Foreign Policy in Focus

Free Trade Area of the Americas
By Karen Hansen-Kuhn, The Development GAP

Key Points
· President Bush seeks to fulfill his father's dream of creating a free Trade Zone of the Americas and the timetable may be accelerated to complete negotiations by 2003.
· The economic crisis in Mexico and sustained citizen's protests have dampened enthusiasm among the general public, but not among major corporations in the United States, for the extension of Free Trade agreements throughout the hemisphere.
· Nine negotiating groups have been working to complete a draft agreement to implement the Free Trade Area of the Americas (FTAA)

Key Problems
· The US government is promoting an approach to the FTAA based in large part on the NAFTA, despite the failure of that accord to raise living standards.
· Proposals for an "investor-state" clause in the FTAA would give investors the power to challenge national and local laws
· The USTR id promoting a significant expansion of trade in services, leading potentially to the privatization of such public services as health and education

Key Recommendations
· Trade negotiations should be opened up to include a broader representation of society
· Labor, environmental, and other relevant social issues should be included in the negotiation of trade agreements
· Investment policy should balance investor's needs for clear rules with the regulating needs of each country's development strategy .