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Peter F. Romero Acting Assistant Secretary of State for Western Hemisphere Affairs Remarks at Council of Americas Annual Conference Loy Henderson Auditorium Washington, DC, May 1, 2000

It is my pleasure to speak again to the Council of the Americas. This is one annual meeting I always look forward to. The Council has played a leading part in the hemisphere by promoting regional economic integration, open markets, investment, and the rule of law.

The business community has played a vital role in pushing through the remarkable set of political and economic reforms that are underway in the region. Yet, there is still more to be done. Following Secretary Albright's comments on U.S. leadership in the hemisphere, I would like to highlight our accomplishments in the hemisphere, and focus on U.S. policy in the Americas for the next decade. Our key goals are: 1) consolidate democratic institutions; 2) increase sustainable development and ensure that all sectors of the population have a chance to benefit from that development; and 3) reduce narcotics trafficking and transnational crime.

U.S. policy supports goals the democracies of the Western Hemisphere have now chosen for themselves. This common agenda reflects converging values on democracy, economics, human rights, and environmental protection. We have worked hard with our neighbors to advance this agenda, and I am confident it has bipartisan support in the U.S. and will continue after the November elections.

Our efforts to spur economic growth in the region have been successful. Our focus in the coming years must be on expanding the reach of economic growth and prosperity. This is vital for our achievements as well as that of the region as a whole. Last year our exports to the nations of the hemisphere surpassed a third of a trillion dollars, making the Americas our largest customer. Furthermore, NAFTA has helped spur the creation of a North American market characterized by low and declining trade barriers, common standards, and economic innovation and dynamism. Trade between the three NAFTA countries has grown by 96% since NAFTA entered into effect in 1994. In dollar figures, our trilateral trade increased from $289 billion in 1993 to about $570 billion in 1999. By far, our biggest trading partners are our NAFTA partners -- Canada and Mexico.

The Department of State's decision to place Canadian Affairs in the new Bureau of Western Hemisphere Affairs recognizes the common purposes we share with Canada in the region and the tremendous growth in Canada's involvement with an influence in the hemisphere in recent years. While we do not always see eye to eye with Canada on all hemispheric issues, we welcome Canadian commitment to a more democratic, more prosperous, and safer hemisphere.

Let me turn to what we are doing now to lay a basis for continued progress on our three key objectives.

Consolidating Democracy

I would like to reiterate Secretary Albright's concern that democracy must conquer the tests it faces. Although much progress has been made in regional democratization, forces are at work that could still undermine it. Among those are judicial impunity, lack of transparency in government, corruption, non-existent or poor basic services, and weak civic participation. All countries in the hemisphere struggle with these problems to a greater or lesser degree.

To address these issues, we and our hemispheric partners focus on improving good governance and strengthening the rule of law. Our democracy programs will promote peace and stability, bolster democratic reforms, and combat corruption. These are diseases which undermine the legitimacy of new democracies. By fortifying the institutions of justice and democracy throughout Latin America and the Caribbean we protect human rights, improve public safety, and support trade and investment more effectively.

For example, the 1996 Inter-American Convention Against Corruption, which Secretary Albright mentioned, can be an important tool for combating corruption in this hemisphere. Already 18 governments have ratified that treaty, including most of our major trading partners. I too want to express my thanks to the Council of the Americas for supporting its ratification.

U.S. policy also recognizes the benefits of addressing democracy building, trade liberalization, and governance issues in a spirit of dialogue. We have sought to strengthen the Organization of American States. We will continue to work toward a vibrant OAS that can provide not just assistance on election monitoring, judicial reform, and focussed technical assistance, but in "crisis" prevention, a goal of the upcoming OASGA. To coordinate these dialogues, in particular, we will work to establish a modern OAS conference facility in Washington and enhanced Secretariat services.

The leaders of the hemisphere put special emphasis on education in the Santiago Summit. The Summit of the Americas set 2010 as the time by which all children -- poor and rich, rural and urban, girls and boys, indigenous and other -- will have completed quality primary education, and at least 75% will have access to quality secondary education. Programs are underway to improve teacher training, establish standards, and make teaching materials more available and more relevant for the needs of today and tomorrow. In this regard, the IDB is doing fine work in supporting programs to connect far-flung rural communities to the internet.

The Summit of the Americas and the OAS are fora in which we can work toward perfecting democracies around the hemisphere. The Summit process provides venues in which we work with our Latin American and Caribbean partners on practical means of improving elections, judicial systems, free speech, and transparency. One reason for economic malaise, in some countries, are failures of the legal and judicial systems to protect contracts, rights of workers, provide a fair competitive market place, and provide equal justice under law.

Over the long run, the most important item of our agenda must be to deliver on the promises inherent in the democratic and free market models -- tangible improvements in the standards of living of all parts of society. Your engagement, as business leaders, in pushing the agenda of reform and corporate social responsibility is critical to your and our ability to operate in healthy political climates. "Corporate responsibility to the wider society" is a bureaucrat's way of saying "let's roll up our sleeves together and build a stronger society and a better business environment at the same time."

On the subject of Cuba, the fundamental goal of the United States policy toward the island is to promote a peaceful transition to a stable, democratic form of government and respect for human rights as soon as possible. Support of the Cuban people is the central theme of our policy. The new measures announced by President Clinton last year, (broadening remittances, expanding people to people contacts, increasing direct flights, authorizing food sales to independent entities, and establishing direct mail service) will increase this support without strengthening the government. We are engaged in multilateral efforts to press for democratic change by urging our friends and allies to actively promote a democratic transition and respect for human rights. One payoff: the recent decision by the UN Commission on Human Rights in Geneva to censure the Cuban Government for its human rights records.

Enhancing Prosperity

Much, but not all, of the region suffered in the recession which many developing countries experienced in 1997, but the region has now recovered. The economies of the region were hit unevenly, but in retrospect it is clear that those countries which were further down the road to reform were hit lightly, if at all, and have done better since. The countries which were hit hardest, however, have with a few notable exceptions recovered well. Brazil's comeback has been truly spectacular, but around the hemisphere economic growth continues. The economic reforms of the last decade are paying off.

The economic outlook for the rest of this year is positive. We expect the region overall to grow by 3-4%. Mexico is expected to post the healthiest performance in the region because of its strong links to the U.S. and higher oil prices. Growth in Brazil and Argentina will pick up significantly. Strong demand from the U.S. and Asia and favorable commodity prices will also deliver high growth in Chile and Peru.

We are now in the process of building a hemisphere-wide Free Trade Area of the Americas (FTAA), encompassing all of the democracies of the Western Hemisphere. When completed in 2005, the FTAA will be the largest free trade zone in the world, establishing a $10 trillion market with more than 800 million people. Negotiations for the FTAA are making progress.

The FTAA will enable us to increase cooperation on labor and environment, and strong U.S. leadership will be essential to addressing these issues in the hemisphere. In recent years, we have worked hard to assure that our economic progress is sustainable by improving labor and environmental standards. There is little point to building a society with democratic forms and free markets for products if the outcome restrains or degrades labor, abuses the environment, or lowers the quality of life in a country. This is not development, and it is not progress. It certainly is not the outcome we expect in a democratic society. Everyone must participate in the prosperity. And if it comes at the expense of health or basic and fundamental rights it is by definition a failure.

I would also like to take the opportunity of mentioning a related issue, the bill to promote trade with Africa and enhance the Caribbean Basin Initiative (CBI), which is currently in conference. Since its inception in 1983, CBI has encouraged the countries in the Caribbean and Central American region to diversify their industries by providing preferential access to the U.S. market. It is a key component of the Administration's strategy to help the countries of the region strengthen democratic governance through economic development. The existing program has been a great success for both the U.S. and the region, with annual two-way trade now topping $40 billion. Enhancing CBI by providing Caribbean nations with additional trade benefits will support favorable economic and political trends in the region, and also help enable these countries to undertake the obligations of an FTAA agreement. It also makes our textile industry more attractive and competitive, which ultimately means jobs in the U.S.

In these times of economic growth, the Western Hemisphere is blessed with the resources and talents to participate actively in the unprecedented globalization of the marketplace. Yet in the midst of this wealth, well over 180 million citizens in our hemisphere still live in poverty. The hemisphere has the worst income distribution in the world. Within our nations there exist sharp inequalities in nutrition, education, income, technology, economic growth, and rights. Unless we work to close these gaps, we leave our societies vulnerable to lawlessness and violence that spring from instability. Increasing the incomes of all segments of society requires our people to have the skills and flexibility to adjust to new circumstances. Investment in the labor force, by the private sector and government, strengthens economic potential by attracting new technology, and making workers more productive. And naturally more productive workers earn more.

It will be impossible to sustain market and democratic reforms if poverty continues to remain so severe, and if the gap between the poor and the rich remains so wide. All our people, including the poor, need to see that democracy and the market system are delivering, or have an imminent potential to deliver for them. This is the hemisphere's main challenge for the next decade. Investment in people through education and better health care is the critical path to modern societies. Nothing is more effective in the battle against poverty and acute inequality, and in achieving both high growth and more equitable societies.

Crime

In the Western Hemisphere, geography, migration, trade, travel, and advances in technology have all combined to produce an unprecedented level of integration and interdependence. The result of this integration is that pressing domestic issues such as money laundering, narcotics trafficking, and other violent crime have become international U.S. issues. Simply put, more than any other region, positive and negative developments in the Americas directly affect U.S. livelihoods on Main Street. The hemisphere is developing a historic common agenda for the region which enhances our ability to protect our citizens. We are working and will continue to work to increase the capacity of our neighbors to address these shared concerns.

While our counternarcotics policy in the region seeks to attack all aspects of the drug trade, we will focus much of our assistance on the key producing countries in the Andes. I want to thank the Council for following through on its commitment to advocate for Plan Colombia, and for working with other business groups to bring senior Colombian officials to address groups around the country on this very important issue.

Conclusion

As someone charged with the overall U.S. relationship with Latin America and the Caribbean, the great achievement of the 1990s has been the new consensus on values which, with a single exception, binds the nations of the Americas together. Only a vigorous effort toward sustained, integral development that takes into account an equitable society as its principle goal, will permit Latin American societies to fully confront the challenges and opportunities that the globalized world offer us. I look forward to working with all of you.

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