Trading Up? the Uncertain Future of the FTAA

Article excerpt

The dream of free trade in the Western Hemisphere suffered yet another blow on November 6, 2005, as the Fourth Summit of the Americas in Mar del Plata, Argentina concluded with no progress for the Free Trade Area of the Americas (FTAA) agreement. Venezuelan President Hugo Chavez, a vocal opponent of the United States, proclaimed the agreement dead, and many of his colleagues in the region tacitly agreed. Even US President George W. Bush conceded that the FTAA had taken a backseat to the more pressing matter of the December 2005 World Trade Organization (WTO) talks in Hong Kong. Hostile public opinion, supported by government resistance to FTAA policies and US-led free trade policies in general, was the main reason behind the failure of the FTAA.

As early as June 1990, President Bush proposed the goal of ensuring hemispheric free trade by the year 2000. In pursuit of that vision, the FTAA began in 1994 with the first Summit of the Americas in Miami. The declaration that resulted from the summit called for the completion by 2005 of negotiations to implement a hemisphere-wide free-trade zone. In 1998 formal negotiations began in a second Summit of the Americas in Santiago, Chile. Though minister-level meetings moved the process along, progress did not come smoothly. At the third summit in Quebec City in 2001, the FTAA came to the forefront of media coverage amid massive protests against globalization and the practices of multinational corporations.

What changed between 1994 and 2005? The political climates within member nations have started to turn against free trade. In the United States, 11 years after the implementation of the North American Free Trade Agreement, public opinion has shifted to a more protectionist stance. Interest groups such as labor unions and farm lobbies undertook tremendous efforts to block the passage of the Central American Free Trade Agreement, which passed in July 2005 by only two votes in the US House of Representatives. Many Americans support free trade in principle but disapproved of the specific policies the US government was pursuing. A study by the Program on International Policy Attitudes polling 18,000 people across 19 countries showed that 56 percent of people supported the concept of increasing global trade but disagreed with the handling of specific consequences of trade, such as unemployment, the plight of the poor in other countries, and effects on the environment.

While increased hostility toward trade in the United States has made President Bush's goals harder to attain, it has not scuttled the FTAA entirely. Latin American nations, many of which have resorted to outright protectionism, have affected the viability of the FTAA the most. …