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APPENDIX 4
THE ROAD TO THE FTAA1
The effort to unite the economies of the Western Hemisphere into a single
free trade arrangement was initiated at the Summit of the Americas, which
was held in December of 1994 in Miami. The Heads of State of the 34 democracies
in the region agreed to construct a "Free Trade Area of the Americas"
or FTAA and to complete negotiations for the agreement by 2005. The leaders
also made a commitment to achieve substantial progress toward building
the FTAA by 2000. Their decisions can be found in the Miami Summit's Declaration
of Principles (Appendix 2) and Plan of Action (Appendix 3).
The effort to build the FTAA is a dynamic process that involves three
key components:
- The Trade Ministers of the Western Hemisphere, who have developed the
overall work plan for the FTAA;
- The 12 FTAA Working Group established by the Trade Ministers that are
gathering and compiling information on the current status of trading relations
in the hemisphere. These groups have now been transformed into nine Negotiating
Groups (see below); and
- The Vice Ministers of Trade of the Western Hemisphere, who coordinate
the efforts of the working groups and make policy recommendations to the
Trade Ministers.
Since the Miami Summit, the hemisphere's Trade Ministers have met four
times to formulate and execute a work plan for the FTAA. The first meeting
was in June of 1995 in Denver, U.S.A., the second in March of 1996 in Cartagena,
Colombia, the third in May of 1997 in Belo Horizonte, Brazil, and the fourth
in March of 1998 in San Jose, Costa Rica.
During the Belo Horizonte Ministerial, it was agreed upon that the formal
negotiations leading towards an FTAA would begin in March, 1998, at the
Second Summit of the Americas in Santiago, Chile. The 12 Working Groups
(seven were established in Denver; four in Cartagena and one in Belo Horizonte)
met on numerous occasions, at locations throughout the Americas. In addition
to gathering information, each working group was directed by the Trade
Ministers to examine trade related measures in its respective areas, in
order to determine possible approaches to negotiations.
The Trade Ministers also instructed their Vice-Ministers to accept recommendations
from the Working Groups in order to "direct, evaluate and coordinate"
their work. Since the San Jose Ministerial, the 12 original Working Groups
were transformed into nine "Negotiation Groups."
The ambitious goal set by the leaders of the Western Hemisphere at the
1994 Summit of the Americas in Miami to create a free trade area has been
given a significant push forward by the completion of the San Jose Declaration
on March 19, 1998. This Declaration, agreed by the Trade Ministers of the
34 participating democracies in the FTAA process, served as the basis for
the launch of the hemispheric trade negotiations by heads of state and
government in Santiago, Chile on April 18 and 19, 1998. The San Jose Declaration
can be compared to the 1986 Punta Del Este Declaration which launched the
Uruguay Round of multilateral trade negotiations. It represents a commitment
by 34 countries to the most ambitious undertaking for trade liberalization
since that time. It also represents the largest regional integration effort
ever undertaken involving both developed and developing countries in a
common objective to realize free trade and investment in goods and services,
on a basis of strengthened trading rules and disciplines.
The breadth of the negotiations which will be set in place by the San
Jose Declaration is unprecedented even by the standards of the Uruguay
Round. These negotiations will encompass all of those areas previously
negotiated and which fall within the World Trade Organization's (WTO) ambit,
with the goal of going beyond previously agreed multilateral liberalization
within the hemisphere, wherever possible. Importantly, however, the FTAA
negotiations will include areas not presently under the WTO such as a common
investment regime, government procurement, and competition policy, which
are not yet subject to commonly agreed disciplines among a large number
of trading nations.
Equally, the FTAA negotiations will examine the interrelationship which
exists between certain key negotiating areas, such as agriculture and market
access; services and investment; competition policy and subsidies; antidumping
and countervailing duties, among others, so as to ensure that the outcome
of negotiations are as efficient and liberalizing as possible. The differences
in level of development and size of participating economies will be taken
account of in the negotiations in order to ensure that the smaller countries
within the hemisphere will be able to equally benefit from the ensuing
trade liberalization.
During the negotiations elements of civil society will have the possibility
to make their views known on issues to be negotiated, as well as on the
important relationship between trade and the environment and on labour
issues as they may affect trade. A committee of government representatives
will provide the link between the input from interested sectors of society
and the negotiators on these issues.
A Summary of the Key Elements in the San Jose Declaration Time Frame
The FTAA negotiations were initiated during the Second Summit of the
Americas, on April 18 and 19, in Santiago de Chile. They will be concluded
no later than 2005. Concrete progress in the form of agreement on specific
business facilitation measures is to be reached by the year 2000. The Trade
Negotiations Committee is to meet for the first time no later than June
30, 1998, and the nine negotiating groups are to begin their work no later
than September 30, 1998.
Structure of the Negotiations
The FTAA negotiations will be carried forward under a structure agreed
through the year 2004. The structure is both flexible and ensures wide
geographical representation by the participating countries through a rotation
of both the Chairmanship of the process, the site of the negotiations themselves,
and the responsibility for the various negotiating groups. Negotiations
will be structured in the following manner:
Chairmanship of the Negotiations: will rotate every 18
months, or at the conclusion of each Ministerial Meeting. Those countries
which have been designated to exercise the function of Chair of the FTAA
process for successive 18-month periods are: Canada; Argentina; Ecuador;
and Brazil and the U.S.A. (jointly).
Trade Negotiations Committee (TNC): will be responsible
for the oversight of the negotiations. This Committee will be composed
of Vice-Ministers for Trade. The Committee will meet no less than every
18 months. The Chairmanship of the TNC will be held by the Chair of the
FTAA process.
The Negotiating Groups established are (1) market access
(chaired by Colombia); (2) investment (Costa Rica); (3) services (Nicaragua);
(4) government procurement (U.S.A.); (5) dispute settlement (Chile); (6)
agriculture (Argentina); (7) intellectual property rights (Venezuela);
(8) subsidies, antidumping and countervailing duties (Brazil); and (9)
competition policy (Peru). The Chairman and Vice-Chairman of each group
of the nine groups have been selected for an initial 18-month period, and
subsequent chairs will be selected after this time, with the aim of ensuring
geographic balance during each period of responsibility.
A Consultative Group on Smaller Economies was created,
open to the participation of all the FTAA countries. This group, chaired
by Jamaica, will report to the TNC and have a rotating chairmanship.
Venue of the Negotiations: established on a rotating basis.
Three countries will serve as hosts to the negotiations, namely: The United
States (Miami) for three years; Panama (Panama City) for two years; and
Mexico (Mexico City) for two and a half years, or until the conclusion
of negotiations.
Administrative and Substantive Support: The negotiations
will be supported administratively through the creation of an Administrative
Secretariat, located in the same site as the meetings of the negotiating
groups. The Secretariat will be funded by a combination of local resources
and the Tripartite Committee institutions.
Technical and analytical support for the negotiations will be provided
by the three institutions of the Tripartite Committee, namely the Organization
of American States (OAS), the Inter-American Development Bank (IDB), and
the United Nations Economic Commission for Latin America and the Caribbean
(ECLAC). These institutions will also provide technical assistance related
to FTAA issues, particularly for the smaller economies of the hemisphere.
Input by Civil Society into the Negotiations: Governments
in the Western Hemisphere have committed to transparency in the negotiating
process. For this purpose they have agreed to create a Committee on Civil
Society, in order to facilitate the input of the business community, labour,
environmental, and academic groups, who wish to present their views on
the issues under negotiation and on trade matters in a constructive manner.
The FTAA is the first major trade negotiation where such a group has been
established at the outset of the negotiations, and this is therefore a
unique feature of the FTAA process. Providing technical assistance to the
process has been the Tripartite Committee, which consists of the IDB, the
OAS and the ECLAC. Experts from these institutions have been developing
compendia and data bases on a variety of trade policy issues.
1 This
appendix is extracted from the Free Trade Area of the Americas Website
at www.ftaa-alca.org