The new administration should give immediate attention to the signed, but as yet unratified, Colombia and Panama free trade agreements.
Hemisphere-wide free trade should be a critical long-term goal for the United States and other nations of the Americas, but not much progress is likely until the global economic crisis abates. There is just not much enthusiasm at this point, either in the United States or most of Latin America, for new regional free trade talks. Washington should now concentrate on completing the unfinished agenda left by President George W. Bush
The new administration should give immediate attention to the signed, but as yet unratified, Colombia and Panama free trade agreements. If it decides to ignore them or defer action into the indefinite future, the United States would widely and justifiably be seen as backtracking on its commitments to the two countries. Securing ratification of agreements (which in the case of Colombia will require negotiation of an amendment or side accord on human rights) would help to reassure Latin American governments that Washington is a reliable commercial partner and a credible ally. In large part, the Colombia accord has been a casualty of the partisan rancor in U.S. politics. Its approval now would show that the Obama government is committed to working across those divisions. It would also make clear that the new administration is prepared to honor trade arrangements that it has agreed to.
MITIGATE FREE TRADE
In recent years, public support for free trade has diminished sharply in the United States and in many other countries in the Americas; it is almost certain to drop further in the face of economic recession. There is little prospect for significant new trade agreements until ordinary citizens in the United States and across the hemisphere regain their confidence that these agreement do, in fact, boost growth, increase employment, and raise living standards—not push down wages and
send jobs elsewhere. It is crucial that Washington and other governments do more to mitigate the severe dislocations that free trade can produce. The United States recently took a major step in this direction by making public employees and service workers eligible for trade adjustment assistance (which had previously been limited to manufacturing workers) and increasing access to training programs and health care. Increasing the economic security of us workers is the basis for building any bipartisan coalition for freer trade.
The new administration should make it clear to Mexico and Canada that, campaign rhetoric aside, it will fully comply with U.S. commitments under the NAFTA agreement. Realistically, however, there are some provisions that will not be able to gain needed congressional approval, such as allowing Mexican-owned trucks (even if they satisfy requisite safety standards) to haul goods into the United States. Washington should generally make sure it does not place any new barriers on imports from Latin America, particularly during this economically troubled period.
The United States should reinstate trade preferences for Bolivia, which were discontinued following the Bolivian government’s expulsion of the U.S. ambassador and its suspension of the U.S. counternarcotics program in the country. Bolivia’s actions may have demanded a response from Washington. But ending the trade preferences, which could eliminate upwards of 100,000 jobs in Bolivia, was viewed as too harsh a penalty by most Latin American governments. By reversing the decision, a step endorsed by many in the U.S. Congress, the new administration would signal its interest in improving ties with Bolivia, despite the tensions between the two countries.
Agreement at the Doha Round of multilateral trade negotiations would advance the economic interests of the United States and Latin America far more than the array of bilateral trade deals that Washington has pursued in recent years. Prospects for Doha’s success any time soon are limited, however. For several years, the world’s major trading countries have been unable to find common ground on the key issues, and now the protectionist temptation is emerging in many countries, as the global economic crisis slows growth across the world. Still, the United
States should continue to try to find agreement with Brazil on a negotiating formula that would be acceptable to other participating nations. Brazil is now one of the most influential participants in the Doha talks and shares many U.S. objectives, including the curtailment of export subsidies and trade-distorting internal supports to agricultural producers. By eliminating critical stumbling blocks that have frustrated regional negotiations, a breakthrough in Doha on agriculture could facilitate U.S.-Brazilian bilateral trade discussions and perhaps set the stage for reviving hemispheric trade talks.
This column is excerpted from “A Second Chance: U.S. Policy In The Americas” published by the Inter-American Dialogue. Republished with permission.