Bush Pledges to Help in Argentine Crisis

President Bush on Wednesday said the United States will help Argentina survive its financial crisis, but only if the new leaders in Buenos Aires adopt a “sound and sustainable” economic strategy.

Bush also said the administration is interested in negotiating a free-trade agreement with five Central American countries, a process that could produce results even if broader trade talks fail.

In his most extensive remarks yet on Argentina’s troubles, Bush pledged U.S. assistance in efforts to help the government of President Eduardo Duhalde restructure the country’s economy and renegotiate its debts. Duhalde took office Jan. 2.

“The United States is prepared to help Argentina weather this storm,” Bush declared in a speech to the World Affairs Council. He added: “Once Argentina has committed to a sound and sustainable economic plan, we will support assistance for Argentina through international financial institutions.”

Bush also called on the nations of the Western Hemisphere to “strengthen our commitment to market-based reform, not weaken it.”

“Shortcuts to reform only lead to more trouble,” Bush said. “Half-measures will not halve the pain, only prolong it.”

In announcing efforts to reach a Central American trade pact, Bush signaled that the administration is determined to push for expanded trade on multiple fronts.

The proposed agreement would include Guatemala, Honduras, El Salvador, Costa Rica and Nicaragua, which together have about 34 million citizens and account for $9 billion in U.S. exports.

If successful, the talks would in effect expand the North American Free Trade Agreement, even if separate negotiations to create a hemispheric free-trade area are derailed by Argentina’s economic crisis or other countries’ reluctance to sign up. NAFTA eliminates tariffs and other impediments to trade among Canada, Mexico and the United States.

“Today, I announce the United States will explore a free-trade agreement with the countries of Central America,” Bush said. “Our purpose is to strengthen the economic ties we already have with these nations, to reinforce their progress toward economic and political and social reform and take another step toward completing the Free Trade Area of the Americas.”

The U.S. already is negotiating a free-trade agreement with Chile and has helped launch a new round of global trade talks under the auspices of the World Trade Organization.

Gary Clyde Hufbauer, senior fellow at the Institute for International Economics in Washington, said Bush was sending a strong message to “foot-draggers” such as Brazil, which has not been eager to enter into a hemispheric pact. “It’s a bold move,” he said.