Hemispheric Disturbances in the Americas

Since former U.S. President Ronald Reagan first mentioned the concept of a single market extending from Alaska to Argentina’s southernmost Tierra del Fuego, U.S. presidents from both parties have trumpeted a hemispheric free trade zone.

President Clinton formally proposed the idea at the First Summit of the Americas in Miami in 1994, but progress since then has been virtually non-existent. A Free Trade Area of the Americas (FTAA) would be larger than the European Union — but without the political integration or free flow of labor.

The benefits of an FTAA for the United States as the dominant hemispheric economic power are clear. Without tariffs or other barriers to inhibit the entry of U.S. goods, U.S. exports to the region would soar — and far surpass regional trade with other gigantic economies such as China. But progress on the possibility of an FTAA has been negligible.

In fact, since 1999, when anti-globalization protesters mobilized in Seattle, the progress of all free trade negotiations in the hemisphere has been defined by debates about the problems of liberalizing trade barriers between staggeringly unequal economies.

In each regional meeting, the notion that freer trade simply perpetuates the relationship between the rich and the poor of the hemisphere is more deeply engraved in the minds of the dissenters, the same is true for the opposing view — that open markets increase opportunity, which is held vehemently by its proponents.

This disappointing summit in Mar de Plata, held in early November 2005, revealed the ongoing regional divides over the issue of free trade. It also showed a strikingly bitter animosity between regional leaders that directly stems from this skewed balance of power. And, arguably, it reflects a desire to blame disappointing and uneven Latin American growth on the open market reformers and richer countries of the North.

Granted, the substantial anti-American sentiment in the region, stemming from blame for U.S. support of brutal Southern cone dictatorships in the 1970s and 1980s, current disapproval of the Iraq conflict and numerous other issues, does not help the already complicated situation.

Nevertheless, for the frustrated residents of the region, 24% of whom live in poverty, it was bitterly disappointing that several of their leaders were unproductively sidetracked by the denouncing of open market reforms, those that advocate them, and impractical but politically motivated blame game.

Presidents such as Venezuela’s Hugo Chavez and Brazil’s Luiz Inácio Lula da Silva have convinced the populations in several countries of one overriding theme. According to them, the proposed FTAA — or ACLA as it is called in its Spanish version — is yet another tool of the North American superpower to preserve its own big business interests and continue to exploit the developing markets of its poorer southern neighbors.

The Common Market of the South (Mercosur), a regional trading bloc — consisting of Argentina, Uruguay, Paraguay and Brazil, along with the very public addition of Venezuela — vigorously opposes the FTAA. These five countries