As the topics discussed at this conference reflect, there are many factors at work in hemispheric integration, among them economic forces, information flows, and migration patterns. But to a very large extent, the degree and form of integration is a function of the politics of hemispheric integration, as it is played out in domestic, international and transnational arenas.

Hemispheric integration both influences and is influenced by policy choices on immigration and citizenship policy, security cooperation, environmental regulation, fiscal and monetary policy, labor standards, and, most obviously, trade and investment. The project to create a Free Trade Area of the Americas (FTAA) is the most significant policy choice on the horizon and the most visible expression of hemispheric integration. And it is an intensely political choice.

I will focus in this brief paper on the FTAA process, the core issues at stake, the nature of the political contest over those issues, and the obstacles presented by the current political pattern. My contention is that there is a new politics of trade, distinctly different from the pattern that had dominated in the last part of the 20th Century. The new politics is characterized by the linkage of new issues to the trade agenda, including most notably social regulatory issues regarding labor and environment, the emergence and engagement of new actors in trade policy making, particularly groups in an increasingly transnational civil society, and by a new mode of political engagement, which is less a politics of interests than a politics of identity. I will argue, in concluding, that there is a disconnect between the politics of integration and the FTAA policy making process. More specifically, the traditional structure of the FTAA negotiation is an inadequate vehicle for handling the new politics of trade.

Three Choices

Negotiations to create an FTAA in the Western Hemisphere are now well advanced. A draft text is on the table, and while full of brackets shows fairly clearly the likely form of the final agreement. Negotiators continue to aim at completing their work by the 2005. But the apparently inexorable progress of the negotiation masks some major choices still to be made.

The first choice is the fundamental one: Will there be a hemispheric free trade agreement? Although every country in the hemisphere but Cuba has been participating the FTAA negotiations, and has expressed a commitment to a hemisphere agreement, all have simultaneously been involved in one or more sub-regional agreements, which have created a patchwork quilt of regional accords. In the North, first Canada and the United States entered into an FTA, and five years later Mexico joined to create NAFTA. The United States has subsequently extended NAFTA benefits to the Caribbean Basin, entered into a preferential arrangement with the Andean nations, and is now negotiating with Chile. In the South, Argentina, Brazil, Uruguay and Paraguay formed the Mercosur, and are now in negotiations to add Chile. In the middle, the Andean nations have their own agreement. Meanwhile, Chile, Canada, and Mexico have pursued bilateral agreements throughout the hemisphere.

At one level it may seem that the decision to enter a hemispheric agreement has already been made. Certainly there is some level of commitment to the project. But the depth of that commitment, and the willingness, at the end of the day to make the kind of concessions that will be required to reach agreement, has not yet been tested. The United States as of this writing does not yet have authorization from Congress to negotiate, although it may soon get it. It is, at this point, distracted by its War on Terrorism. Other countries in the region also have some hesitation. Argentina is preoccupied with its internal problems. Brazil is skeptical about the real benefits to it. Venezuela's government is far from enthusiastic. In sum, there may be bit more inertia than momentum than initially meets the eye.

The second choice, or more accurately set of choices, concerns the issues now under negotiation. It is one thing to agree, in principle, to free trade and investment. In practice, however, trade negotiations are often about the extent of allowable deviation from free trade. The FTAA is no different. Some of the toughest sticking points involve these traditional issues. The United States, for example, while rhetorically committed to free trade, shows signs of insisting on something a good deal less than that for certain agricultural products, textiles and apparel. The TPA bill passed by the House last December, for example, obligates the president to maintain protection for almost 300 products, mostly agricultural, and directs him to insist on exemptions for certain apparel items. Given that these are just the products that much of Latin America would like to export to the United States, this is problematic. Responded Brazil's President Cardoso, "If the conditions are taken literally, it means there will be no FTAA."¹ Recent decisions by the Bush Administration to impose tariffs on steel, and reported promises to US textile manufacturers, have done little to give confidence throughout the region. In addition to these issues in the market access negotiations, other chapters likely to cause difficulty include financial services, intellectual property and investment. The investment chapter may be particularly difficult, given the furor that has arisen about the effects of NAFTA's Chapter 11 provisions, and the international campaign against the proposed Multi-lateral Agreement on Investment (MAI), which force abandonment of those talks in 1998.

Were these the only issues to be resolved, establishing an FTAA would be problematic enough. But beginning with NAFTA, the trade agenda has become politically linked to a set of other, broader, social issues including labor and environment that have traditionally been the exclusive domain of domestic politics. The linkage is now inescapable, and compels policy makers to make a choice: whether and how to incorporate these social issues into the trade agreement.

There is no easy choice here. To date, the negotiations have largely excluded these matters, focusing entirely on the traditional stuff of trade negotiations: market access, investment, services, and the like. The social issues have been relegated to an advisory committee on civil society. No NAFTA-style side agreements are contemplated. As I will discuss next, there are intense political pressures on both sides of the issue. On the one hand, most of the governments of Latin America have been strongly resistant to the inclusion of "side issues" in the FTAA negotiation, fueled in part by Mexico's perception of having been abused by the NAFTA side negotiation process. Business interests, not surprisingly, share this perspective. On the other hand, an ever-widening circle of actors in the civil society are insisting on their inclusion. How these pressures are managed will determine not only the question of the side issues, but in all likelihood the future of the FTAA itself.

The New Politics of Trade

To understand the context in which the FTAA is being negotiated requires understanding the way in which the political landscape for trade negotiations has changed over the last decade. Most notably, the landscape now includes a much greater involvement of civil society groups, many of whom now operate transnationally, who are able to influence international negotiations through domestic political processes.

For the last fifty years in the United States and Canada, and since the mid-80s in the rest of Latin America, there had been a near consensus on the virtues of free trade among the relatively small circle of elites who made trade policy. The policy problem for these elites was how to wean protected industries from the comforts protection provided by tariffs, quotas, subsidies and the like. Because these protected industries often were and are politically powerful in domestic arenas, governments struggled to make good on their commitments to free trade. For this reason, free trade agreements were a useful device for restraining the protectionist impulses of domestic politics. By linking many issues at once, governments could dismantle protections they could never sell on their own.²

This old politics of trade remains a part of the landscape. As noted above, textiles and apparel, agriculture, steel and other sectors continue to have sufficient clout to limit free trade, even in the context of a free trade agreement. But the ranks of industrial protectionists have thinned considerably. The growth of multi-national corporations and transnational production networks has transformed the political economy of trade. Now, the vast majority of the business community supports free trade, even in its own sector. Multinationals have become, in Milner's phrase, forces for "resisting protectionism." ³ If the old politics of trade were the sole dynamic at work, there would be few obstacles to reaching free trade agreements.

Beginning with the battle in the United States around the NAFTA agreement (or perhaps in Canada with the FTA), however, a new politics has arisen around trade, which involves new issues, new players, and new dynamics and which greatly complicates the landscape for trade agreements. The new politics has not fully supplanted the old, but it is increasingly important and is ignored at their peril by policy makers.

I have already discussed briefly the new issues and documented elsewhere their rise during the NAFTA contest.⁴ During the NAFTA, a new connection was forged between trade and environment, labor, and other social issues. To be sure, some of the links were not entirely new-labor matters have long been a minor part of trade agreements-but the connection with environment, health and safety, and other regulatory matters was unprecedented. The supplemental agreements on labor and environment, negotiated at the insistence of the United States during the first year of the Clinton Administration, while limited in scope and real impact, nonetheless established a precedent for linkage.

The concerns raised by opposition groups in the NAFTA included fears that more lax environmental and labor regulation in Mexico would lead businesses to relocate there and create downward pressures on US and Canadian regulation. The side agreements focused on designing mechanisms to ensure national enforcement of national environmental and labor regulations, so that lax enforcement not serve as an enticement to businesses interested in evaded costly or inconvenient regulation. These issues remain on the agenda, but the experience of NAFTA has also raised new issues, most notably those related to Chapter 11, which deals with investors. The issue, put briefly, is that NAFTA created a new international dispute mechanism in which private investors have standing to initiate cases if they believe that their rights as investors have been violated by national governments. The controversy has arisen because investors have successfully used this international venue to challenge national environmental policies on the grounds that those policies violated their rights as investors.

Simultaneous with the broadening of the agenda has come a dramatic widening of the circle of players engaged in the politics of trade. When the NAFTA negotiations were first proposed in the summer of 1990, trade policy in the United States, Canada, and Mexico was the concern of only a tiny circle of activists outside of the trade experts who normally made policy. By the spring of 1991, when fast track authority was authorized by the US Congress to negotiate the NAFTA, several dozen environmental, labor, and citizens groups had one or more staffers on the beat. By the time of the passage of NAFTA in 1993, the numbers of organizations in the civil society engaged in the contest over NAFTA had grown to more than 100, and the capacity of the opposition groups to mobilize political pressure had reached the point that only a concerted effort by the business community and the Clinton Administration sufficed to win passage of NAFTA.

Since NAFTA entered into force in 1994, the number of groups in the civil society engaged in trade and related matters has continued to grow, and has become increasingly international. As was clearly on display in Seattle in 1999, in Washington in 2000, and in Quebec City in 2001, there is now an extensive network of hundreds of activist organizations operating across national borders, part of what has become a transnational social movement in opposition to globalization. The capacity of civil society groups to engage on trade matters has grown exponentially. Their influence may still be greatest in the United States, where the capacities of these groups are most developed and where the role of the US Congress in trade policy making provides a accessible pressure point for influencing policy, but democratic governments throughout the hemisphere are not immune from their influence. One should not over-estimate the power of the opposition movement: the circle of activists remains only a fraction of total population, opposition to "globalization" masks considerable differences within the coalition, and most nations' policy making processes remain relative insulated from populist pressures. But trade policy can no longer be made quietly.

Finally, along with the broadening of the agenda and the widening of the circle has come a change in what I have called elsewhere the mode of politics. Whereas once trade politics could be viewed as largely a manifestation of interest politics, increasingly it has become a matter of symbolic or identity politics. Again, the politics of NAFTA were a harbinger of the transformation. During the NAFTA battle in the United States, opposition to NAFTA became less a matter of choices made in accordance with narrowly defined self-interest than a response to the symbolic construction of NAFTA. In the rhetoric of opposition, NAFTA became a conspiracy of multinational corporations (and their agents in government) against workers, the environment, even democracy itself, and opposition became not so much a matter of self interest as of doing the right thing.

Since NAFTA came into force in 1994, the record has not borne out the dire predictions made by its opponents. Nevertheless, views about NAFTA have hardly moderated in the opposition community, to the point where the slogan "No more NAFTA's" requires no further explanation, so thoroughly negative is the symbolic connotation of NAFTA.

As the "new social movement" literature in sociology has argued, symbolic constructions may well be necessary to frame issues in ways that motivate individuals to engage in collective action. Certainly, the broader coalition of opposition to globalization, or what its opponents commonly refer to as "corporate globalization," depends to a great extent on a construction of "globalization" in which free trade agreements are part of pattern of corporate domination of the World Bank, the IMF, the WTO and the other major instruments of global economic governance. This kind of framing helps account for the ferocity of the much of the opposition and makes it more difficult for proponents of free trade agreements, including the FTAA, to deal with it.

Before considering the implications of this changed political landscape for the FTAA project, I should note two other factors that have diminished enthusiasm among proponents, which further complicates the political prognosis. The first, and most obvious, is the distracting context of the events of 9/11 and America's ongoing obsession with its war on terrorism. Clearly, despite an attempt to revive the trade agenda, indeed to frame it as a national security measure, the current focus is more on security than on trade. How long this will last is hard to predict, but as of this writing conflict in the Middle East seems to be spinning out of control, and there is every reason to believe the US will be focused on security matters for some time. Second, and perhaps more long-lasting, there are signs that the simplistic adherence to liberal economic formula for development may have run its course, and no longer stands as the consensus among policy elites. Closer examination of the economic record in developing countries, as exemplified in the work of Dani Rodrik, Joe Stiglitz, and others, has begun to call into question the wisdom of draconian structural adjustment. As a consequence, there is a subtle diminishing of enthusiasm for free trade agreements.

Taken together, political forces in the civil society opposed to narrow free trade agreements and the loss of momentum on the part of proponents who support them, call into question whether at the end of the day there will be sufficient political support for a FTAA.

The Policy-Politics Disconnect

At the eye of the gathering political storm, the FTAA negotiations proceed apace, and would appear to be on track to conclude by the 2005 deadline. The negotiators have now produced a single negotiated text, albeit one with an enormous number of brackets around text not yet agreed upon. From a technical negotiation standpoint, while there are many significant issues remaining to be negotiated, there would appear to be no insurmountable obstacles to agreement. But the apparent progress is something of an illusion. There is a fundamental disconnect between the technical negotiation process and the larger political context in which it is taking place. Unless the two are joined, there is reason to doubt whether in the end the FTAA will succeed.

The structure of the FTAA negotiation does not permit it to address labor, environment, and other social issues directly. Although the Clinton Administration pushed for negotiating groups to work on these issues, it met with considerable opposition from Latin American countries, whose governments tended to view these issues as largely smokescreens for protection, and who were impressed by the Mexican account of having been abused by the NAFTA side negotiation process. As a consequence, these issues have been shunted off to a Committee of Governmental Representatives for Civil Society, which has only a limited mandate for collecting input from civil society groups (including business interests, much to the dismay of opposition groups) and transmitting it to the negotiators. Most activist groups appear to view this as wholly ineffective, nothing more than a "suggestion box" approach in the words of one opponent. As a consequence of this structure, there is no prospect of NAFTA-like side agreements on environment and labor being a part of the FTAA, or other mechanisms that would begin to satisfy critics in the civil society.

The current strategy represents something of a gamble: that the forces in the civil society pressing for a broadening of the free trade agenda do not yet have sufficient clout to derail a more narrowly defined free trade agreement. The gamble is not wholly unreasonable: historically, free trade has generally prevailed in these encounters. In the United States, President Bush has already managed to get fast track authority (now renamed "trade promotion authority" in an attempt to limit the negative symbolic resonance of "fast track") through the House of Representatives, which in the NAFTA presented by the biggest obstacle to implementation of the agreement. There is still reason to believe that TPA will also eventually prevail in the Senate. Civil society groups generally have less ability to influence policy choices in other countries of the region. So it is possible that a narrowly defined trade agreement can negotiated and ratified by the countries of the region over the objections of the civil society.

Yet, in the end I think this is a bad bet, one that runs very serious risks of failing. One obvious place it could fail is in the United States. This is the same bet the President Bush senior made in 1992, when he did not do much to address the concerns of labor and environment. That NAFTA would not have made it through the US Congress. But for the last minute retrofit of NAFTA pushed through by President Clinton in 1993, NAFTA would have failed. Moreover, although it is true that Bush won the fast track vote in the House last December, it was won on the narrowest of margins, one vote, and then only after arm twisting and deal making, including some deals, as already noted, that could compromise the ability to reach an agreement. It was won by a president in his first year of office, riding an extraordinary wave of public sympathy following the terrorist attackes in the fall and enjoying the highest approval ratings in modern history. This was no resounding victory. The Senate has not yet followed suit, and although most observers expect that it will based on the generally greater support for free trade in that body, with Democratic control that is by no means a certainty. But even if Bush gets authority to proceed, he will do so without the support of the centrist bi-partisan coalition that has historically backed free trade agreements. Without that support, an agreement that came to the Congress without appearing to deal with the social issues raised by free trade's critics, will be extremely vulnerable.

Conclusion

What, then, is to be done? It is difficult to be precise. Given that the free trade train has gone far down the track it is on, it will be difficult to shunt it to another. Perhaps only when it becomes apparent that there is a train wreck in the making will minds be sufficiently concentrated to redirect the course of the negotiation. One way or the other, however, more will have to be done to address the issues that have been forced onto the agenda by forces in civil society. This will require a softening of positions by business interests, and by governments who have thus far strongly opposed a more inclusive approach. And it will take leadership on the part of the United States.

Endnotes

1. Gazeta Mercantil Online, "Cardoso criticizes fast track legislation," December 11, 2001.

2. For an analysis of this dynamic in the NAFTA negotiations, see Frederick W. Mayer, Interpreting NAFTA: The Science and Art of Political Analysis, [New York: Columbia University Press, 1998], especially Chapter 5.

3. Helen Milner, Resisting Protectionism

4. Mayer, 1998.