The State Department web site below is a permanent electronic archive of information released prior to January 20, 2001.  Please see www.state.gov for material released since President George W. Bush took office on that date.  This site is not updated so external links may no longer function.  Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.

Ambassador Richard C. Brown Coordinator for the Santiago Summit of the Americas Remarks before the Subcommittee on International Economic Policy and Trade House International Relations Committee Washington, DC, April 29, 1998

Thank you, Madam Chairwoman, for this opportunity to testify on one of the most important issues in U.S. foreign policy today--free trade in the Americas. I would like to direct my testimony to the question of how free trade fits into our overall policy toward Latin America and the Caribbean. My Commerce Department colleague, Regina Vargo, will address the specifics of how the Free Trade Area of the Americas will be constructed.

Basic U.S. Objectives

This Administration's policy toward Latin America is derived from our fundamental national interests:

• To preserve and advance freedom by promoting the principles and values upon which this nation's democracy and identity are based.
• To keep the United States economically strong, internationally competitive and prosperous, and to preserve its position as the leader in an expanding global economy.
• To establish a framework of cooperation that protects our citizens and our friends from the new transnational threats of environmental degradation, narcotics trafficking, migrant smuggling, terrorism, and international crime.

These general objectives are reflected in the goals of the Summit of the Americas, which remain the framework on which we build our specific policies and programs, and through which we have established an unprecedented degree of hemispheric cooperation.

How does trade fit into this framework?

The Santiago Summit

As you know, the second Summit of the Americas concluded its deliberations in Santiago, Chile just 10 days ago. Its agenda was broad, with specific action programs grouped into four "baskets." Economic integration and free trade were one of those baskets, the others being 1) education, 2) democracy, justice and human rights, and 3) alleviation of poverty and discrimination.

The first Summit of the Americas, held in Miami in December 1994, celebrated the new commitment to democracy and market economics in Latin America and the Caribbean. Santiago moved that commitment into a new phase--a "second generation" of reforms to restructure institutions and make the benefits of reform available to all parts of society.

Santiago also celebrated the region's considerable economic achievements--solid growth, dramatically lower inflation, and resistance to the "Asian flu."

But perhaps the most important aspect of Santiago was the maturing of the U.S.-Latin American relationship as partners. For example, the Santiago Action Plan addresses several areas which, until recently, were guarded as uniquely within national jurisdiction (such as press freedom, judicial reform, and security issues). It also represented a "passing of the torch" of summit leadership from the U.S. to Chile. Chile, along with the U.S. and Canada as hosts of the past and future summit, will form a troika to lead the post-Santiago implementation process, just as the U.S. and Chile led that process for Miami, and chaired the year-long preparations for the Santiago Summit.

Initiating the negotiations for the Free Trade Area of the Americas (FTAA) was certainly one of the highlights in Santiago. The leaders reaffirmed their commitment to conclude negotiating the FTAA no later than 2005, and to make concrete progress by the end of the century. I believe the U.S. achieved all of its major objectives for comprehensive negotiations that will lead to open markets in the hemisphere; they include:

• Establishing Miami as the negotiating center for the first three years of the FTAA negotiations.
• Ensuring U.S. leadership in the negotiations, with the U.S. co-chairing the process with Brazil during the crucial closing period of the negotiations.
• Establishing a committee to expand the involvement of citizens' groups, such as labor, environmentalists, and academia, in the FTAA process.
• Creating nine negotiating groups which play to U.S. strengths, including agriculture, market access, services, and importantly intellectual property rights.
• Recommitting FTAA countries to agree to make concrete progress by the year 2000.
• Vice Ministers will meet in June to start the negotiations, and all the negotiating groups on specific issues will meet before the end of September.

While lack of fast-track in the U.S. was clearly on many minds, there was recognition that this authority is not required during the initial stages of the negotiations. In fact, in 1986 the U.S. was able to engage actively in the launch of the Uruguay Round at Punta del Este without having fast-track authority. Nevertheless, there is no question that without fast-track, the U.S. position at the negotiating table has been weakened. And certainly, the U.S. will need fast-track authority to successfully complete the negotiations for this historic trade pact.

Our Trade and Political Goals are Interdependent

I clearly want to state that free trade in the Americas is about far more than trade, or even economics. Our foreign policy goals--as well as the hemisphere's common goals as expressed in the summit--are interdependent and mutually reinforcing.

More open trade will increase growth and jobs in the economies of all participating countries. I want to emphasize that word "all." Too many people persist in seeing more open trade as a zero-sum game--if you win, then I lose. But history has repeatedly proved that open trade is a win-win game, with all partners benefiting from the increased efficiency that trade provides in terms of jobs, rising standards of living, and low inflation. The prevailing economic climate in the U.S. of growth and price stability is to a significant degree a function of the benefits we are deriving from more open global trade.

More open trade means new opportunities. As we tear down the barriers among our economies, the new winds of competition will sweep out the old patterns of privilege and monopoly. Competition rewards efficiency, innovation, and enterprise.

Increased growth and new opportunities give validity to the reforms being implemented in the region to strengthen democracy and implement market-based policies.

Economic vitality is indispensable to protecting the environment for future generations and waging an effective fight against illegal migration, the drug trade, and other forms of transnational crime. The growth and new opportunities provided by open markets put a strong weapon in the hands of those Latin American leaders who want to work cooperatively with us in addressing these problems.

In turn, progress toward the goals of the other economic "baskets" is crucial to achieving economic success. Rapid technological change and growing globalization require well-educated workers. Investors and innovators need an efficient and fair judicial system--as well as the long-term political stability which can only come when citizens believe their government institutions are fair and effective in protecting their rights. Helping the poor by increasing their opportunities will stimulate growth as well as build more just and inclusive societies.

All of this is of great importance and relevance to the American people.

Importance of Latin America to the U.S.

For the United States, Latin America's democratic opening and improved growth and social conditions provide unprecedented opportunities to advance the welfare of our own people.

International trade now accounts for more than a quarter of the U.S. GNP, triple the share of a few decades ago. To a large extent this expansion of trade has been the engine driving U.S. prosperity. This economy's ability to create 14 million new jobs since 1993 would not have been possible without U.S. leadership in tearing down barriers to trade around the world. Many of these are higher-paying export jobs.

Latin America and the Caribbean has been the fastest-growing market for our exports ($134 billion in 1997). During the last half of 1997, our exports to that region overtook our exports to the European Union. Last year, Mexico overtook Japan as our second-largest market (after Canada).

With a GDP approaching $2 trillion, almost half a billion consumers, a high propensity to import from the U.S. (about 40%), and a firm commitment to growth-inducing reforms, Latin America and the Caribbean is a region of tremendous opportunities.

Never before has the U.S. had such favorable conditions for leadership in the hemisphere, for pursuing our interests, and for achieving the goals which we now all share. The Plan of Action which the hemisphere's leaders adopted in Santiago 10 days ago contains an ambitious agenda which addresses the major political, economic, and social challenges our region faces as we enter the new millennium. The document reveals a fundamental new reality of our neighborhood: We have achieved a powerful consensus on how to work together to overcome difficult problems and begin to achieve the critical aspirations of our citizens to make their lives fuller, freer, and more prosperous.

[end of document]

Return to the DOSFAN Home Page. This is an official U.S. Government source for information on the WWW. Inclusion of non-U.S. Government links does not imply endorsement of contents.