08 Abr Challenges Of Free Trade Agreement
A better solution than protectionism is to include rules in trade agreements that protect against inconvenience. Countries can insist that foreign companies build local factories as part of the agreement. They may require these companies to become part of the technology and to train a local workforce. Environmental protection measures can prevent the destruction of natural resources and crops. Labour laws prevent poor working conditions. The World Trade Organization imposes rules on free trade agreements. The ALEA negotiations have gone through a starry history. Each summit was followed by serious financial crises in the region, which called into question the viability of the FREI trade agreements. The Miami summit was followed almost immediately by the collapse of the Mexican peso; Optimism at the Santiago Summit faded a few months later following the 1998-99 Brazilian financial crisis; And the Quebec summit was soon overshadowed by the ever-developing crisis in Argentina.
Each crisis tested the national resolve to maintain national reforms and pursue regional integration initiatives. In most cases, countries have tended to strengthen their economic reforms rather than withdraw, although Argentina and Venezuela have created some trade barriers and others have delayed privatization programmes. Free trade agreements are treaties that regulate the tariffs, taxes and tariffs that countries collect for their imports and exports. The most well-known regional trade agreement in the United States is the North American Free Trade Agreement. What are the prospects for the CETA negotiations? As trade representatives prepare for the next free trade agreement in Quito in October 2002, the unbridled optimism of the Quebec Summit seems to have given way to unbridled pessimism. This change in mood reflects three general concerns about the ALEA process: the current economic and political difficulties in Latin America are pushing some ALEA experts to project a bleak prospect of hemispheric initiatives. But similar pessimistic projections were made in 1995, when the «tequila effect» of the Mexican peso crisis infected Argentina and others in Latin America; Nevertheless, Latin American countries generally rebounded strongly in the second half of the decade and continued to deepen their economic reforms and integration initiatives. While the immediate challenges may seem frightening, the medium-term outlook remains positive for several reasons. In 2002, Thurov-style critics now aim to continue trade negotiations aimed at creating the ambitious risk of a «Free Trade Area of the Americas» (FTAA) between countries far removed from North and South America.
At the U.S. Summit in Miami in December 1994, heads of state and government pledged to negotiate a hemispheric free trade pact by 2005. After three years of preparation, the Santiago Summit officially began negotiations in April 1998. Shortly after President Bush took office, the heads of state and government reaffirmed their mandate at the Quebec City summit. Overall, the FTAA talks are on the right track, although the negotiators have not gone very far. However, last year`s positive development and the recovery of Latin American economies in 2003 are causing fragile optimism. I say fragile because many things depend on the health of the Brazilian economy and the political will of the major trading nations of North and South America to set up a free trade system for their mutual benefit. In November 2002, the United States and Brazil will co-chair the CETA talks for their duration. The two countries worked well together last year to launch the Doha Round, minimize the impact of U.S. steel protection measures on Brazilian exports and secure $30 billion in IMF financing to Brazil to help address its debt problems. I hope that they will build on these precedents to complete the FTA negotiations.