PRESENTATION AT THE 3rd FORUM OF THE GREATER CARIBBEAN

1
PRESENTATION AT THE 3rd FORUM OF THE GREATER
CARIBBEAN

• Mr. Roberto Peña

2
WHAT IS THE FTAA?

• The Free Trade Area of the Americas, FTAA, whose
  initiative was conceived by President George
  Bush, and communicated to the 34 Heads of State
  meeting in Miami at the end of 1994, is aimed at
  creating a free trade zone that will encompass
  the entire continent from Alaska to Tierra del
  Fuego beginning in 2005 seeking to favour the
  gradual removal of barriers to trade and
  investment in the region.

3
FTAA

• The Free Trade Area of the Americas is the most
  important economic integration project undertaken
  by the continent in its history. The process has
  developed consistently from all indications it
  seems that the political decision has been
  consolidated.

4
FTAA

• American countries have never been this close in
  union as they are right now. With new
  communications and transportation technologies,
  the physical distances that once isolated nations
  have been reduced, thereby creating basic
  conditions for trade integration in the
  hemisphere.
• The task now, is to overcome the obstacles that
  still make this integration difficult. The
  discussions to create the FTAA (Free Trade Area
  of the Americas) seek solutions to the challenge
  of progressively integrating economies in
  different stages of development.

5
FTAA

• FTAA negotiations are currently entering a
  critical phase the countries and various
  integration blocs in the region will have to take
  crucial decisions in order to advance in
  consolidating the hemispheric market.
  

6
FTAA

• The principal objective of the FTAA is
• ACHIEVE GREATER WELLBEING AND PROGRESS FOR ALL
  AMERICAN CITIZENS, as part of a complete mission
  for the political, economic and social future of
  the continent.
• The FTAA is governed by four fundamental
  principles

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FTAA

• Preserve and strengthen the democratic community
  of the Americas.
• Promote prosperity through economic integration
  and free trade.
• ERADICATE POVERTY AND DISCRIMINATION IN THE
  HEMISPHERE.
• Ensure sustainable development and preserve the
  environment for future generations.

8
FTAA

• According to the decision adopted by the Heads of
  State of the 34 countries and ratified at the 3
  Presidential Summits held thus far, the FTAA will
  be established not later than 2005.
• The final characteristics of the FTAA will be
  determined through negotiations with the official
  representatives of the Governments of the 34
  participating countries.

9
FTAA

• The principles and objectives that guide the
  efforts and negotiations to create the FTAA are
  
• The agreement must be balanced, comprehensive,
  consistent with the WTO and will constitute a
  single under taking.
• It will take into account the needs, economic
  conditions and opportunities regarding smaller
  economies.
• Negotiations must be clear and will be based on
  decisions adopted by consensus.
• The FTAA can coexist with bilateral and
  sub-regional agreements, in so far as the rights
  and obligations under such agreements are not
  covered by or surpass the rights and obligations
  of the FTAA.

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STRUCTURE, ORGANISATION AND NEGOTIATING SYSTEM

• The FTAA is structured according to the following
  levels
• Presidential Summit.
• Meeting of Ministers responsible for Foreign
  Trade.
• Business Forum to draft recommendations for the
  Ministers.
• TNC Trade Negotiations Committee.
• Negotiating Groups.

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PRESIDENTIAL SUMMITS

• Three Presidential Summits have been held to
  date
• The First took place in Miami, in December 1994
  where the 34 democratically elected leaders of
  the 34 countries of the Western hemisphere agreed
  to immediately begin the process to create the
  FTAA. The Summit resulted in the signing of the
  declaration of principles entitled Partnership
  for Development and Prosperity Democracy, Free
  Trade and Sustainable Development in the
  Americas.

12
PRESIDENTIAL SUMMITS.

• The Second Presidential Summit was held in April
  1998 and the main focus of the meeting was
  Education as a factor of development and growth
  and included topics such as the fight against
  drug trafficking.

13
PRESIDENTIAL SUMMITS.

• The Third Summit was convened in Quebec, Canada,
  in April 2001.
• During the course of this meeting, the dates
  agreed to by the FTAA Ministers during the
  negotiation phase were reiterated. It highlighted
  the emphasis placed on the democratic clause,
  which provides that any member country without a
  rule of law, will not be allowed to participate
  in the trade agreement.

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MINISTERIAL MEETINGS

• Six Ministerial Meetings have been held to date
• The first was held in June 1995, during which 7
  Working Groups were established in the areas of
  Market Access, Customs Procedures and Rules of
  Origin, Investment, Standards and Technical
  Barriers to Trade, Sanitary and Phytosanitary
  Measures, Subsidies, Antidumping and
  Countervailing Duties, as well as the Working
  Group on Smaller Economies.

15
MINISTERIAL MEETINGS

• The Second Ministerial Meeting took place in
  March, in Cartagena, when four other Working
  Groups were formed for government procurement,
  intellectual property rights, services and
  competition policy.
• In the declaration of Cartagena, the Ministers
  recognised the importance of the role played by
  the private sector and its participation in the
  FTAA process.

16
MINISTERIAL MEETINGS

• The Third Meeting was held in May 1997, in Belo
  Horizonte, and formed a Preparatory Committee
  comprising 4 Vice Ministers of Trade and
  expressed the need for a temporary Administrative
  Secretariat to be established.

17
MINISTERIAL MEETINGS

• The Fourth Ministerial Meeting, considered one of
  the most significant, took place in March 1998,
  in San José de Costa Rica. On this occasion, the
  Ministers recommended to the Presidents that
  negotiations commence for the creation of the
  free trade area. The Trade Negotiations Committee
  (TNC) was formed at the Vice Minister level
  during that meeting, as well as 9 negotiating
  groups and the consultative group on smaller
  economies.

18
MINISTERIAL MEETINGS

• The Fifth Ministerial Meeting on Trade was held
  in November 1999, in Toronto, during which the
  negotiating groups were asked to prepare a draft
  text of their respective issues before the
  Ministerial conclave in April 2001, while the TNC
  was called upon to commence discussions on the
  general structure of the FTAA agreement.

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MINISTERIAL MEETINGS

• The Sixth Ministerial Meeting was convened in
  Buenos Aires in April 2001. The Ministers
  formally received the first draft of the FTAA
  agreement and in an unprecedented decision, they
  agreed to publish this draft in the four official
  languages. They also recommended to the Heads
  that during the Third Summit of the Americas,
  they should set the guidelines for ensuring that
  the FTAA negotiations conclude not later than
  January 2005 and strive for it to enter into
  force no later than 2005.

20
BUSINESS FORUMS

• The six Americas Business Forums held thus far,
  have been aimed at formulating from a business
  perspective, recommendations and alternatives for
  reaching consensus on issues that would influence
  the official negotiations being conducted in the
  context of the FTAA.

21
BUSINESS FORUMS

• The Forums include 2 basic concepts for their
  organisation
• Reports must be supported by the business
  entities represented in each country within the
  hemisphere.
• The topics to be addressed in the Forum must
  coincide with the agenda of the negotiating
  groups of the FTAA.

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HOW DO THE FORUMS OPERATE?

• Through a Special Committee, the organising
  country fixes the dates and periods for
  execution this must coincide with the Meeting of
  the Trade Ministers of the Continent.
• Among the dates, a period of approximately 90
  days is fixed in advance, in order for the
  business organisations of the 34 countries to
  submit to the Organising Committee their reports
  and recommendations, in each of the working
  groups.
• Based on all the reports received and through a
  technical group, the Organising Committee
  arranges the agendas for the discussion, which
  will be debated and analysed during the three
  days of the Forum.

23
BUSINESS FORUMS

• Each Workshop authority is obligated to present
  at the end of the discussion, the recommendations
  made regarding each of the topics covered within
  the period of negotiations.
• The recommendations of the 12 Workshops are
  submitted personally to the Trade Ministers of
  the 34 countries, at a joint meeting of the
  business sector and the Ministers.

24
BUSINESS FORUMS

• It is worth reporting, in this point, that one of
  the primary objectives of the meeting held in
  Quito, is to ensure that following the Business
  Forums, the resulting recommendations obtained by
  the Ministers would become discussion notes in
  each of the Government Negotiating Groups.

25
BUSINESS FORUMS

• Six Business Forums have been held to date The
  First Forum was convened in December 1995, during
  which one of the greatest concerns expressed was
  to improve physical infrastructure in the
  Americas in order to facilitate the economic
  development of the region.

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BUSINESS FORUMS

• Second Forum 1996, Cartagena de Indias. This
  Forum was organised in 4 Committees
• Trade strategies in the FTAA.
• Opportunities for the private sector in the
  construction and functioning of infrastructure.
  
• Globalisation of the production process, human
  resource development and
• Corporate responsibility.

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BUSINESS FORUMS

• Third Forum 1997, Belo Horizonte. The
  entrepreneurs took part in the 12 Workshops that
  analysed their most specific aspects and more
  than 200 recommendations were formulated and
  presented to the Trade Ministers of the FTAA, so
  as to guide the efforts of the members of the
  working groups.

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BUSINESS FORUMS

• Fourth Americas Business Forum 1998, San José.
  Discussions were based on 221 positions presented
  by private sector organisations from 17
  countries.
• This Forum put forward approximately 210
  recommendations on a wide range of issues
  including business facilitation measures.

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BUSINESS FORUMS

• Fifth Americas Business Forum 1999, Toronto
  More than 800 business leaders convened in
  Canada, with the main focus on connecting the
  Americas in order to make progress in the
  negotiations as well as increase links at all
  levels and improve the possibility for
  partnership between the private and public
  sectors.

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BUSINESS FORUMS

• Sixth Americas Business Forum, 2001, Buenos
  Aires This event represented a qualitative step
  in creating the stages of the negotiations.
  During this Forum, a first draft of the FTAA
  agreement was presented, resulting from the
  compilation of the draft texts prepared by the
  negotiating groups.
• In the conclusions, this Forum called for greater
  participation from the private sector as the
  subject of and driving force behind international
  business, in decision making on the part of
  governments and in the negotiation,
  implementation and application processes of the
  FTAA.

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BUSINESS FORUMS

• As a result of the resolutions emanating from the
  different meetings of Heads of State, Foreign
  Trade Ministers and Business Forums, presently
  there are 9 Negotiating Groups and 3 Consultative
  groups
• NEGOTIATING GROUPS Market access, investment,
  services, government procurement, dispute
  settlement, agriculture, intellectual property
  rights, subsidies, antidumping and countervailing
  duties, as well as competition policy.

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BUSINESS FORUMS

• CONSULTATIVE GROUPS Smaller economies,
  participation by the civil society and
  E-Commerce.
• The negotiating groups have been working
  permanently at the Administrative Secretariat of
  the FTAA, which is currently operating in Panama
  City and should be subsequently transferred to
  Puebla in the Mexican Republic. Its final
  headquarters is yet to be decided.

33
BUSINESS FORUMS

• The results of the negotiations conducted by this
  group are analysed by the TNC, which meets
  between 2 and 3 times per year. The resolutions
  adopted by the TNC are sent to the Ministerial
  Meeting where the final decision is taken.

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ADVANTAGES AND DISADVANTAGES FOR DEVELOPING
COUNTRIES IN THE AMERICAS

• It is worth reiterating the fundamental
  principles that inspire the creation of the Free
  Trade Area of the Americas
• Firstly preserve and strengthen the democratic
  community in America.
• Promote prosperity through economic integration
  and free trade.
• ERADICATE POVERTY AND DISCRIMINATION IN THE
  HEMISPHERE.
• Ensure sustainable development and preserve the
  environment for future generations.

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ADVANTAGES AND DISADVANTAGES OF THE FTAA

• In other words, through its different mechanisms,
  the FTAA seeks to improve the standard of living
  of all citizens of the 34 democratic countries of
  the Americas.
• The main force behind the achievement of these
  goals is economic integration and free trade.
• In order to have an idea of the magnitude of the
  issue that we are discussing, I would like to
  provide some basic statistics that have been
  included in the FTAA negotiations.

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INFORMATION ON COUNTRIES

• Population 783 million.
• Trade Represents 20 of international trade.
• Gross Domestic Product 40 of Global GDP.
• The GDP of the countries that constitute the FTAA
  exceeds the 30 recorded for the countries of the
  European Union.
• The GDP of the countries that constitute the FTAA
  reaches 11 thousand billon dollars.
• The GDP of the FTAA is divided as follows

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INFORMATION ON COUNTRIES

• 77 United States
• 7 Brazil
• 5 Canada
• 4 Mexico
• 3 Argentina and barely
• 4 corresponds to the remaining 29 countries.

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TRADE AMONG THE CARIBBEAN, CENTRAL AMERICA AND
THE REST OF THE WORLD
39
TRADE AMONG THE CARIBBEAN, CENTRAL AMERICA AND
THE REST OF THE WORLD
40
TRADE AMONG THE CARIBBEAN, CENTRAL AMERICA AND
THE REST OF THE WORLD
41
TRADE AMONG THE CARIBBEAN, CENTRAL AMERICA AND
THE REST OF THE WORLD
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ECONOMIC STATISTICS ON SEVERAL AMERICAN COUNTRIES

• COUNTRY GDP EXPORTS
• United States US9,152,098
  million US695,715 million
• Brazil 751,505 million
  48,011 million
• Mexico 483,734 million 136,703
  million
• Guatemala 18,215 million 2,398
  million
• Costa Rica 15,148 million 6,577
  million
• Dominican Rep. 17,398 million
  5,200 million
• Jamaica 6,889 million 1,131
  million
• Trinidad and Tobago 6,869 million
  2,240 million
• Haiti 4,302 million 196
  million

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UNITED NATIONS STATISTICS ON POVERTY INDICES AND
ILLITERACY

• COUNTRY POVERTY INDEX ILLITERACY
• Costa Rica 23.7 4.5
• Mexico 10.1 8.9
• Brazil 22.0 15.1
• Dominican Rep. 20.6 15.8
• El Salvador 48.3 21.7
• Nicaragua 50.3 31.8
• Guatemala 57.9 31.9

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ANALYSIS OF INFORMATION

• By examining all this information, we can truly
  recognise the positive impact that the
  implementation of free trade agreements in the
  Americas could have in our various countries.
• It is evident that the result of implementing
  this new scheme is based on the goodwill and good
  judgement of the United States in sharing their
  market and progress with the other American
  countries.

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ANALYSIS

• Efforts should be made toward reducing the
  dependency that most of us American countries
  currently have on the trade policy of the United
  States, while equal and fundamentally diversified
  treatment should be sought among all countries of
  the continent.

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ANALYSIS

• It should also be understood that the Free Trade
  Area of the Americas is not only a commercial
  opening, that is to say, to eliminate tariff
  barriers, but also constitutes
• Complete integration, by utilising all types of
  services from any American country, and by
  integrating the agricultural sectors, the
  intellectual property sector and many others,
  which will result in the true opening up and
  integration of the 34 countries.

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ANALYSIS

• Among the greatest advantages that will be
  presented to all countries by this Free Market
  Area, is the immense market of approximately 800
  million persons for any type of product from the
  region.
• It will enhance communications, thereby allowing
  countries to experience improved technological
  development.
• It will attract a considerable flow of
  investments to different countries and for this
  we must be prepared.
• Many services will be significantly improved in
  numerous countries.
• A great disadvantage is that if negotiations
  result in unfair situations, the productive
  sectors in many small economies will be simply
  eliminated, thus creating serious social
  problems, especially unemployment in various
  countries.

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ANALYSIS

• It is crucial that during the time remaining for
  the agreement to enter into force, all
  governments must make the necessary internal
  adjustments to their economic and legal policies,
  and particularly their competitiveness, so as to
  perform successfully in this new free trade area.

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ANALYSIS

• Consequently, the entrepreneurs of all countries
  of the Americas and the Caribbean must be
  vigilant and participate actively, together, with
  the authorities of each country in the
  negotiations being conducted, which will come to
  an end in 2005.
• I take this opportunity to once again invite the
  entrepreneurs of the Greater Caribbean to
  participate in the 7th BUSINESS FORUM, which will
  take place in Quito, Ecuador, on October 29-31,
  where we will have a chance to learn a bit more
  about the status of the negotiations and

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ANALYSIS

• express our opinions on the different issues
  that will be discussed.
• In closing, I would like to make a fervent appeal
  to all the productive sectors of the countries
  present here today, to recognise the importance
  of the FTAA in the future economic development of
  our countries.
• Having visited several countries to promote the
  7th AMERICAS BUSINESS FORUM, I have personally
  witnessed the disregard shown for or the little
  importance paid to this issue by the large
  business sectors.