their priority in the national agendas of some of the most important actors. Severe macroeconomic difficulties will make it hard to move beyond the status quo, or at least "lock-in" the progress of the last ten years through a hemispheric accord. When people feel pain but see no gain, a backlash is always a danger.

This brings us to the need for support for the entire Summit process. Just as governments and their private sectors should support the FTAA, it is also vital that they get behind the mutually-reinforcing Summit initiatives aimed at strengthening democracy, protecting the environment, reducing poverty, eliminating corruption, ensuring labor rights, and stopping the flow of narcotics. National publics must see the capacity of countries to benefit from free and open economies with strong institutions. As I have said on other occasions, the trade agenda cannot advance unless we understand the combination of economic, social and political forces needed to make integration a concrete reality.

Yes, the challenges are many. But this does not mean there is no cause for optimism. In fact, there are very important benefits to be derived from the FTAA talks.

1. First, the FTAA talks help to give both a sense of direction, and a sense of urgency to policy reform. The shared objectives in all different negotiating areas provide a strategic orientation for all countries and have a positive feedback on national priorities.

2. Second, through this process, more than 800 trade officials are involved in a continuing dialogue. For many countries, this increased communication and trust among trade officials, plus the technical assistance provided in support of the process, amounts to a major programme for trade and regulatory reform under common principles and standards.

3. Third, the FTAA talks are reinforcing the political will and motivation of countries to deepen and widen their sub-regional integration arrangements.

4. Fourth, the FTAA process is producing greater transparency and mutual self-awareness about barriers to trade and investment among the participating countries, including pressure to ensure timely implementation of WTO commitments.

5. Fifth, the FTAA has been increasingly capturing the interest of many sectors of civil society and developing an ever widening base of support for the FTAA and for the Hemispheric vision and objectives.

6. Finally, but certainly not least, the enthusiastic engagement of important segments of the business communities of all countries through the Business Fora of the Americas and innumerable other activities generated by the FTAA is improving business networking and helping to identify and exploit new trade and investment opportunities.

I look forward to discussing these and other issues with you. Thank you.