LATIN American leaders are moving forward on the idea of an
Alaska-to-Argentina free-trade zone. A spate of bilateral and
multilateral commitments is being developed with the ambition of
creating a tariff-free Western hemisphere in the next three to five
years.
- The presidents of Mexico, Colombia, and Venezuela met in New
York on Sept. 30 and announced an agreement to initiate the process
toward a free-trade accord between them. This was the first meeting
of the "Group of Three."
- Last week, Brazil, Argentina, Uruguay, and Paraguay expressed
their intention to start talks immediately on a four-way free-trade
agreement. Chile was invited to join the Southern Cone accord, but
for now is pursuing bilateral free-trade agreements.
- Today Mexican President Carlos Salinas de Gortari begins a
six-nation Central and South American tour that is being billed as
laying the groundwork for freer inter-American trade.
The Salinas tour will culminate in Venezuela with the Oct. 11-13
meeting of leaders from the nine-nation "Group of Rio." One of the
aims of this gathering will be to try to establish common policies
and mechanisms for attaining an integrated free market.
"The momentum in Latin America toward freer trade has been
surprisingly strong," notes William Cline at the Institute for
International Economics in Washington, D.C.
In part, Mr. Cline sees this as a reaction to President Bush's
"Enterprise for the Americas" initiative announced in Washington on
June 27. Essentially, Mr. Bush has offered to restructure or reduce
the amount of debt owed by Latin American nations to the US
government, providing that those countries liberalize trade and
investment rules.
The response has been mostly positive. "The (Bush) initiative
represents a potentially important opportunity to increase
commercial flows and investment in Latin American and the Caribbean
overall, because it provides Latin American producers the
possibility of securing stable access to the United States market,"
says a report released this week by the United Nations' Economic
Commission for Latin America and the Caribbean.
But the Bush initiative is only one of the catalysts.
Liberalizing trade is viewed as a logical step in inflation-fighting
economic reforms, such as privatization of government assets, that
are under way in many of these countries.
Lower tariffs and easier investment laws are encouraged by the
International Monetary Fund and World Bank as means of increasing
trade in order to reduce the huge debt loads carried by many Latin
nations.
The leaders of these countries are well aware of economic
arguments that produced the 1992 European Common Market plan and the
US-Canada free-trade agreement.
Argentina and Brazil were already moving down the free-trade path
when the Bush plan was announced. Within a matter of days, the two
nations set the goal of establishing a common market between them by
1995. …
