FREE TRADE AREA OF THE AMERICAS HITS SOME ROAD BUMPS.
| Autor | Flynn, Matthew |
By Matthew Flynn [The author writes for Business News Americas in Sao Paulo.]
At the end of May, the US sent its top trade negotiator Robert Zoellick to Brazil to accelerate and deepen talks for the creation of the Free Trade Area of the Americas (FTAA). The creation of the world's largest trade bloc--covering an area that has 800 million inhabitants and a combined GDP of US$11.4 trillion--is one of the top priorities of the administration of US President George W. Bush on the commercial front.
"It is necessary that all the countries of the continent stick to the time frame of January 2005 agreed in Quebec," emphasized Zoellick, referring to when negotiations must be concluded. He added that, given the recent vulnerabilities of Latin American economies, the need for the FTAA is even greater, and he argued that a hemispheric free trade area would give Brazil and other countries a competitive advantage against China.
But government officials and civil-society leaders in the Southern Hemisphere remain concerned that their fragile economies might not benefit from a possible trade deal with the US. Many Latins fear that their markets will be swallowed up by more competitive, better capitalized US firms. Even the GDP of Brazil, the region's largest economy, is just one- eighteenth the size of the US GDP.
In addition, opening up to increased foreign competition in the past has not resulted in increased economic growth nor better living standards. Imported goods have often displaced local producers causing increased unemployment, more poverty, and heavier debts. At the end of 2001, desperate economic conditions in part linked to increased market openings, in Argentina led to riots, which forced the country's president to step down (see NotiSur, 2002-01-11).
New political leaders take office
Having had enough of recurring economic crises, local electorates have put into office more left-of-center politicians. This new political wave culminated in the election of Luiz Inacio Lula da Silva as president of Brazil. Lula experienced first hand the grinding poverty that a third of his population suffers, and he promised to enact changes from past administrations. His first initiative, which he has taken to meetings of the Group of Eight (G-8) major industrialized countries, is the Fome Zero (Zero Hunger) program (see NotiSur, 2003-02-21).
Lula does not just want to provide better social- assistance programs but also to defend Brazil's economic development...
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