April 12, 2001 | News Releases on Latin America
WASHINGTON, Apr. 12, 2001-A major conference held later this month gives the Bush administration an ideal opportunity to launch a new U.S. trade policy with its hemispheric neighbors and discourage the protectionist trends gripping many Latin American countries, a new Heritage Foundation paper says.
President Bush should use the third "Summit of the Americas," to be held April 22 in Quebec City, to highlight the benefits of free trade and offer nations that have already liberalized their economies a chance to sign a free trade agreement with the United States, writes Ana Eiras, a policy analyst in Heritage's Center for International Trade and Economics.
The president should hold Chile up as a role model for other nations to follow, Eiras writes. Over the last 20 years, it has signed free trade agreements with countries in Asia, Europe and Latin America, strengthened property rights and imposed a uniform import tariff that has helped curb corruption and promote trade flows.
"Poverty's down, and living standards are up," she adds. "The Bush administration should waste no time in completing a free trade agreement with Chile."
One thing the president shouldn't do, Eiras says, is re-launch the Free Trade Area of the Americas (FTAA) initiative as it was designed at the first Summit in 1994.
"Ironically, by tying the FTAA to a future date, the Clinton administration slowed economic reforms and hurt free trade," she says. "Governments saw reforms as bargaining chips for future trade talks that would be wasted if they liberalized their economies before the Clinton administration's proposed FTAA target date of 2005."
President Bush also should use the April 22 Summit to press for the establishment of a new global trade strategy, Eiras says. The concept-a voluntary association of nations sharing a firm commitment to open markets-was first proposed by Heritage Foundation analysts last fall in the 2001 "Index of Economic Freedom."
The idea, according to the Index editors, is to form a rules-based "club" for nations dedicated to free trade. To qualify for membership, countries would need only a firm commitment to protecting basic economic freedoms in four critical areas: trade policy, capital investment, property rights, and regulation. Countries with closed economies would be barred from membership in this proposed "Global Free Trade Association" (GFTA).
"GFTA members would gain immediate access to a group of wealthy, open-market countries, including the United States," Eiras says. "Such an association would give members a significant opportunity to increase economic growth, leading to a rise in living standards and greater economic development."