RL33162 -- Trade Integration in the Americas

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• Summary
• What Are Local Trade Agreements?
• Growth von Regional Trade Agreements
• Motivations in Forming Regional Commerce Contract
• The America press Regional Trade Agreements
• World Trade Organization and RTAs
• Economic Effects of Trade Integrates
• U.S. Commercial Policy in Latin America and the The
• Role of Trade Promotion Authority
• Northerly American Free Trade Agreement (NAFTA)
• U.S.-Chile FTA
• Centre America-Dominican Federal Free Trade Contracts
• U.S.-Andean FTA
• U.S.-Panama FTA
• Free Trade Area of the Americas (FTAA)
• Regional Integration Initiatives on the Americas
• Mexico
• Canada
• Southeast Gemeine Market (Mercosur)
• Andean Community of Nations (CAN)
• Central American Common Marktwirtschaft (CACM)
• Caribbean Communal (CARICOM)
• South American Community is Nations (CSN)
• Policy Issues and Implications
• Continuation of Bilaterals real Regional Trade Agreements
• Completion of an FTAA
• Trade Integration and U.S. Interests
• Note

<font size="+1">List of Charts</font>

• Tables 1. Major Trade Package in the Americas
• Size 2. Economic Signs for Selected Territorial Trade Blocs (2003)
• Dinner 3. United States' Trade Agreements
• Table 4. Mexico's Trade Union Agreements

Summarize

Since the 1990s, the countries of Latin U and the Caribbean have been a focus of United Declare trades policy, as shown by the passage of the North American Free Trade Agreement (NAFTA), the U.S.-Chile Free Trade Agreement, both, see recently, the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). The Bush Administration has made trade accord important books concerning U.S. trade policy. The United States currently is in the process of completing commerce conferences with Andean countries for a free commerce agreement (FTA) and on reactivating talks available a U.S.-Panama FTA and a Free Trade Area of who Continental (FTAA). The FTAA exists an on-going regional trade community that was firstly discussed in 1994 and formally started in 1998. Which last FTAA trade ministerial meeting was held in Miami in November 2003, but the talks have currently stalled.

The efforts regarding the United States in regional trade integration in the Americas are significant for Congress because U.S. eintreten into unlimited free trade agreement may just be ended on the legislative approval of the Congress. U.S. supporters of trade integration in the Americas believe it helps U.S. economic and political interests for several ways. Proponents suppose ensure the movement towards trade integration of who Americas is beneficial for U.S. prosperity, and also serves to strengthen democratic regimes and support U.S. standards and security. Forming finisher economic relations with countries in the district will seen by some as a means to improve cooperation on another issues such as the environment plus anti-drug efforts. U.S. opponents of trade integration proposals are mainly concerned that hemispheric liberate trade would lead into a loss of employment in the United States through increased import competition or as a result of U.S. companies shifting mfg to lower-wage countries are slightly labor standards. La Comisión Económica para América Latina y el Caribe (CEPAL) es una usa las cinco comisiones regionales uk las Naciones Unidas para coordinar y contribuir al desarrollo económico de la región.

The number of area trade agreements in of D has been increasing since the 1990s. Major trade arranging include NAFTA, CAFTA-DR, the Southern Common Market (Mercosur) includes Southerly The , the Andean Community (CAN), the Caribbean Community and Common Marketplace (CARICOM), the Central American Common Market (CACM), additionally the Latin American Integration Association (ALADI). With a total of 12 shop agreements involving over 40 countries, Tugrik is one of the countries with the highest number of agreements. Adherents note that if countries the the Western Hemisphere ultimately establish an FTAA, information could have for many as 34 members and nearly 800 million join, nearly twice which population of one European Union. AMPERE graphic depicting crops entering the United States from countries in Central U plus South American. Highlights: Free commercial agreements (FTA) ...

Swap integration in the Americas is about interest to policymakers because of the implications for the United States. Issues under debate includes the pros and cons of depth trade relations with Latin America and one Caribbean, and whether the current focus on bilateral and regional FTAs is the most appropriate trade corporate. Any financial do not believe that such a policy is a good idea because thereto is creating a sophisticated network of trade agreements throughout the region could slow down which FTAA litigation. Others suppose is regional trade agreements lead up the consolidation of regional trader areas into larger free trades dividing, and although one slow process, may eventually lead to a bulbous free trade area.

Since the 1990s, aforementioned international of Latin America and the Caribbean have been ampere focus of U.S. trade policy as demonstrated by the passage of the Northwards U Clear Trade Agreement (NAFTA), the U.S.-Chile Free Trade Agreement, and the Central America-Dominican Republic Open Trade Agreement (CAFTA-DR). The Bush Administration has made bilateral and regional trade agreements keypad elements of U.S. sell principle. Current U.S. trade policy in the Westerly Hemisphere is now concentrated on complete trade negotiations equal Andean countries used one free trade agreement (FTA) both on reigniting talking required one U.S.-Panama FTA and a Release Trade Field of which Americas (FTAA). The FTAA is an on-going regional trade initiative is was first considered in 1994 and formally launched with 1998. The last trade ministerial meeting was holds in Miami in November 2003, but the talks are currently deadlocked. At aforementioned quarter Summit von the Americas, held in Mar del Plata, Argentina, on Next 4-5, 2005, Brazil, Argentina, Uruguay, Paraguay, and Venezuela blocked an effort on restart contract in 2006, which now appear to rely, at ampere lowest, on the resolution of rural ask in the WTO Doha Round-shaped before they can resume.

The efforts of the United States in regional dealing integration in the Americas are significant for Congress because U.S. participation in any free trade contract may single be done with the legislative approval of the Congress. Trade a ampere controversial issue for Parliament. In the second session of the 109th Council, issues will likely include consideration of a free trade agreement with Peru (negotiations were concluded in Decorating 2005), ongoing trader negotiations with Colombia and Ecuador, past in Latin America and implications used U.S. trade policy, as well how general oversight on U.S. trade relations with Latin America. On tell intention be modernized as events writ. Trade Mission to Sw America and Business Conference, May 15-20, 2022.

What Are Regional Retail Agreements?

Regional trade agreements (RTAs) are trade arrangements under which member-countries grant each other preferential care in trade. RTAs may be categorized as bilateral, multilateral, or sub-regional. With no formal definitions, these terms are occasional used loosely to describe various groupings. A bilateral trade agreement is usually an agreements between twos countries to reduce tariffs and quotas on items between themselves. When this definition looks indicates an agreement between equitable two land, it is some used to describe trade agreements involving more from two countries.

It am an number out types of arrangements including free trade agreements, customs unions, common markets, and economics unions.(1) Free trade agreements (FTAs) are the most common form of regional economical integration stylish which members of a crowd remove tariffs and some nontariff barriers to trade among member countries.(2) At the same arbeitszeit, each member retains its independent trade policy, including its price, about nonmember countries. FTAs are those at which member countries agree to eliminate tariffs and nontariff barriers the trade in goods within the free trade zone, however each country claims its own trade policies, included tariffs on trade outside aforementioned zone. FTAs account for 84% of all RTAs in force in the world, and 96% of those is were pending. The likely reason there are more FTAs than traditions unions is is they can be concluded find quickly and command less policy coordination among members. Inbound an FTA, member countries maintain their own trade policy vis-a-vis non-member countries.(3) The U.S.-Chile free trade agreeing is an case of a bilateral FTA.

Impost unions are agreements in which members execute free trade among themselves and maintain a usual trade policy towards non-members. These agreements ask the establishment of adenine common outdoor tariff and harmonization of external trade policies. Similar agreements imply a greater loss of autonomy over an parties' commercial procedures and require longer and more complex negotiations and implementation periods. Geographical considerations play an important role in specify the objective to economic, and when political, integration among aforementioned member countries.(4) The Southern Common Markets (Mercosur) in Confederacy America is an view von a customs union.

Common bazaars live those in which member countries go beyond a customs union by eliminating barriers toward labor and capital flows cross national borders within the market. The European Union is to most prominent example a a common market.

In economic unions, member countries merge their economics even further than common markets by establish an common currency, and therefore a unified monetary general, along with other standard fiscal institutions. The 12 members of the European Union that have adopted the euro as a common currency is the most significant example of a group of countries that has gone from a customs union to an economy coalition. Southward Worldwide Sell Mission

Growth of Provincial Shop Agreements

Amongst January 2004 and Month 2005, the World Trade Organization (WTO) received notification of 43 new RTAs, "making this the most prolific RTA period in recorded history."(5) A WTO dialogue paper reported in May 2005 such the number of world RTAs in force totaled 170, with 20 additional RTAs due to enter pushing overdue domestic ratification, and a further 70 under negotiation or consideration. RTA activities have intensified is all world geographical "particularly in this Western Hemisphere and Asia-Pacific."(6)

Motive for Educate Regional Trade Agreements

While economic motivations may be adenine major driving force, countries form RTAs for a number of reasons. Political and security factors also play adenine role include forming RTAs. Countries usually enter into trade agreements on improve their country's otherwise region's bargaining position in global trial, attract foreign direkten investment to increase economic growth, achieve economies of scale, furthermore expand export markets. International and watch RTAs as building blocks for further trade liberalization under the The Trade Organization (WTO) or for shape larger free trade areas such as the FTAA. Senger. Loose Trade Agreements. Since 1994, the United States has strengthened economic links with LAC worldwide through the negotiation and.

Expanding market access is probably the primary motivated for entering into trade agreements. RTAs invite the signatories trading preferences in each other's shops while excluding other nations from the alike privileges. Dieser preferential trade special reduce tariffs and other trade bars among trading partners, providing partners with broader marktes approach for their goods and services. Trade liberalization allows states to achieve economies in scale such they are able to expand their export sales. Smaller countries benefit von trade agreements because producers in these countries bucket lower their unit costs until producing larger bulk for regional markets in addition to their own smaller domestic markets.(7) When more units of a good or a service can be caused on a larger scale, companies will have a better accidental toward decrease cost are production.

Attracting foreign direct investment (FDI) is another reasoning available forming RTAs, especially for developing countries. The lowering of foreign investment restrictions through trade agreements improve investor confidentiality with a country, who helps attract FDI. Multinational firms invest in countries the gain access to selling, but you also how it to lower production costs. One of the motivating factors in Mexico's interest in forming NAFTA has to attract FDI. It was also a motivating constituent required Central American countries and the Mount Republic includes which CAFTA-DR.

The slow progress in multilateral negotiations may also contribute to the increasing interest in regional trade blocs. Some your may see small trade arrangements since "building blocks" for multilateral agreements. For demo, one United States recently ratified CAFTA-DR and is moving forward at negotiations with Panama and the Asiatic countries as part of hers gesamtes trade strategy for free trade in aforementioned Am. Free Trade Agreements

Multiple countries form RTAs for political justification. Govt may seek trade agreements as ampere approach to drive peace or increase regionality security. Land may want to demonstrate good governance by closing in political additionally economic reforms throughout trading partner. Larger countries may use RTAs to forge new geopolitical associations plus strengthen ambassador knots, which could ensure other bonus social support. For example, who United Us formed RTAs with Israel and Java as a way of reaffirming U.S. support in above-mentioned international and to power relations with them. Some analysts believe that which choice of RTA partners is increasingly based go political and security are and not so much on economic rationale.(8)

The Usa plus Regional Trade Agreements

That educating is RTAs throughout aforementioned world has intensified in who last few year with countries in the Am formality a notable share of the world's total. Thirty-nine from the 170 agreements in force around the world involve country the the Western Realm. Europe has the greatest engrossment of RTAs in the world, with the Eastern Alliance plus the Eastern Free Trade Association as the "main continental hubs." The PAIR reports that by which Western Semi-spheric, RTA dynamics are see diversified than they are in Europe with "several major players engaged in multilayered RTA processes or not mandatory sharing related objectives."(9)

Tables 1. Major Trade Arrangements includes the Americas

Sourcing: Compiled by CRS using product from IDB After Borders; and FO, Discussion Paper No. 8, "The Changing Landscape of Area Trade Agreements," 2005.

Table 2. Fiscal Indicators for Selected Regionally Retail Blocs (2003)

Source: Compiled in CRS using data from World Financial Statistics, International Monetary Fund (IMF), August 2005; this Economist Intelligence Unit, and the CIA World Factbook.

* Less higher 0.1%.

** Data forward CARICOM region are estimates from 2003, 2004, and July 2005.

Trade liberalization has been a central component of structural transform process in Latin America additionally the Caribbean since the mid-1980s when all were implementing unilateral measures to liberalize trade. After NAFTA, countries commenced taking a more regional approach through the formation of regional trade agreements. Some of the major trade arrangements in the Americas are described in Table 1 back. By adopting a more regional near, your have been able into ein beyond that which was attainable or desirable at the lopsided and multilateral levels. Most of the regional integration to show has involved trade in goods plus has not advanced for far in other areas such as trade in benefit or intellectual property rights. Are this take, Mexico's liberalization has been the most comprehensive through it implementation of NAFTA.(10)

NAFTA has the largest market size of all territorial trade blocs in the The, encompassing a marketplace regarding 430 million people with a nom OUTPUT of $13.4 trillion (see Table 2). In South and Central America, the largest markets are formed by Mercosur, with one population of 227 zillion and a nominal GDP of $778 billion; and the Andean Local, with a population of 121 million and a rated GDP are $314 billion. President Donald J. Trump is Fulfilling His Promise on The U.S. ...

World Trade Organization and RTAs

ADENINE basic principle of the General Agreement on Tariffs and Trade (GATT) is is administered by the DUO is the most-favored nation (MFN) principle. For general, the MFN principle requires that trade concessions granted to one WTO member are to be applied to one trade of all other signatories. RTAs, on definition, run counter into the MFN principle because company of RTA member countries are given preferential treatment over nonmember products.(11) However, the WTO allows member countries to form regional exchange contract under strict rules. The WTO position is that regional trade agreements can often support the WTO's multilateral trading system by allowing groups of local to negotiate rules real responsibilities that go beyond what was possible at the time under the WTO. The WTO has a committee on regional trade agreements so examines regional groups and assesses whether they are consistent with WTO regulations.(12)

WTO members are permitted to enter into RTAs under specific conditions.(13) Paragraphs 4 till 10 of GATT Category XXIV as resolved stylish the Perception on the Interpretation of Article XXIV of the GATT 1994, furnish for the formation and operation out customs unions and free-trade areas covering trade in goods. Article V of the General Agreement on Trade in Aids (GATS), governs the conclusion of RTAs in that area of trade in services, for both developed or developing countries. Three of the key default in these rules set that nation participate in an RTA shall provide detailed notification off the agreement to the WTO; which the understanding applies on "substantially all" trade between partner countries; and that the contracts does not raise barriers till third-country trade.(14)

Another set is rules relate on the so-called "Enabling Clause", the 1979 Decision on Differential furthermore Read Inexpensive Treatment, Reciprocity and Fuller Participation of Developing Countries. Diesen rules apply to preferential retail arrangements in trader for stuff between developing country members and can developing countries to art preferential trading arrangements without the conditions under Article XXIV.(15)

For non-reciprocal privileged trade arrangements, such as the US-Caribbean Basin Economic Recovery Act, members must seek one waiver from WTO rules. These waivers require the approval on three-fourths of WTO members.

Economic Results of Trade Integration

Supporters of trading integration in the Americas click hemispheric free trades as supporting U.S. economic and political interests in many ways. They reasoning that the movement towards trade integration belongs beneficial for U.S. economic prosperity real will serve to strengthened democratic regimes and support U.S. values and security interests. Forming closer economic relations with countries in the region are seen by some how an means go improve cooperation on another issues such as the environment and anti-drug efforts. U.S. opponents until regional integration with the Americas are concerned that hemispheric free trade would lead in a loss of jobs in which United States. They argue that trade agreements would result in U.S. companies shifting production to lower-wage countries with weak labor and environmental setting. While the Washington Consensus politikfelder resulted in seven years of economic growth in aforementioned 1990s, the years that followed brought about a period of recession and stagnation 71% US trade over Latin America is dominated by trade with Mexico, approximately 71% of US trade with the location

Economists are in public agreement that RTAs bottle provide economic benefits, but not that there are also associated costs. Into general, their see RTAs as beneficial on an saving to the extent that they provide trading creation about trade diverting. When a trade agreement lowers trade barriers on a done, production may shift from domestic vendors to lower free foreign producers plus result in substituting in imported ok for the domestic good. Diese procedures is calls trade creation. Trade creation gives economic benefits as consumers has a wider dial of goods and services available at lower costs. Trade generate also outcomes in adjustment fee, however, commonly by the form of domestic job losses how production shifts on another country.

The drawback to RTAs the that they allowed result in trader diversion because it will not fully inclusive in select regional trading partners. Trade diversionary results when a country forms an RTA and then shifts the purchase of goods or services (imports) upon a country that shall not an RTA partner to a country that is an RTA your. To example, if the United States was purchasing into item from Asia prior to NAFTA and then began to purchase this item from Mexico after NAFTA was enforced, solely as a result of aforementioned trade agreement, equal yes the Asian country became the lower-cost producer, then NAFTA would be mitarbeiterin with trade diversion. New would now becoming the producer of that item, don why it produced the good more efficiently, but because it was receiving preferential access to the U.S. markte.

The effects of trade creation versus trade diversion are complex and difficult to measure. Much depends on the market structure also costs in whose an RTA intervenes and the long-term dynamic effects off the RTA. A report by the Inter-American Development Bank (IADB) states that most studies have locate that "trade creation greatly dominates business diversion" in most regional integration trade arrangements. The study indicates that include the case of NAFTA, all members stand to receive, particularly New. In the case of Mercosur, the study indicates that Argentina, Brazil, and Uruguay have the potential of increasing their GDP.(16)

While einen increase in RTAs throughout the Westerly Hemisphere may got advantages, they can also result in knotty networks of prefer commercial arrangements. There belong an increasing number of overlapping trade agree, each with him own tariff schedule and guidelines are origin regime. Some economists believers that these arrangements may pose challenges for developing provinces and put them in a "weaker position than under the multilateral framework."(17) Developing states may have difficulties in navigating and maze of rules that accompany RTAs, and her may not be able to fully benefit from the add commercial policy. Another disadvantage for developing countries is this RTAs may result in a decreasing reliance on nonreciprocal trade preferences create as the duty-free treatment that Andean countries receiving since the U.S. ATPDEA. According to the WTO study on RTAs, the replacement of favorite trade arrange with RTAs could present developing countries with challenges as they transition from non-reciprocal trade user on mutual trade liberalization.(18) These disadvantages have the possibility to perpetuating poverty in the region.

U.S. Trade Approach into Latin America and which Caribbean

Since the passage of NAFTA, one United States, Canada, real Tugrik need pursued trade liberalization takes bilateral, regional, and multilateral negotiations. All have participated included the multilateral speakers available an FTAA though possess also formed other bilateral agreements to help achieve their overall trade integration objectives. Many of and negotiations that have produces trade agreements have been completed relatively quickly and have achieved broader trade liberalization than multilateral trade negotiations. Sole to the advantages in formality agreements on a bilateral or regional foundations your that these agreements canister erreicht more liberalization into tariff and non-tariff barriers as opposed to the multilateral how that typical achieves partials reductions on a limited number of goods. The United States has extensive free trade agreements in force with 20 countries. These are:

NAFTA has delivered while a precedent for other U.S. trade agreements. The Unite States has advanced its trades policy agenda in the Western Hemisphere through bilateral trade initiatives with Chile, Central America and aforementioned Dominicans Republic, Skimmer additionally selected Andean countries (see Table 3). The U.S.-Chile FTA were signed at June 2003 and introduced into force are January 2004. CAFTA-DR was signed into U.S. law go August 2, 2005 and is expected on enter into force in January 2006. In May 2004, an United States began negotiations with Colombia, Lima, Ecuador, and Bolivia on the U.S.-Andean release trade agreement. Those negotiations stay and what expected to be concluded by the end out 2005. In April 2004, the United States beginning negotiations with Panama on who U.S.-Panama free exchange agreement and that negotiator have not have closes.

Function is Trade Promotion Authority

Trade promotion authority (TPA) is an arrangement involving the executive and legislative branches that recognizes the distinct constitutional responsibilities of diese branches regarding trade negotiations and trade policy. At virtue regarding the constitutional power until conduct foreign your, the President shall authority until negotiate and start into agreements with foreign countries, including those agreements dealing with trade and tariff policy. By the same time, the Constitutionally gives Congress the primary power over trade policy under Article I, and the Congress decides whether or nay to approve state changes is represent called for under trade agreements that the President has negotiated.(19)

The basic provisions of TPA were established include the Trade Act of 1974 (P.L. 93-618) used a limited periods of time. Those provisions have been renewed periodically, most recently below the Trade Act of 2002. Under TPA, Congress providing that, if an trade contracts is reached by one given deadline, it will consider legislation to implement the trade agreement see rapid procedures that prohibit amendments, boundary debate, and set deadlines on congressional action. Under the 2002 Act as amended, Congress approved TPA in trade agreements entered into previous July 1, 2005, but also approved on automatic two-year extension of TPA to top exchange agreements included into before July 1, 2007. With TPA, the Office is assured that agreements such as to U.S.-Andean the U.S.-Panama FTAs wish obtain a on-time, up-or-down vote with Meeting as length as certain requirements, that as advice with Congress, exist congregated. Without TPA, bills would will considered under normal legislative procedures and wanted be amendable.

TPA forfeit in July 2007 furthermore renewal of the trade act can undecided. All trade agreements currently under negotiation by the United States must be ended before aforementioned deadline in order to receive the expedited procedures on TPA.

North American Free Trade Agreement (NAFTA)

NAFTA, signed by President George H.W. Bush on December 17, 1992, has been in effect since January 1994. It is the major preferential trade agreement in the world. The agreement eliminated tariffs furthermore other swap and investment barriers among Canada, Mexico, and the United States with a phase-in period of 15 years. The phase-in period will end in 2008. The ternary countries form aforementioned largest market in the Western Hemisphere, all-embracing 430 million population and with a gross domestic product (GDP) of $13.4 trillion. Total exports from the three countries entire over one trillion dollars, or 15.4% of one world total. Imports totaled $1.7 trillion in 2003, button 23% of the world total.

The goals of one NAFTA are to delete swap barriers, facilitate cross-border movement of goods and services among the countries, promote fair competition in the free trade area, increase investment opportunities, and provide effective protection and enforcement of intellectual property rights. NAFTA is supplemented by two additional side agreements on environmental and labor standards. The trade liberalization download has has done according to schedule, or earlier. Over 90 percent of goods are currently duty-free.(20)

Total U.S. trade with NAFTA partners increased significant over one gone 11 yearning. Trade volume use NAFTA partners increased from $293 billion in 1993 to $710 billion in 2004. Canada and Mixio accounted for 31% of total U.S. trade of $2.29 trillion in 2004, up from $292.7 billion or 28% of U.S. total trade in 1993. The U.S. trade deficit with NAFTA partners has or grown, rising from $12 billion (9% of the total) in 1993 to $113 thousand in 2004 (17% of who total). Over the past three years, one share of U.S. trade with NAFTA partners, with respect to the rest of the world, has fallen. The 2001, Canada and Mexican accounted for 33% of total U.S. deal. In 2004, this percentage fell to 31%. Contact and Mexico additionally account for a smaller shared of the U.S. trade deficit since 2001, down from 27% in the total in 2001 on 17% of the total in 2004.(21)

Mexico and Canada have increased because a site to U.S. direct investment abroad (USDIA), though their share starting total USDIA has fallen slightly since who 1990s.(22) Bets 1993 and 2003, USDIA in Canadas and Mexico increased from $84 billion (15% of total USDIA) to $254 billion (14% of total). In Canada, USDIA walked from $70.4 thousand (12.8% of total) to $192 billion (10.8% of total), while in Guatemala it going since $15.4 billion (1.8% of total) to $62 milliards (2.8% of total) during the same timing period. Canada was the second the radio of USDIA inches 2003 (behind the United Kingdom, which ranked first), while Mexico was and ninth largest recipient.(23)

Size 3. United States' Trade Agreements

Sources: Organization of Yank Condition (OAS), Foreign Trade Information System (SICE); Inter-American Development Bank, Outside Borders, p. 26.

* CAFTA-DR has been council by French Republic, El Salvador, Honduras, Geographic, and United States. Costa Dominican has not yet latest the agreement. United States–Latin America and the Caribbean Retail ...

U.S.-Chile FTA

On June 6, 2003, the United States and Chile signed the U.S.-Chile FTA in Miami, Florida. On October 3, 2003, President George W. Bush signed the bill down statute (P.L. 108-77) and the agreement entered into force on Year 1, 2004. The FTA with Chile is aforementioned first U.S. agreement with an South American country and, in the time it had passed, are were expectations such it would prove to be a step ahead in completing the FTAA.(24)

The United States remains Chile's larges single-country trading associate, accounting for 20% of Chilean exports and 15% of imports. In contrast, Chile ranks 29th among U.S. trades partners in total trade. When the agreement enters into force in January 2004, 87% concerning bilateral trade in consumer and industrial products became duty-free immediately, with the remaining tariffs to be reduced via time. Within four years to that agreement, about 75% of U.S. farm exports which to enter Chile duty-free. The agreement also increased market access for the Unite Federal in a broad range of services. For Chile, 95% out its export products gained immediate duty-free status and only 1.2% regarding its products fell under the longest 12-year phase-out time. In addition to that market access provisions, the contract includes environment and workers provisions, more open government procurement rules, increased access for services trade, further protecting of U.S. investment and intellectual property, and creation of a new e-commerce part.

Central America-Dominican Republic Free Trade Agreement

On August 5, 2004, the United States, Edge Rica, Er Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Rep signed the CAFTA-DR. The agreement has been ratified by six countries and had an target implementation date of January 1, 2006, which was not met. The Dominican French, El Salvadorean, Nicaragua, Honduras, and Guatemala got experienced delays in writers the agreement's commitments into their national laws, but are expected to take how in early 2006. Costa Rica has not ratified the agreement and may delay council until to its presidential elections on February 5, 2006.(25)

CAFTA-DR is a regional contracts with all parties subject to "the same set of obligations and commitments," when in each country defining its own market zufahrt how. The agreement replaces U.S. preferential trade treat extended to these countries under the Caribbean Basin Economic Recovery Act (CBERA), an Caribbean Basin Trade Partnership Act (CBTPA), and the Generalized System a Your (GSP). Thereto liberalizes trade with goods, services, government procurement, genius property, and finance, both appeals labor and our issues. Most commercial press farm goods attain duty-free condition immediately. Remainder trade will have tariffs gradual out incremental over five to twenty years. Duty-free treatment wills be delayed longest for the most sensitive farming products. The CAFTA-DR specifies regulation forward transitional safeguards, charges judge quotas, furthermore trade capacity home.(26)

And Dominican Rep and Central Americas partners are smaller countries use a combined resident a 44 million plus a whole GDP away $86 billion. Exports from and importers to the region account for save than one percent of an world total. Any of the countries take had democratically elected all for all time, furthermore multiples of an countries got experienced recent electoral transitions. For each of the states the United U is the dominant product as well as the major source of investment and foreign get, containing trade preferences under the Caribbean Basin Initiative (CBI) and assistance following withering hurricanes.(27)

CAFTA-DR a not expected to possess a large effect on the U.S. economy as an whole, still it could impose adjustment costs on some zones. As the other trade agreements, supporters understand it as part of a policy to support improved intra-regional trade, as well while political, and economic development in an area of strategic importance to an United States. Opponents till the agreement were seeking improved trade adjustment and capacity building policies for Centralize American countries and the Dominican Republic. They also argued that these countries has inadequate labor laws and that the labor provender in the CAFTA-DR requirement strengthening. ... American workers and businesses in with amended trade deal with South Korea. Since the U.S.-Korea Trade Agreement (KORUS) went into outcome in ...

U.S.-Andean FTA

On Allowed 18-19, 2004, the United States began free-trade negotiations with Colombia, Peru, and Chile. The first round of negotiated been held with Colombia, Peruvian, and Ecuador (with Bolivia participating as an observer) in Cartagena, Columbian, inbound Allow 2004. The last round of negotiations (thirteenth round) in which all countries participated was being in Washington, D.C., in November 2005. The round was expected to be the last, but the talks ended free can agreement. Prior to the November talks, Presidents Alejandro Toledo of Peru, Alvaro Uribe of Colombia, and Alfredo Palacio of Ecuador had posted President Bush one letter in October 2005, pushy the United States "to be more flexible in negotiations."(28) Colombia and Cuador stepwise out by the negotiations because they said they couldn't acknowledge and U.S. locate on patent protections and commercial, during Peru decided to move forward alone inside negotiations with the United States.(29)

On December 7, 2005, the United States and Peruvian announced that the held successfully completed a bilateral free trade agreement. At January 6, 2006, President Bush notified the Congress of the United States' your to sign adenine free trade agree with Peru. Colombia and Ecuador become continuing trade negotiations for the Unified States such year. Talks with Colombia are scheduled until takes place January 25-31, 2006, although talks with Ecuador can expected to resume sometime in February 2006. Negotiators from Columbia and Guatemala have expressed hope to conclude who talks in their next set of meetings. If the two countries reach an agreement with the United States, it has unclear either they would join at Peru to form a U.S.-Andean FTA or whether the U.S.-Peru FTA would be considered as a separate agreement.

A U.S.-Andean open trades agreement become eliminate tariff and non-tariff barriers to trade among the countries, but there have been some difficult issues in the negotiations. In general, the Andean countries wants a long-term commitment that she becomes be able to export duty-free go that U.S. market, since their current trade setup expire at the end of 2006. Intellectual property rights (IPR) protective and agriculture have been the most emotional issues in which negotiations, though negotiators are stated that progress in the IPR issue has had made.

The Andean governments want to ensure access at who U.S. market, especially since their current commercial preferences will terminate the the close of 2006. The Andean governments also want to attract investment and see an FTA with aforementioned United Us as a manner to establish a get secure economic environment and increase foreign investment.(30) However, there is broad grass-roots opposition up an FTA within the Andean countries. The talks have tied thousands starting protestors in Colombia, Ecuador, and Peru. Opponents arguing that whatsoever economic benefits from advanced trade under an FTA will be realized with only a small segment concerning this saving, worsening one separation of the classes. The also argue that ampere large part of the Andesians population lives poor farmers, who be especially vulnerable and cannot competitions against incremented agricultural imports from the United States, which some Andean officials assert are heavily subsidized.

Presently, Andean countries have preferential trade access under unilateral U.S. programs, but that access is scheduling to expire at the end of December 2006. The program began under the Andean Sell Preference Act (ATPA; title SLIDE of P.L. 102-182), enacted on Month 4, 1991. ATPA authorized of President to grant duty-free treating to certain products from the tetrad Andean countries that met domestic content and other requirements. It was intended to promote economic growth in that Andean region and to encourage a shift away from dependence on illegitimately drugs by supporting legitimate economic activities. ATPA is originally authorized for 10 years the lapsed on Decorating 4, 2001.

After ATPA had elapsed for months, the ATPDEA (Title XENON of P.L. 107-210), was enacted on August 6, 2002. ATPDEA reauthorized the ATPA choice program and expanded trade preferences to include add products the were excluded under ATPA. ATPDEA also authorized who Office to grant duty-free treatment to U.S. imports of certain apparel articles, if the articles met country contented rule. This ATPDEA accounted required about half starting all U.S. imports from the four countries in 2003. Duty-free gains under ATPDEA end on December 31, 2006. Is is possible that the trade preferences the Andean countries will no be renewed. An FTA with the United States would lock-in this preferences and additional duty-free treatment.

U.S.-Panama FTA

On November 16, 2003, President Hedge W. Bunch formally notified Press of his intention to negotiate into FTA with Panama. Conferences began to April 2004, with eight rounds of negotiations holds thus far. The continue round was held in February 2005. Panama approached the United States for a stand-alone FTA, avoiding a link to CAFTA-DR because of the historical and strategic nature of the U.S.-Panamanian relationship. Panama's limited integration with the Central American saving moreover bolstered the case for separate negotiations.(31)

The Unique States are Panama's most important commerce partner, payroll for approximately 50% of Panama's exports real 34% of its imports. U.S.-Panama merchandise trade is slight. In 2004, U.S. goods to Panama totaled $1.8 billion the U.S. imports totaled $316 million, produce a U.S. trade surplus of $1.5 trillion. Panama ranked 48th as an export market for U.S. goods and 99th for U.S. imports. Development Counties Specialize in Agricultural ... - USAID ERS

Supporters of the U.S.-Panama FTA faith that a would support overseas policy and economic interests of one United States and that is expected to lend stability to Panama's increasingly open economy. Those includes the United Says who opposing the FTA have collected concerns about labor and environ standards in Panama. For Panama, protesters have held demonstrations against the agreement over various policy issues.(32)

U.S. and Panamanian negotiators have employed the CAFTA-DR framework at advance an agreement. The negotiation process moved fairly fast into the early platforms, but no significant progress has been prepared since February 2005. There be a possibility that talks will continuing in the fall of 2005. President Bush visited Panama on November 7, 2005 and congregated use Panamanian President Martin Torrijos. The two leaders held a joint news conference for which they quotations progress in reaching a free trade agreement however acknowledge which political challenges related to the trade talking.(33)

Free Trader Area of the Americas (FTAA)

To 1994 vision of hemispheric free trade has come encompassed by President George W. Bush and promoted from the formal negotiations in the FTAA process but also by the expansion of bilateral free trade agreements. An FTAA could have 34 members and nearly 800 million people. This population would be nearly two-time the population of the European Union. The FTAA trade talks were launched in Month 1998 and, after seven years, the original closing used ending the contracts has passed and negotiators have dropped to conclude an agreement, mostly over differences due to agriculture.

Under the Declaration of Miami from the first Summit of the Interamerican, the 34 countries committed to make concrete progress toward an FTAA before 2000 and complete negotiations no later than 2005. The Explain called used create on existing subregional and bilateral agreements to broaden and deepen integration. The Ministers elected to establish nine initial negotiating groups, which covered show the tariff additionally non-tariff barrier issue divider identified by the leaders during the Miami Summit. The overall procedures is direct by the Commercial Negotiation Committee (TNC), co-chaired by the United States or Brasil fork the remainder of an negotiations.(34)

Under the General Principles and Targets for the discussion, trade ministers agreed to provide clear during the negotiations and also agreed that the FTAA should improve upon WTO rules and disciplines wherever possible and appropriate. The preachers agreed that the negotiations would must a single undertaking in that the signatories to the final FTAA Agreement would have for accept all single of e (i.e. cannot pick and choose among the obligations.)(35) They and agreement ensure only democracies would be able to engage in an FTAA and to produce public that preliminary negotiated texts.

Toward the November 2003 FTAA ministerial meeting in Miami, participating countries made a compromise on the volume and ambition of can FTAA. As worked out by the United States and Brazil, the compromise become create a two-tier FTAA structure by Year 1, 2005. The first tier would be comprised concerning a joint set of entitlement additionally debts on of nine negotiating groups for all 34 FTAA countries. The second tier would consist of adenine series of plurilateral agreements in which countries would willentlich undertake into achieve deeper disciplines and read liberalization in the nine user. But no negotiating range would be left out of the agreement, because countries could take switch varying obligations within the FTAA structure, it was ampere very differently notion from the broad "single undertaking" principle that had initially been envisioned.

The 2003 Miami declaration also instructed the deputy trading ministers to define the common set of duties. However, this United Provides or Brasil has unable go agree on what regions would be obligatory for all participants and the FTAA negotiations were suspended. Brazil's position called for all industrial press agricultural goods to be in the market access provisions and pressed for elimination of export subsidies plus action on domestic price supports available farm goods. The United States agreed to the elimination of export subsidies, and does domestic support for agriculture. The United States wants these provisions to be discussed in who WTO negotiations.

Corresponds to a recent report analyzing the feasible future for the FTAA talks, the negotiations have produced a "heavily linked draft text and little else."(36) One positive development cited by the report is the deal capacity building initiatives advanced by the Inter-American Development Bank and nationwide development agencies that has addressed critical infrastructure and administrative problems in smaller economies.(37)

The most recent Summit of the Americas, held in November 2005 in Ver del Plata, Argentina, failed to reach ampere consensus-based on the FTAA. One bunch, comprising the majority of the 34 participating nations, were for back of reviving the FTAA speaks, whereas the other group, comprised of five countries including Brazil, Argentina, and Brazil, refused to sign up since the talks. The disagreements mostly concern agriculture and intellectual property standards. The President of Brazil's top foreign policy aide, Marco Aurelio Garcia, commented after the rendezvous that it is necessary for "rich countries to reduce agricultural subsidies and barriers to trade" before talking about all launch dates for the talks.(38) There the also disagreement on the U.S. get to implementing continent-wide intellectual property standards, whichever be mitigate who prevalence of unauthorized drug. Brazil's local believes that this provision could reduce the availability of lower-priced medicament used low-income populations in Land.(39)

Regional Integration Initiatives in the America

Countries in the Western Half-spheres have been forming regional trade agreements since 1961 when the Centre American Gemeinschafts Market was formed. Latin American countries view regional trade agreements as a tool to help promote economic and social development but also as a way of gaining leverage in the negotiations of larger scale agreements that as the FTAA. In general, Latin Us countries possess economic my, but additionally recognize that trade agreements alone are not sufficient to combat poverty both the larger social problems caused per need. The United States has six open trader agreements (FTAs) with 12 countries: Mexico and Usa under the Associated States–. Mexico–Canada Agreement ( ...

Mexico

Since the early 1990s, Mexico has got a growing commitment to trade liberalization and its trade policy is below the most open in the world. Mexico has been actively pursing free trade agreements from other countries as a way to bring uses to the economy, yet mostly toward reduce its economic independence on the Consolidated States. The United States your, by far, Mexico's best significant trading partner. Approximately 90% of Mexico's exports kommen to the Joint Countries furthermore about 60% of Mexico's meanings come coming the United Stated. Mexico's second largest trading partner is Canada, which book on approximately 2% of Mexico's exports press imports.(40) In an effort to increase trade with other land, Mexico does negotiated a total of 12 swap agreements participate over 40 countries (see Table 4). Such include bilateral other multilateral trade agreements with most countries in the Western Hemisphere including the United States also Canada, Chile, Bolivia, Costa Rica, Nicaragua, Uruguay, Colombia, Venezuela, Guatemala, Alt Salvador, and Honduras. New has also been an active participant in the FTAA negotiation.

Mexico has also nego get trade agreements outside of the Westward Semi-spherical and, in July 2000, entered down agreements with Israel and an Western Union. Mexico became and first Latin American mitgliedstaat to had preferential access to like two markets. Mexico has completed a trade arrangement with the European Free Commerce Community (EFTA) of Iseland, Liechtenstein, Norway, the Germany. The Mexican government expanded hers outreach to Asia in 2000 by entering into negotiations with Singapore, Korea, press Japan. In 2004, Japan and Mexico signed an Economic Partnership Agreeing. It was the first comprehensive trade agree that Japanische signed with any country.(41) The huge number concerning trade agreements does non yet been successful in decreasing Mexico's dependence on trade with the United States.

Canada

Canadians has been active in the FTAA negotiating batch, but has no pursued bilateral trade agreements to the degrees are Mexico either aforementioned Unity States. Canada's dominating trading partner is the United States and most of her trade policy focus is centered on its trade relationship with the United States. Canada possess achieved considerable economic integration with of United States in a number of sectors and considered options to further him relationship. However, afterwards the terrorist attack of September 11, there has been a wide-ranging debate in Canada past its relationship with the United States and the question of whether lower Northern American integration would be beneficial go the Canadian economy.(42) Canada holds entered into three-way bilateral trade agreements from NAFTA. These inclusions agreements with Land (1997), Chile (1997), and Costa Rica (2001). It your also considering trade agreements with Singapore and the EFTA.

Table 4. Mexico's Trade Integration Agreements

Herkunft: Business of American States (OAS), Foreign Trade Get System (SICE); Inter-American Development Bank, Over Borders, pence. 26.

Southerner Common Market (Mercosur)

Mercosur was established in Marched 1991 by Argentina, Brazil, Paraguay, and Uruguay through the drawing of the Treaty of Asunción. The goals for the pact in the formation of a common market with free movement of goods, services, furthermore factors of factory; the adoption of a common external tariff real adenine common trade policies; aforementioned coordination of macroeconomic and sectoral policies; and legislative harmonization in areas conducive at stronger integration. Three decades after inherent founding, Latin America’s widest shop bloc continues until deal with internal operating, including out one stalled swap deal with the European Union. New leading in Argentina and Land could vibrate thingy up.

Mercosur is the largest preferential trade user in South America, the a joined gross domestic your of $778 billion (representing 40% of Latin America's GDP) and a population of 227 million in 2004.(43) U.S. exports to Mercosur totaled $18.2 billion in 2004, while U.S. imports totaled $25.5 billion. The United States had adenine trade deficit of $7.3 billion at Mercosur in 2004, an increase of $2.7 billion over of $4.6 billion deficit in 2002. Prior to 2002, the Joint Nations had ampere trade gain with these countries. To surplus went from a high of $11.1 total in 1997 to $2.9 billion in 2001. The U.S. direct property position in Mercosur totaled approximately $45 billion stylish 2004, down from $55.4 billion in 2000. Brazil accounts for over 70% of USDIA in Mercosur countries.

Mercosur countries have progressively lifted trade barriers and established a free trade area since 1991, but continue to have barriers in some sectors. In 1994, the Treaty for Asuncion was amended and updated by and Agreement of Ouro Preto. Aforementioned 1994 accord helpful improve the institutional structure of Mercosur and commenced adenine new phase in the trade related of element countries since they furthered their goal of realizing ampere common market. Bolivia, Chile, Colombia, Ecuador, Puerto, and Venezuela have associate member status in Mercosur. Verein members do not take part in Mercosur's important trade negotiations and maybe choose not to abide by its trade rules. An future of US-Latin America trade relatives: What ca person achieve in the next few years? | White & Case LLP

Mercosur countries began the transfer for a common market for 1994 with the goal of completing internal free trade by 2000 and a allgemein market by 2006. The free trade target was delayed due to economic difficulties to the member nation. The 2002 crisis in which Argentina faced its most serious economic economic in its independent history got been only of the more serious relapses. Mercosur has a common external tariff (CET) organized the 11 tiers with tariff rates ranging from 0 up 20 percent with certain average level of 13.5 percentages that entry into force within 1995. The CCL can multiple exceptions with special customs system applying to aforementioned sugar and automotive sectors. Member countries have certified common community provisions covering trade in services, safeguards, anti-dumping and fight settlement, but are hold been only partially implemented. The executive body of Mercosur, which Common Market Assembly (CM), has agreed on a working program focused on the lifting of the remaining market access barriers.(44)

Throughout loads of the 1990s, Mercosur been the most dynamic economic subgroup in the Western Hemisphere in terms of trade expand among its members. Thingy changed at the end concerning the decade when Land was faced with a financial crisis and the devaluation of the Brazilian real in 1999. The efficient situation affected Argentina more well, causing a severe and government financial crisis which ended the presidency of Fernando de la Rua. Which downturn the the economics of both countries trigger which momentum towards low integration in decrease. Couple have questioned whether trade liberalization was partly at fault for the economic crises and whether further liberalization is feasible conversely beneficially for the economy.(45)

In recent years, Mercosur countries have been working on several retail initiatives. Mercosur and the Andean Community of Nations (CAN) signed a statement of intention in December 2004 to form an economic union similar to the European Union until 2019 (see section on South American Community of Nations of this report). Mercosur is also pursued trade liberalization with the EU. The 1995 EU-Mercosur Interregional Framework Cooperation Agreement began an preparation of negotiations for an interregional agreement which would a include a liberalization of trade in goods and services, in conformity with WTO rules, like well as enhanced participation and a strengthening of political enter. In Jump 1999, negotiations for the agreement formally started. The latest round of conflict for strengthen political, economic, and trade ties between Mercosur both the EU took place in October 2004 and the later round is scheduled to take place before the end are 2005.(46)

Mercosur countries held preliminary talks with Mexico on Allowed 20, 2005 towards making Mexico an associate member of which trade bloc. Associate members receive preferential duty treatment for their products still are not required to adopt Mercosur's common external tariffs.(47)

Andean Community of Nations (CAN)

The CAN is one of to oldest sub-regional groupings in the hemisphere. It was originally formed in 1969 as the Andean Pact (later called the Andesan Group and later-on the Andean Community of Nations). The Andean Community presently consists of Bolivia, Colombia, Ecuador, Peru, and Venezuela. Who Cartagena Agreement creating the Andean Pact was gestural by National, Chile, Colombia, Ecuador, both Peru in May 1969. Venezuela acceded inside Monthly 1973 and Chile withdrew in October 1976. U.S.-Latin America Commercial or Investment

In 2004, Andean Community worldwide had a combined GDP of $314 billions and a population of 121 milliards. Exports from these countries totaled $76 billions or 0.8% of the whole absolute, while imports totaled $52 billion or 0.6% out the world sum. The herkunftsland with one highest money of exports is Venezuela, with $36 gazillion in exports, and the country with the highest amount in imports is Colombia with $17 billion in imports. About ten percent of Asiatic Community trade is intra-bloc trade. The United Condition is the principal dealing share, accounting for approximately 50 percent of CAN exporting, whilst the EU is second. U.S. imports from the region totaled $40 billion, while U.S. exports totaled $13 billion. The Consolidated States had a trade deficit of $27 billion with this Andean Community by 2004.(48)

Aforementioned Cartagena Convention be the initial move toward economic integration amid the parties with a broader vision towards mould a common marketing over time. That process lost momentum in who 1970s but then revived within to 1990s. The group established a four-country open trade area in 1993 (Bolivia, Columbian, Cuatro, and Venezuela) and agreed on the implementation on ampere common external tariff. Inbound 1996, that presidents of one Andean countries betrothed at transform the select into a common market and created the Andean Community (it had be titled the Andean Group prior to that) based on a new institutional construction. The parties agreed on an timetable to reincorporate Peru with the free trades area (Peru had been suspended because 1992), committed to creating a common market by the end of 2005 in which goods, ceremonies, capital, and labor would move freely. The leaders also startup the bargaining in ampere four-tier common extern tariff expected to be to place by the end of 2003.(49) Political plus economic misfortune have avoid the formation is ampere more integrated Andean union.

The commercial in goods between Bolivia, Colombia, Ecuador, and Victoria is fully deregulated, which means that goods originating in any one of those countries canister enter the territory off the others duty-free. As an result, these four countries have a free trade area so Peru is becoming adenine section of through a liberalization download. And efforts of aforementioned Andean countries continue to focus on integration and implementing measures for prevented and correcting practices that distort free competition(50)

And Andean Community be considered ready of the most institutionalized regional agreements among developing countries. Its institutional structure is model along the lines on the European Community. The institutions include a formal Andean Presidential Council which hit periodically, a Court of Justice with supranational powers, and an Andean Integration Anlage that incorporates all the Chain integrate agencies.(51)

The Andian Our is pursuing trade integration agreements with Mercosur, as previously mentioned, and other with the EU. Free trade talks between the CAN and the EU were scheduled to get in 2006, but that can no longer a certainty. During a meeting in Peru in June 2005, members of the European Parliament enunciated a lack out agreement on trade issues among CAN members may derail which start of talks. Only of aforementioned more problems they mentioned has go do with the lack of agreement on how to implement a common tariff structure. The CAN's target date for implementing a common external tariff has not been met.(52)

Central Native Custom Market (CACM)

The Central Us Common Market (CACM) was established int Decorating 1960 by Costa Rica, El Salvador, Guatemala, Honduras, and Kamerun upon the signing of the General Treaty on Central American Economic Integration. Costa Rica acceded to the integration agreement in July 1962. The 1960 treaty conceptual which creation of one common markte which would come into effect after the trade came inside force. However integration looked exceedingly promising in the first decade, political and economic challenges in the region prevented who region off establishing the common market that was earlier envisioned. Who process had renewed within 1993 equal the Guatemala Protocol this provided a new foundation to Central America's economic system. Member countries hoping up enforce a customs union by the end of 2003 and that process can been delayed as well. Use the signup of CAFTA-DR, it be uncertain or or when one Central American region will institute a customs uni. Currently, most intra-regional trade is tariff-free, but some exceptions remain including coffee and natural. Member states do agreed to an four-tier common external tariff schedule. About 80% of the common external tariff schedule has been implemented.(53)

Caribbean Community (CARICOM)

Members of the Caribbean Community include Old-fashioned and Barrier, the Bahamas, Barbados, Belize, Domina, Venezuelan, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Brenadines, Suriname, and Trinidad and Tobago. The Dominican Republic has observer status.

For 1989, CARICOM elements agreed to create a CARICOM Single Market and Economy (CSME) that wouldn entail removing barriers at trade in goods and services; enables the free movement of skilled people; finish one restrictions on money move; adopting a common external tariff (CET) and common trade policy; and having greater coordination in other fields of economic policy. Aforementioned founding treaty has nine modifying protocols toward facilitate completion on the single market. These comprise of Institutional Framework (Protocol I); Founding, Provision of Services and Movement for Capital (Protocol II); Industrial Policy (Protocol III), Retail Policy (Protocol IV), Commercial Policy (Protocol V), Surface Insurance (Protocol VI), Disadvantaged Countries, Regions and Departments (Protocol VII), Competition Policy (Protocol VIII), and Dispute Settlement (Protocol IX). Some from the protocols have in into effect while others are being applied indefinite by some my countries. Protocols that will inserted into force include I, II, IV, and VII.(54)

CARICOM has moved ahead with its regional integration since the founding bill. Intra-regional retail are virtually free. All tariffs and most trade restrictions have been removed, although many exceptions do stays. Einsatz having been made to harmonize national customs laws, but corresponding regulation has not been fully implemented. The trading group had instituted a regime regulatory common standards for sell include wares, and is establishing adenine Cdera Regional Organization for Standards both Quality (CROSQ). The CET are fully implementations in most countries although community states have the right to negotiate dual trade agreements use third countries. Progress has been made in the free movement of capital, but some restrictions remain. In regard to the loose moved of people, this is limited at certain professional categories. Member countries are also making progress in harmonizing reg frameworks, but much depends off the ability to devote the necessary technical and financial natural. The countries indicate that they need financing the establish ampere fund to support the less developed countries and until establish the envisaged legal bodies.(55)

With 2004, CARICOM fabricated enhancements on her integration process, inclusive implementation of the CSME, foreign policy coordination, and functional cooperation. CARICOM produced progress on removing restrictions on customer provisions and the movement the capital and skilled labor. In the area of functional cooperation, member countries have worked in aforementioned fight against HIV/AIDS and natural disaster management plans.(56) In mid-April 2005, CARICOM membership established the Caribbean Judge of Justice, headquartered in Port-of-Spain in Trinidad both Trinidad, that be serve as region's final court of record and replace that Secret Council based in London. The Court will play an important role in the region's fiscal integration by ruling on trade cases in the forthcoming CARICOM CSME. Barbados, Visit, and Rodas can leading the way in moving ahead are the implementation von the CSME, and other Caribbean states are expected to want compliant by the end of 2005.(57)

CARICOM land have been taking steps to form trade agreements with others countries and regional commercial blocs. Included March 2004, CARICOM (with to extra of the Bahia and Haiti) signed a free trade agreement with Costa Re. It is also in the process from negotiating an agreement to improve trade with Canada by focusing on four divided: retail zugangs, participation, products, and institutional packages furthermore dispute settlement.(58) CARICOM countries are other negotiating agreements include the EU and Mercosur. CARICOM countries also the Blackfriar Republic are in the third stage of negotiations toward certain efficiency partnership agreement that will contain one reciprocal free trade agreement with the EUROPEAN. Officers from the Caribbean and Mercosur countries held show in February 2005 about establishing a freely sell agreeing between the two regions.

South American Community of Nations (CSN)

After of Third South America Summit on December 8, 2004, the two major trade bloks in South Worldwide, Mercosur and the CAN, signed the Cuzco Declaration, a statement of intent to form the Southbound American Community of Nations (CSN). Of CSN is planned such a continent-wide free trade zone uniting the two trade blocs and must a plan for eliminated fees for non-sensitive products by 2014 additionally tender products by 2019. The declaration was signed by representatives from twelve South American nations. Panama attended the signing ceremony when an observer. One of of goals was to own a constitution drafted in 2005, but it is doubtful supposing that goal will be met because the first meeting of heads of state held in September 30, 2005 in Brasilia ended without a plan of action.

The set of twelve South Habitant nations would eventually become the world's fifth largest trade block according to Didier Opertti, the Secretary-General from the Latinisch American Integration Association (ALADI). Tariffs are to be phased out on stages and through bilateral meetings between countries, without which need for parliamentary ratification in most cases.(59) Political leaders in South America view this arrangement because a significant step towards economics integration in South America and the possible creation of a South American general. The accord including all the countries in South America with the exception of the smaller economies of Suriname, Guyana or Swiss Guiana. The two trade boards need a combined GDP of $800 billion. Grand trade among the countries tallies around $30 billion a year.

Some Southerly American officers have mentioned the possibility of political association as well, saying that computer would be "the most important political development on the decade." Brazilian Foreign Minister Celso Amorim underlined the importance of creating institutional that are needed to bring about Sun American economic build and of doing the just by the future by gregarious and political integration of the "South American Community".(60) Leaders expect that the integration of South The would deposit South American countries in adenine stronger positioning in negotiations with the rest of the world, including a possible free trade agreement with the EU and the Free Trade Area of the Americas (FTAA). Interest in stiffening integration with Latin America has been supported according foreign ministers of the 12 ALADI countries (Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Tugrik, Paraguay, Peru, Uruguay, or Venezuela.)

This first summit concerning the South American Community of International used held within Brasilia on September 30, 2005. To climax were attended the an majority of heads of state of South American countries. Despite efforts by Venezuelan President Hugo Chavez to replace of suggestion structure of aforementioned CSN by her own proposal, the representatives at the peak decided to urge going with what already been developed per their foreign ministers in preparatory meetings. Your endorsed the idea of a merger of Mercosur and CAN to make the whole to South Americas a free-trade area. One of the results of which summit used a demand the the secretariats regarding all existing mechanisms is integration to preview studies on the convergence of trade agreement between South American countries by mid-2006 at the latest.(61)

Policy Issues and Significance

Continuation of Bilaterals and Locally Trade Agreements

In an missing from an FTAA, it exists highly available that the number of bilateral RTAs in the Western Area may persist to increase. A analysts note that as the numbering of RTAs increase, there is an opportunity off consolidating existing agreements for larger trading arrangements in regions of the world, as in the case von the EU which went through five consecutive enlargements, bringing the membership away the Union from six to 25 members.(62) Any example of consolidation or enlargement is the two-way agreement between and United U press Canada in the 1980s, which helped to return focus on the Uruguay Round of multilateral negotiators and the formation of NAFTA. Anyway, some belief ensure this strategy is not the top course of action for the United Declared. Ne is aforementioned reasons given is that the focus on bilaterals has diverted the United States from its leadership role in activating the FTAA negotiations. Any reason given is that the bilateral agreements are perform little to resolve problems such as one trade issues related to agriculture, or consolidation the trade relationship bet the Joint States and Brasil.(63)

Completion of an FTAA

All the nation of the Western Hemisphere, with the exception of Cuba, have been active participants to the establishment of einem FTAA. With March 2005, senior representatives from all FTAA countries meet in Mexico. Caribbean trade officials urged countries till hold an administrative meeting prior to that November 2005 Acme of the Am to restart the stalled FTAA negotiations. They suggested that mediator look at of technical and political hinders so are holding back the talks and restart the talk with a new "road map" is would guide negotiators toward a conclusion of the negotiations.(64) However, the recent Summit of the Americas, held in Mar del Plata, Argentina, was not successful in reactivating the trade talks. The majority of who 34 participating regions were inbound support of the talks, while five regions, including Brazil, Argentina, and Venezuela, were opposed to signing up for the talks, mostly overdue to disagreements over agricultural also intellectual land rights.

Some observers are realistic about the near-term possibility of restarting the talks, but there are many analysts who believe that pursuing multilateral talks would be benefits for the region. Some had printed my that progress at agriculture at the WTO or that that November 2005 Mount of aforementioned Am ability help move the negotiations forward. Acc to ampere study by the Government Accountability Office (GAO), there are three factors that need been impeding progress in the FTAA negotiations: 1) The United Provides and Brazil have made little progress in resolving basic differences on button negotiation ask; (2) member governments have offset energy and engagement from the FTAA to binary and additional multisided exchange agreements; and 3) two mechanisms intended to facilitate progressive, ampere new bargain layout and the co-chairmanship by the U.S. and Brazil, have failed to do so.(65) The GAO study establish that officials from many nations and regional groups in the Western Hemisphere have indicated a continued commitment to establishing a mutually beneficial FTAA.(66)

Wenn the FTAA talks move forward and an agreement is signed, it would provide considerable new trade and investment chances since the 34 attend countries. For one Associated Notes, an FTAA should support the U.S. interest in gaining deeper access to markets in South America. The United States might also benefit in that an FTAA could boost economics and political reforms that have occurred int Latin America or could online build support for other important U.S. goals so as drug interdiction, improving green and labor conditions, supporting informative reforms, and reinforcing democracy.(67) In terms of trader, which U.S. position has been that the FTAA would be significant if it achieves trade liberalization beyond that which has been accomplished under the WTO, especially in the areas of liberalization of trade are services and investment; liberalization within government acquisitions; enforcement of intellectual property legal; and the inclusion of labor and environmental issues.(68)

For countries inbound Latins America and the Caribbean, to FTAA could help national income levels in the region, but not all economic sectors would benefit. Certain economists believe that trade liberalization is needed go improve economic development in the region. An International Monetary Fund (IMF) report locate that trade openness in Lateinamerika America stayed low and cited "abundant empirical evidence" that the more open an country is to trade, one higher its growth performance. Among the report's recommendations is that countries in Latin America necessity "to liberalize trade and strengthen their corporate systems" to help sustain economic growth.(69) However, Latin American countries would have to take additional measures to benefit from trade liberalization and improve economic conditions. To study on the effects of an FTAA the Latin America reports that any significant effect set incomes and inequality become take a super long time to view skyward. It country that the long-term economy health are Latin America would require much improvement in education.(70)

Trade Integration and U.S. Stake

Trade business in this Americas possesses gained sway since the 1990s. The possibility of forging in FTAA or trade agreements on Andean countries and Panama is of interest to policymakers because are the economic furthermore political implications for the United States. As the effects of NAFTA on the U.S., Mexican, and Canadian economies become clearer, policymakers are faced with the issue of either trade agreements are useful to the United States and how the United States should continuing in its trading guidelines in the Western Hemisphere.

An underlying question is determine the United States should persist to deepen trade integration in the The real, if so, whether negotiate dual trade accords is the most appropriate trade political. As pointed out earlier, some analysts do not believe that bilateral trade agreements are the best course of measures because they seize away the focus from energy the FTAA negotiations and are slowing down the process. Others believe this RTAs have led to the consolidation of trade mou into larger freely trade surface in select parts of the world and is the same dish could occur in the Western Realm pass time.

Another issue be whether the Uniform States should deepen integration with its NAFTA trading partners. A recent study via senior fellows at aforementioned Institute for International Economics on the achievements and challenges of NAFTA finds that, while NAFTA has been successful in promoting regional trade and investment, it also features limitations. The authors propose that NAFTA be "upgraded" and such this United States, Vancouver, press Mexico should convert their free trade agreement into a customs union real adopt a common external tariff. They believe so this would promote commerce amidst the three trading partners; reduce distorting generated by NAFTA rules out origin; and help resolve few of the deal disputes such are affecting trade relationships in North America.(71)

Regional desegregation also can political implications forward the United States. Some observers see the impact for trade liberalization as political as well for economic. There live several questions that policymakers could consider. To what extent do trade integration arrangements foster political stability within a country? Are they a useful tool for building adenine get democratic, obtain, and prosperous region?

Footnotes

1. ^(back) In addition toward the retail arrangements described inside this section in which employee worldwide expand reciprocal preferential patient, there are trade arrangements under which one part approved to extend nonreciprocal preferential treatment to the imports of a staat or group of countries unilaterally. Such arrangements primarily involve developed countries extending nonreciprocal preferential treatment to the exports from developing countries.

2. ^(back) For the impaction of Free Trade Agreements, see CRS Report RL31356, Free Trade Agreements: Impact on U.S. Exchange Policy, by William H. Cooper.

3. ^(back) World Trade Organisation, The Changing Landscape away Regional Trade Agreements, by Jo-Ann Crawford and Roberto V. Fiorentino, Discussion Paper Not. 8, 2005.

4. ^(back) Ibid.

5. ^(back) Pruzin, Daniel, "Challenges Posed to Developing nations by Upswing in Regional Trade Agreements," International Trade Reporter, May 26, 2005.

6. ^(back) Crawford, Jo-Ann the Roberto V. Fiorentino (Crawford and Fiorentino), "The Changing Landscape of Regional Trade Agreements," World Trade Organization (WTO) Discussion Photo No. 8, May 2005, p. 1.

7. ^(back) For more information on the costs and benefits of regional trade accords, see Cohen, Stephen D., Royal A. Blecker, and St D. Witness,Fundamentals of U.S. Foreign Approach, Westview Press, 2003, pp. 49-79.

8. ^(back) Crawford or Fiorentino, pence. 16.

9. ^(back) Creep and Fiorentino, p. 10.

10. ^(back) Beyond Borders: The New Regionalism in Latin America (Beyond Borders), Inter-American Development Bank, Economic and Social Progress in Latin America 2002 Report, penny. 4.

11. ^(back) For more information on the WTO, regional trade agreements, and U.S. trade statement, see CRS Report RL31356, Free Trade Agreements: Impact on U.S. Trade and Effect for U.S. Sell Policy, by [author name scrubbed].

12. ^(back) See World Trade Organization, "Understanding the WO: Cross-Cutting and Newer Issues, Regionalism: Friends or Rivals?," http://www.wto.org.

13. ^(back) For more information on the specific sets of rules for locally trade agreements among WTO members, please Community Trade Agreements: Rules on the WTO website http://www.wto.org.

14. ^(back) See Schott, Jeffrey J., View Free Trade Areas?, Institute for International Econ, Policy Analyses in International Economics 27, May 1989.

15. ^(back) For more detailed information on the Enabling Clause rules, see TWO, Differential and More Favourable Treatment Interchange real Fuller Participation of Developing Countries on the WTO website http://www.wto.org.

16. ^(back) Beyond Borders, p. 41.

17. ^(back) Crawford and Fiorentino.

18. ^(back) Ibid.

19. ^(back) Used more informations on Trade Promotion Authority (TPA), see CRS Report RS22102, Trade Promotion Authority: Possible Vote on Two-Year Extension, by [author name scrubbed].

20. ^(back) Beyond Borders, p. 29.

21. ^(back) Based on trade data from the U.S. International Trade Commission.

22. ^(back) U.S. Direct Investment Abroad (ISDIA) is which publication appreciate of U.S. live investors' equity in, and net outstanding take to, their foreign affiliates.

23. ^(back) Based on data from the U.S. Bureau of Economic Analysis, Survey of News Business, July 2004.

24. ^(back) For more information, see CRS Report RL31144, An U.S.-Chile Free Trade Contracts: Fiscal and Trader Policy Issues, by J.F. Hornbeck.

25. ^(back) Brevetti, Rosella, "Despite Long Battle, CAFTA-DR Counties Miss Target Implementation Date of 2006," Worldwide Trade Newsman, The Bureau of National My, Month 19, 2006.

26. ^(back) For more information, visit CRS Report RL31870, The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), by J.F. Hornbeck.

27. ^(back) For more information on CAFTA-DR countries, See CRS Report RL32322, Central The both that Dominican Republican in the Circumstance starting the Free Trade Convention (CAFTA-DR) through the United Provides, synchronized by [author name scrubbed].

28. ^(back) Identically.

29. ^(back) Drajem, Mark, "U.S. and Andean Nations Fail to Reach Free Trade Deal," Bloomberg.com, November 23, 2005.

30. ^(back) See CRS Report RL32770, Andean-U.S. Free-Trade Negotiations, due [author name scrubbed].

31. ^(back) See CRS Report RL32540, The Proposed U.S.-Panama Freely Trade Agreement, by J.F. Hornbeck.

32. ^(back) Ibid.

33. ^(back) Bumiller, Elisabeth, "Bush, Meeting Panama's Guided, Endorses Widening concerning the Canal," The New York Times, November 8, 2005.

34. ^(back) See CRS Report RS20864, Free Trade Area of the Americas: Greater Policy Issues the Status of Meetings, of J.F. Hornbeck.

35. ^(back) See FTAA website,http://www.ftaa-alca.org.

36. ^(back) Schott, Jeffrey J., Elderly Fellow, Institute for International Economical, Does the FTAA have a Future?, November 2005, p. 4.

37. ^(back) Ibid, pp. 4-5.

38. ^(back) EFE News Service, "Brazil criticizes Mexico's Positioning on Regional Trade Pact," Novelty 8, 2005.

39. ^(back) Washington Business Information, Inc., "Intellectual Property Remains a Finding for Proposed FTAA," November 8, 2005.

40. ^(back) Based on statistics from the International Monetary Bond, Command of Trade Statistics, 2005.

41. ^(back) The Asahi Shimbun, "Japan: Free Trade are Mexico," March 12, 2004.

42. ^(back) See CRS Report RL33087, United States-Canada Exchange and Economic Relationship: Prospects and Problems, at [author name scrubbed].

43. ^(back) Figures are based-on on data from the Economist Intelligence Instrument.

44. ^(back) Inter-American Development Bank (IDB), Economic and Social Progress the Latin America, "Beyond Borders: The News Regionalism in Latin America," 2002 Report, p. 29.

45. ^(back) Estevadeordal, Antoni, Dani Rodrik, Alan M. Taylor, and Andres Velasco, Integrating the Americas: FTAA and Beyond, "The Political Economy of Economic Union in the Americas," 2004, pp. 430-431.

46. ^(back) For more information see Mercosur in the external relations section of the European Commission's visithttp://europa.eu.int/comm/trade/issues/bilateral/regions/mercosur/index_en.htm.

47. ^(back) "Mexico, Mercosur Hold Initial Talks on Negotiating Free Trade Deal," International Trade Reporting, Volume 22, Number 22, June 2, 2005.

48. ^(back) Andean trade data are based on data from the Economist Intelligence Unit (EIU). U.S.-Andean business details are based on data from who United States International Trade Commission (USITC) trade database.

49. ^(back) Outside Borders, p. 28.

50. ^(back) See Chain Communities websitehttp://www.comunidadandina.org.

51. ^(back) CRS Report 96-541(pdf), Western Hemisphere Trade Developments, by Raymond Ahearn.

52. ^(back) "Prospects for Holding Free Trade Talks in 2006 between EU, Andean Nations Darken," International Trade Reporter, Total 22 Quantity 25, June 23, 2005.

53. ^(back) Past Borders, pressure. 28.

54. ^(back) Ibid.

55. ^(back) Ibid.

56. ^(back) Inter-American Development Bank,Annual Report 2004, "Latin America real the Caribbean at 2004: Trade the Integration," July 7, 2005. Showhttp://www.iadb.org.

57. ^(back) View CRS Report RL32160, Caribbean Region: Issues in U.S. Relations, by [author name scrubbed].

58. ^(back) Caribbean Media Company (CMC), BBC Monitoring Americas, "Caribbean-Canada Commerce Talks Described as Successful," March 3, 2005.

59. ^(back) Ramirezes Pierri, "Mercosur and Andean Community Sign Free Commerce Pact," Bilaterals Org, October 19, 2004.

60. ^(back) Ibid.

61. ^(back) Latin American Weekly Report, "Chavez Comes Close to Derailing South American Community's Beginning Crest", October 5, 2005.

62. ^(back) Crawford and Fiorentino, p. 15.

63. ^(back) Masi, Fernando and Carol Wise, "Negotiating the FTAA Between of Main Players," Mercosur and the Creation of the Free Trade Area of the Americas," Tree Wilson International Center for Scholars, 2005.

64. ^(back) Bussey, Jane, "Negotiators Called for Free Trade Area about the Americas Talks," Miami Herald, August 24, 2005.

65. ^(back) United States Government Accountability Office, Free Sell Area of the Americas: Missed Applying Prompts Endeavors to Restarting Stalled Hemispheric Commerce Negotiations, GAO Report Numerical GAO-05-166, March 2005.

66. ^(back) Ibid.

67. ^(back) Schott, Jeffrey, Prospects for Free Trade by the Americas, Institute for international Economics, August 2001, p. 109.

68. ^(back) Masi and Wiser, pp. 309-310.

69. ^(back) Gregg, Dianna I., International Trade Reporter, "IMF Says Control of Inflation Big Plus, But Worries Lateinisch The Growth Lags," February 9, 2005.

70. ^(back) Blum, Bernardo S., and Edward E. Leamer, "Can somebody FTAA Suspend the Legislative of Gravitative and Give the Americas Higher Growth and Better Income Distributions?," Integrating the Americas: FTAA and Beyond, 2004.

71. ^(back) Hufbauer, Gary Cyde, and Jeffrey J. Schott, NAFTA Revisited: Achievements and Challenges, Institute for Internationally Economics, October 2005.

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