President Leonel Fernández signed along with 33 leaders of the Americas the action plan to create the world’s largest free trade zone stretching from Alaska to Patagonia by 2005 and uniting 800 million people and economies worth $10 trillion. The Free Trade Area of the Americas would be more than double the size of the 15-nation European Union – the EU’s total population is 370 million. Leaders from 34 American nations also agreed in Chile to broaden the regional fight against drugs and to attack poverty. The leaders of the Americas, with the exception of the uninvited Cuba, drafted a plan to improve judiciary and human rights, fight drug trafficking and combat the poverty that plagues Latin America despite years of strong economic growth and low inflation. Officials said international lending agencies will spend $40 billion on reducing poverty, which affects 40 percent of Latin Americans, over the next three years. This is nearly double the amount spent since 1995. The final Declaration of Santiago said, “We believe that economic integration, investment and free trade are key factors for raising standards of living, improving working conditions and better protecting the environment.” "Overcoming poverty continues to be the greatest challenge confronted by our hemisphere. We are conscious that the positive growth shown in the Americas in past years has yet to resolve the problems of inequity and social exclusion.” Forging ahead for a free Latin American & Caribbean free trade agreementThe Declaration of Santiago commits countries to establish the Free Trade Area of the Americas (FTAA) by no later than 2005. Latin America has gotten a head’s start on the idea for continental free trade that was first launched by the U.S. Government in 1990 and promoted at the First Summit of the Americas in 1994. The United States has stalled in expanding the North American Free Trade Agreement (NAFTA) beyond its current partners Canada and Mexico. Chile was supposed to be become the fourth NAFTA nation at this summit. Chilean Foreign Minister Jose Miguel Insulza praised Canadian Prime Minister Jean Chretien for forging free trade and investment accords with it and other nations in the region. “On the basis of this type of policy, prime minister Chretien has been taking a leadership role when compared to others,” Insulza said, obviously referring to the United States. Latin American states have picked up the free trade baton from the U.S. Government given that the U.S. Congress has opposed granting the President the rights to negotiate. Today, Latin American countries may forge ahead with a free trade agreement without the United States, the largest trading partner of the Americas. Already, Latin Americans have signed initiatives to link Central American and Andean nations to the increasingly powerful Mercosur customs union comprising Brazil, Argentina, Uruguay and Paraguay. Next year Mercosur will start trade talks with the European Union. The four-nation Mercosur South American trade bloc, grouping Argentina, Brazil, Uruguay and Paraguay, has a 204 million population and a combined economy of more than $1.0 trillion. The Andean trade minister deal with Mercosur establishes a framework for negotiations to create a free trade zone by Jan. 1, 2000. The agreement replaces older bilateral accords between the Andean and Mercosur countries. While the United States has stalled in expanding NAFTA, Mercosur has moved aggressively to add partner after partner. Mercosur already has free trade deals with Chile and Bolivia and is involved in tough negotiations with Mexico. Mercosur signed a framework free trade agreement with the Central American Common Market, whose members are Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica, in Santiago on Sunday. The Dominican Republic integrates with this agreement through its free trade agreement with Central America signed in Santo Domingo on 16 April 1998. President Fernando Enrique Cardoso of Brazil will visit the Dominican Republic this year when significant advances on trade negotiations on behalf of the Dominican Republic and Mercosur are expected to be made. Fast track neededPresident Clinton needs to persuade Congress to grant him the special "fast track" authority he needs to ensure trade deals cannot be amended. Congress denied him fast track last year after organized labor and environmentalists, on whom Democrats rely heavily for financial and political support, lobbied strongly against it. Back in 1994, it was felt that it would have been Latin American countries which would individually seek admission to the North American Free Trade Agreement. Three and a half years after, the U.S. Presidency has failed to achieve fast track in Congress and thus Latin American governments will not negotiate with the U.S. Government regardless that the US$7 trillion US economy continues to be the largest trading partner and largest investor of the region. In an interview with Latin American newspapers published Thursday, Clinton said he was still committed to guaranteeing "fast track" legislation. "I trust Congress will have the sense to authorize me to knock down trade barriers, open up markets and create more jobs," said Clinton. Fast track would enable Congress to vote for or against a finished agreement, but not allow it to make amendments that could force the re negotiation of parts of the deal. Cuba to integrate with the AmericasIn other interesting developments, Foreign Minister Jose Miguel Insulza of Chile said on Saturday that it will study soon the chance of signing a trade accord with Cuba, the only nation not invited to the second Summit of the Americas. During the Summit, Canadian Prime Minister Jean Chretien said he planned to visit Cuba soon to meet President Fidel Castro this year. Moreover, President Leonel Fernández said that President Fidel Castro is invited to the Dominican Republic to attend together with Rene Preval of Haiti and the Caricom Community nations a Caribbean Summit. During the Summit, the Dominican Republic is expected to sign a free trade agreement with the English speaking Caribbean. Cuba has not been invited to take part in the negotiations, but given the tardiness in the U.S. trade negotiations, it is possible it may have achieved free trade status with the Americas prior to the U.S. joining the bloc. More money for educationDuring the Summit, a three-year, $6 billion program of World Bank and Inter-American Development Bank (IADB) loans aimed at expanding primary education to all children in the region and secondary education to 75 percent by 2010 was publicized. An estimated 175 million Latin Americans, or 40 percent of the population, earn less than $2 a day and fall within the World Bank definition of poor. The IADB said this was not new money but a shuffling of priorities to pump more money into schooling. According to the World Bank, 86 percent of children in Latin America and the Caribbean attend primary school but only 36 percent attend secondary school. While industrialized countries spend an average of $4,300 per year per student, Latin America spends only $250. What’s nextAs a follow-up to the Santiago summit meeting, nine working groups will discuss market access, investment, services, government procurement, dispute settlement, agriculture, property rights, subsidies, anti-dumping and countervailing duties and competition policy. 1998 April 20, 1998-Oct. 31, 1999 – Canada to continue to chair the FTAA process. 1999 May 1, 1999-Feb 28, 2001 – Miami to host negotiating group meetings. Nov 1, 1999-April 20, 2001 – Argentina to chair the FTAA process. 2001 March 1, 2001-Feb 28, 2003 – Panama City to host negotiating group meetings. May 1, 2001-Oct 31, 2002 – Ecuador to chair the FTAA process 2002 Nov 1, 2002-to FTAA signing – United States and Brazil to co-chair the FTAA process. 2003 March 1, 2003-to FTAA signing – Mexico City to host negotiating group meetings. 2005 Signing of the free trade agreement of the Americas.
