This Friday, November 1, Trade Ministers from the 34 democracies participating in the Free Trade Area of the Americas (FTAA) process will meet in Quito, Ecuador to advance the negotiations into the phase of specific, concrete bargaining.
Presenting on the topic *”Trading In Freedom: The New Endeavor Of The Americas”* at the recent Miami Herald-sponsored Americas Conference, U.S. Trade Representative Robert B. Zoellick took the opportunity to report on U.S. objectives for the upcoming meeting.
Next month, the United States and Brazil will assume co-chairmanship of the final phase of the Free Trade Area of the Americas (FTAA) negotiations, aiming by January 2005 to reach agreement on creating a single free trade zone stretching from Alaska to Argentina.
This August, the U.S. Congress passed the Trade Act of 2002, regaining Trade Promotion Authority; effectively the administration can bring trade agreements to Congress without amendment. This trade promotion authority also impels new momentum toward the agreed goal of completing the Free Trade Area of the Americas by 2005.
Quoting former President Reagan, Mr. Zoellick said the United States *”looks to a day when the free flow of trade, from the tip of Tierra del Fuego to the Arctic Circle, unites the people of the Western Hemisphere in a bond of mutually beneficial exchange, when all borders become what the U.S.-Canadian border so long has been: a meeting place rather than a dividing line.”*
He said, further, that the United States wants to negotiate with all the democracies of the Americas through the FTAA, but also is prepared to move step-by-step toward free trade if others turn back or simply are not yet ready.
The FTAA initiative is the largest regional integration effort ever undertaken, involving both developed and developing countries. Its objective is to realise free trade and investment in goods and services, allowing large and small nations to compete on an equal basis. A fully implemented FTAA would constitute the largest free trade arrangement in history, uniting nations with a combined GDP of more than $13 trillion and a market of some 800 million people.
Nine FTAA Negotiating Groups are in place, with all countries participating in the process represented on each group. Additionally, three special committees have been established to review and consider (a) the special issues relating to smaller economies; (b) the implications of e-commerce; and (c) and to ensure that the views of civil society are fully considered and included in the process. A Trade Negotiations Committee (TNC) coordinates the overall work of these groups.
The United States will be seeking to achieve seven objectives in Quito:
(a) the launch of a Hemispheric Cooperation Program so that smaller, developing nations – especially in the Caribbean and Central America – have the capacity to participate in and benefit from the free trade negotiations.
(b) the establishment of firm schedules for the negotiations to open markets in each participant.
(c) the negotiation of tariffs downward from applied rates, not WTO bound rates. Tariff reductions would be based on the reality of current trade patterns rather than the legally allowed, highest-case scenario.
(d) the establishment of chairs for the nine negotiating groups and three related committees, so that leaders will press the work forward.
(e) the presentation to the public of the revised negotiating text, a practice began last year in Buenos Aires. (enhances the transparency of the FTAA process).
(f) the engagement of groups from civil society on the FTAA project.
(g) listening and learning from representatives of private enterprise at the Americas Business Forum.
(h) as the United States and Brazil are scheduled to serve as co-chairs of the negotiations from Quito to the conclusion, the United States will offer to host the next ministerial meeting in 2003.
With regard to (a) above, the United States has said its aim is to ensure smaller countries have the support to negotiate complex subjects, the ability to implement the final agreement, and the help to make the necessary structural adjustments that will be part of creating an effective free trade area. And, on the Americas Business Forum, Mr. Zoellick said, *”The FTAA can only be an enabling framework within which the genius of entrepreneurs, the commitments of investors, and the energy of growing businesses create jobs, growth, and hope for the peoples of the Americas.”*
Speaking at the same conference was Otto J. Reich, Assistant Secretary, Bureau of Western Hemisphere Affairs in the US Department of State. He said freer trade has long been a centerpiece of U.S. policy in the Americas, not only to boost economic growth but also to strengthen the ties that unite the region’s 34 democracies. *”There is a fundamental and mutually supporting dynamic between political and economic freedom,”* he said.
**Bahamas Consultative Process**
The Government of The Bahamas is committed to holding on-going consultations with the private sector on matters relating to trade liberalisation and globalisation. Speaking at a recent seminar, the Hon. Leslie Miller, Minister of Trade Industry & Commerce, said *”Consultation with the various sectors of the economy is essential in order to develop the best position for the Bahamas in both the FTAA and WTO trade negotiations process.”*
The Government has put in place a mechanism to ensure that the private sector input is taken into account on these initiatives. To expedite the process of creating a consistent and effective consultative machinery, the Government established the Sectoral Trade Consultative Groups (STCG) comprising the sectoral groupings of the economy to ensure that no significant economic will be overlooked in the consultative process. These sectors include Agriculture & Fisheries, Distribution & Business Service, Financial Services, Tourism, Light Industries, Labour, Freeport (a special group to advise on the issues of concerns of the Freeport Free Trade Zone) and Communications (media representation) and a Proposed Bar/Private Sector Group.
The Prime Minister also has announced the pending establishment of a special Commission on Trade Liberalisation, with public/private sector co-chairs.
The Hon. James Smith, Minister of State in the Ministry of Finance, has said that for The Bahamas, acceptance of the rules and regulations that are likely to emerge from an FTAA agreement could mean a reformation of domestic laws and practices aimed at eliminating any governmental measures that prevent services from being freely and uniformly provided within its borders by any of its hemispheric partners.
In the areas of Tourism and Financial Services, these impositions should not present an insurmountable challenge to the country simply because it already has in place liberalised policies as they relate to the movement of capital inward. Well-established internationally owned tourism and banking institutions have been established in The Bahamas since the 1940s. Moreover, the existing regime of investment incentive legislation in the services, industrial and manufacturing sectors is already very accommodating towards foreign direct investment and local investment. Indeed, he said, investors in these sectors are guaranteed tax holidays and other forms of public sector assistance programs in order to encourage capital inflows and expand job-creation opportunities.
A large delegation from the Bahamian private sector has travelled to Quito, to participate in the Americas Business Forum immediately preceding the Ministerial meetings. Input from the Forum’s private sector delegates has become an integral part of the FTAA process.
The Bahamas will be represented at the Ministerial level discussions by the Hon. Leslie Miller.