DLC | Blueprint Magazine | February 7, 2001
The Free Trade Area of the Americas: Why the United States Must Take the Lead
By Jenny Bates
Exactly three months after moving into the White House, the new president will face one of the biggest foreign policy challenges -- and opportunities -- of his term. In April 2001, at the Summit of the Americas in Quebec, he can assert U.S. leadership in the creation of a Free Trade Area of the Americas (FTAA) -- a $10 trillion common market of 800 million people stretching from the Bering Strait to Tierra del Fuego. By taking the lead at a critical moment in the FTAA's formation, the president can ensure that it reflects U.S. interests and values while locking in Latin America's movement toward democracy and economic reforms. Failure to lead the way into this enormous and unprecedented free market, furthermore, would be costly: The United States could be shut out of Latin American markets, regional protectionism would rise, and the leadership vacuum would be filled by another powerful player such as Brazil.
Preparations for the FTAA -- which will reduce barriers to trade, spurring competition and economic growth throughout the hemisphere -- have been under way since 1994, and formal negotiations were launched in 1998. And while the U.S. government has publicly supported the process, the administration's attention has mostly been elsewhere as working groups did the initial yeomanship of trade talks. Now, however, the momentum to create this vast new trade area is entering its crucial final phase. Over the next two or three years, the most important decisions will be made. If the result is to be favorable to the United States, both economically and politically, White House leadership is urgently called for. As the largest player in the region, the United States cannot afford to sit on the sidelines.
There are other reasons why the FTAA should be a top priority for the new president. Locking in the economic reforms among Latin American economies of the past two decades, for example, will spur continued growth and reinforce pressure for political reform. Such a commitment will reduce risk for investors, spur inflows of much-needed foreign capital, and promote development. Such economic liberalization can also challenge powerful, entrenched interests and liberate opposition forces to push for democratic change. Indeed, in most countries in the region, economic reform has gone hand-in-hand with progress on the political front. According to a Freedom House study, the major economies of Latin America have moved from "unfree" to "free" since the 1970s (though there has been some danger of backsliding in the Andean region recently).
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http://www.ndol.org/ndol_ci.cfm?kaid=108&subid=206&contentid=2974AND THEY REMAIN COMMITTED:
http://www.ndol.org/ndol_ka.cfm?kaid=108In international trade, free trade is an idealized market model, often stated as a political objective, in which trade of goods and services between countries flows unhindered by government-imposed tariff and non-tariff barriers. Economic analysis and nearly all economists support the proposition that free trade is a net gain to both trading partners and that the gains from free trade outweigh the losses.<1> It is opposed by anti-globalization and some labour campaigners due to a variety of perceived problems.
The term is given to economic policies, as well as political parties that support increases in such trade.
Free trade is a concept in economics and government, encompassing:
International trade of goods without tariffs (taxes on imports) or other trade barriers (e.g., quotas on imports)
International trade in services without tariffs or other trade barriers
The absence of trade-distorting policies (such as taxes, subsidies, regulations or laws) that give domestic firms, households or factors of production an advantage over foreign ones
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http://en.wikipedia.org/wiki/Free_tradeFree trade benefits only the wealthy within countries
Some argue the following:
The wealthy own more corporate equity, which increases in value as companies are able to produce at the lowest cost in the world.
As the world's markets merge into a single global market the number of market-leading companies worldwide drops, with international take-overs of local champions by giant corporations. This process concentrates wealth in fewer corporations.
Free trade replaces low-skilled jobs often done by the poor easier than high-skilled jobs. This implication of the Stolper-Samuelson theorem is challenged on the basis that technology makes offshoring high value-added work feasible and more profitable than moving low-skilled jobs.
According to Ravi Batra's book, The Myth of Free Trade, open trade in the US has resulted in replacement of manufacturing jobs for service jobs, which pay less on average. The product trade deficit results in more investment money flowing into the US as a trade-off. This investment money mostly ends up with wealthy investors and owners; and "trickle down" is not sufficient to compensate for the loss of manufacturing jobs and wagers. After all, if a wealthy person receives money from such investments, they may spend some on foreign cars and foreign trips, which is not going to go back into the US economy. According to Batra's research, even though free trade may increase GNP, the increases do not flow to rank-and-file workers.
http://en.wikipedia.org/wiki/Free_trade_debateThe National Security Implications of "Free" Trade
All we hear about are the supposed benefits of this corporate written trade policy, even though those benefits are often highly questionable or just plain fabricated. But we never hear about how "free" trade policy is now being used not only to destroy America's job base, but to help arm what could be one of America's most dangerous military competitors (we barely hear it from the "strategic class" of foreign policy elites in D.C., we don't even hear it from the Bush neoncons, who purport to be serious hawks, but whose silence on this issue shows they are hawks only when it doesn't offend their corporate benefactors). That should concern not only the workers who have been displaced by corporate-written trade policies, but every single American who is interested in the long-term security of this country.
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http://www.davidsirota.com/2005/12/national-security-implications-of-free.html
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