I am very pleased to be here at Georgetown today, to take up with the seminar participants a topic at the heart of our relations with our neighbors in the Western Hemisphere: the promotion of the rule of law, and the part our negotiations toward the Free Trade Area of the Americas (FTAA) can play in it.
In one sense, the relevance of the FTAA to the rule of law is quite simple. The nine FTAA Negotiating Groups in Miami address topics from market access to competition policy; subsidies, anti-dumping and countervailing duties, intellectual property, government procurement, investment, agriculture, and services. The result in each case will be a set of rules accepted through democratic decisions by the elected governments of the participating nations, enforceable by a transparent and binding dispute settlement procedure--all indicators of the rule of law.
But we can also go a bit deeper. The FTAA is both the result of and a contributor to a broader shift in the hemisphere. And we can begin to understand this shift by asking the basic question: why have we embarked on this effort? To this there are three mutually supporting answers. The first two of them are permanent facts of life.
One is geography. The countries of the Western Hemisphere are our neighbors. They will always be our neighbors. And it is plainly in our national interest to have the best possible trade relationship with our neighbors.
The other is the interest of our citizens. The Western Hemisphere is our largest and fastest-growing market and we are the largest and fastest-growing market for our neighbors. Broadening and deepening this trade relationship will help working people, firms, farmers, ranchers, and service providers everywhere to find new opportunities.
These are enduring, permanent realities. And so it should come as no surprise to find that our generation is not the first to come up with the idea of a hemisphere free trade agreement.
The Liberal vision shared by the leaders of Latin America's independence movements implied precisely such a step. Simon Bolivar himself was the first American leader to propose a hemispheric trade conference. And the idea, in one form or another, was revived on several subsequent occasions. Benito Juarez proposed a free trade agreement between the United States and Mexico in the 1850s. U.S. Secretary of State James Blaine actually convened a hemispheric conference in Washington, whose goal was hemispheric free trade.
But all of their efforts failed. And they failed neither because our predecessors were incompetent--they obviously were nothing of the kind--nor because of the complexity of the task. The trade agreement in 1889, when the only issues were customs procedures and tariffs on agricultural products and manufactured goods, would in technical terms have been far easier than the task before the nine Negotiating Groups in 1998. Rather, they failed because of barriers of perception and ideas--and as Jose Marti said after Blaine's conference, "[b]arriers of ideas are stronger than barricades of stone."
Barriers of Ideas
One aspect of this was a set of mutually destructive perceptions. Americans often looked south and saw only caudillos, guerillas, and opportunistic politicians denouncing the Yanqui to mask corruption and repression at home. Latin American intellectuals often looked north and saw only an interfering, hegemonic power.
A second, equally profound aspect was that created by a vision, held for many years in many countries, of the role of the state and law in economic development. The Peruvian economist Hernando de Soto describes it by borrowing the term "mercantilism" from trade policy:
A politically administered economy in which economic agents were subject to
specific, detailed regulation. The mercantilist state did not let consumers
decide what should be produced; it reserved to itself the right to single
out and promote whichever economic activities it considered desirable, and
to prohibit or discourage those which it considered inappropriate. …