Free Trade Area of the Americas (FTAA)

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Free Trade Area of the Americas (FTAA)

In 1994 the United States hosted a Summit of the Americas in Miami, Florida, and proposed the negotiation of a Free Trade Area of the Americas (FTAA) that would include all thirty-four democratically elected countries in the Western Hemisphere. The FTAA negotiations were formally launched in 1998, a 2005 completion date was set, and nine negotiating groups were created for issues ranging from market access to services, investment, and competition policy. Despite outward efforts to complete the FTAA on time, the 2005 deadline has long passed and the negotiations remain stalled.

What went wrong? The United States had proposed the FTAA, but after the launching of the North American Free Trade Agreement (NAFTA) and the conclusion of the eight-year Uruguay Round negotiations in 1994, the Clinton administration faced mounting opposition to further trade liberalization within its own Democratic Party. The collapse of the World Trade Organization's (WTO) Seattle Trade Ministerial in November 1999 amid violent protests, and Clinton's continued failure to obtain the necessary trade negotiating authority from the U.S. Congress, are partial explanations of the limbo into which the FTAA fell.

For the South American countries of Argentina, Brazil, Paraguay, and Uruguay, the FTAA was eclipsed by internal conflicts specific to their own subregional integration project (Mercosur) and by the onset of various macroeconomic and political crises in the late 1990s. Mexico had quietly shunned the FTAA, as it had little incentive to share its newly won access to the U.S. market under NAFTA; countries such as Canada and Chile voiced a commitment to the FTAA while also compensating for the lapse of U.S. leadership under Clinton by signing bilateral free trade agreements with regional partners.

The FTAA process gained traction when the newly elected Bush administration took the helm of U.S. trade policy. In August 2002 President George W. Bush obtained the "fast track" negotiating authority (later called Trade Promotion Authority, or TPA), which allows the executive to send a trade bill to the U.S. Congress for an up or down vote with no amendments. The Bush team now had the credibility to proceed with the new multilateral round of trade negotiations that had been launched in Doha, Qatar, in 2001. It simultaneously pursued a "competitive negotiations" strategy based on the negotiation of bilateral free trade agreements with a broad geographical range of countries (including Singapore, Chile, Australia, and Bahrain).

Prior to the adoption of this new U.S. strategy, the Latin American countries had perceived the FTAA as the fastest way to secure greater access to the U.S. market. Yet the new U.S. policy of negotiating bilateral free trade agreements in tandem with the FTAA sent countries such as Colombia, Panama, and Peru scrambling to negotiate bilaterally with the United States. By the time of the 2003 FTAA ministerial meeting in Miami, the U.S. competitive negotiating strategy, along with severe conflicts between the United States and Brazil over the content and pace of the FTAA negotiating agenda, had basically taken the wind out of the FTAA's sails.

See alsoLatin American Free Trade Association (LAFTA); Mercosur; North American Free Trade Agreement.

BIBLIOGRAPHY

Destler, I. M. "The United States and a Free Trade Area of the Americas: A Political-Economic Analysis." In Integrating the Americas: FTAA and Beyond, edited by Antoni Estevadeordal et al. Cambridge, MA: Harvard University Press, 2004.

Fishlow, Albert. "Brazil: FTA or FTAA or WTO?" In Free Trade Agreements: US Strategies and Priorities, edited by Jeffrey J. Schott. Washington, DC: Institute for International Economics, 2004.

Masi, Fernando, and Carol Wise. "Negotiating the FTAA between the Main Players: The U.S. and MERCOSUR." In MERCOSUR and the Creation of the Free Trade Area of the Americas, edited by Marcel Vaillant and Fernando Lorenzo. Washington, DC: Woodrow Wilson Center for International Scholars, 2005.

Salazar, José Manuel, and Maryse Robert, eds. Toward Free Trade in the Americas. Washington, DC: Brookings Institution, 2001.

Zabludovsky, Jaime, and Sergio Gómez Lora. "Beyond the FTAA: Perspectives for Hemispheric Integration." In Requiem or Revival? The Promise of North American Integration, edited by Isabel Studer and Carol Wise. Washington, DC: Brookings Institution, 2007.

                                          Carol Wise