Free Trade Still Matters

The story of the Free Trade Area of the Americas, since President Clinton unveiled the proposal in Miami in 1994, is one of collective dissatisfaction. From the Mexican economic crisis that same year, which sent the issue to the back burner, to last November’s inconsequential meeting of trade ministers in Miami, the vision of a hemisphere-wide free-trade zone remains elusive.

It’s been argued that the World Trade Organization’s September meeting in Cancun put the last nail in hemispheric free trade’s coffin. There, 22 Third World countries demanded -- and did not get -- an end to unfair farm subsidies in the United States, Europe and Japan. Cotton prices worldwide have declined by more than 60% since 1995, for example, largely because of nearly $4 billion in subsidies paid to overproducing U.S. farmers.

The clash at Cancun also exposed rifts between the United States and Brazil, the two largest countries in the hemisphere. In spite of this, both countries have made progress on bilateral and regional agreements.

The United States and Chile now have a bilateral free-trade agreement, and a pact between the U.S. and four Central American nations awaits ratification by Congress.

Brazil, Argentina, Uruguay and Paraguay, the four countries that form the trade group called Mercosur, have signed an economic cooperation agreement with the five countries of the Andean region -- Bolivia, Colombia, Ecuador, Peru and Venezuela.

Any larger vision remains hung up on U.S. subsidies, which Congress is unlikely to change in an election year. Brazil too carries some blame, clinging to its own agricultural subsidies and in past talks refusing make concessions on issues vital to the United States, including rules pertaining to investment and intellectual property.

Farm subsidies and tariffs prevent the expansion of global wealth by half a trillion dollars. That amount, according to the World Bank, could lift about 150 million people from poverty within a decade.

The heads of 34 nations of the Western Hemisphere are meeting next week in Monterrey, Mexico. So far, trade is not on the agenda. It should be, if only to formally extend the 10-year deadline for a hemispheric agreement beyond the December 2004 cutoff. The goal is still worth pursuing.