For over sixty years, in response to the Smoot-Hawley tariffs that triggered the Great Depression, America led the effort to open foreign markets and increase US and global prosperity. Concerted, bipartisan leadership has helped spur a period of increased global commerce nearly unprecedented in world history. Systematic US leadership has helped to bring global tariffs down from an average of 40 percent at the end of WWII to under 5 percent, leading to a ninety-fold increase in world trade.

Within the Americas, US leadership during the 1990s with regard to free trade and open economies provided the example and often the inspiration for countries to open their elections to their people, to open their borders to competition, and to transform their economies to benefit their citizens. The US' neighbors in Latin America provide a remarkable case in point: Democratic institutions have been built, expanded and consolidated as a consequence of economic modernization and trade liberalization.

Nevertheless, since the passage of legislation to implement the Uruguay Round of the General Agreement on Tariffs and Trade in 1994 and the subsequent founding of the World Trade Organization to replace the GATT, the United States has made a marked turn backward from the global trade liberalization effort.

Persistent lip service notwithstanding, this "backsliding" has been painfully apparent to the nations of the Americas, where, since 1994, the US has been long on pronouncements and short on follow-through. Consequently, political will to sustain the course in Latin America has begun to show signs of flagging.

A few examples of the pronouncement/ results dichotomy of US trade policy in recent years would include:

• Negotiations begun with Chile for an FTA in 1994 are still ongoing in 2002.
• The promise of NAFTA "accession", complete with a "to do" qualifying list of economic reforms, has faded from memory, despite a number of qualifying countries in Latin America.
• Passage of the recent US Farm Bill creates significant and direct impediments to the recent announcement of negotiation of a US-Central America FTA.
• The President of the United States still does not have "trade negotiating authority" which allows the Executive to agree on the rules of negotiation with the Congress, consult with Congress on the tenor and substance of negotiations, then return to Congress with the completed agreement for an "up or down" vote on the entire package without amendment.
• Having squarely placed the concerns of organized labor and the environmental movement into the trade agreement negotiating process, the US has failed to pursue compromise legislation that would break the deadlock over how to treat labor rights and environmental protection in the process, with the result being trade policy gridlock.
• The US Congress allowed the Andean Trade Preferences Act to lapse, causing unnecessary disruptions in markets for cut flowers and other Andean goods. The ATPA was designed to create incentives for Andean nations to produce alternative crops to coca and other illegal narcotics.

The negotiation of an FTAA and the web of sub-regional commercial agreements that were a dynamic feature of the late 1990s in Latin America are the fundamental building blocks of the Bolivarian Dream -- an economically, commercially and politically integrated Latin America. However, there is no "Bolivarian Dream" without a Simon Bolivar to dream it -- and lead the process. In order to achieve the goals of the FTAA, the Americas will need Bolivarian leadership, political consensus and political will, and commitment.

According to the assessments of the final panel of this seminar, leadership, consensus and commitment are on the wane as we approach the end-game of the FTAA negotiation process. The panel addressed the topic of the politics of regional integration. Commentary ranged from the proscriptive (i.e., Where should we go from here?) to the diagnostic (How do we get there from here?) to the prognostic (Is FTAA relevant, politically feasible, and/or necessary?)

The panel began with the premise that no matter how solid the economic theory and no matter how good negotiators are at drafting a comprehensive trade agreement, the key to getting a "Free Trade Area of the Americas" agreement is in the politics of the equation. The deterioration of the political consensus in Latin America, the sloppiness of the US process to gain good-faith trade negotiating authority, and the fragility of Latin American political institutions confronting domestic constituencies exhausted with the neo-liberal economic model and free trade negotiations framed the panel discussion.

Dr. Frederick Mayer, Duke University

Reviewing the current state of play in Latin America, Professor Frederick Mayer of Duke University finds that the panoply of current economic and political distractions in Latin America may be creating more inertia than momentum for the completion of FTAA negotiations.

The integration process within Latin America is well advanced through bilateral and multilateral FTAs and customs unions; the country most removed from the process is the United States, which has one hemispheric trade agreement, the NAFTA. Further, the FTAA process, which has put the concerns of civil society, labor and environmentalists on a parallel but relatively disconnected track to the negotiations, may simply not be the correct vehicle for handling the new politics of trade. This is particularly evident in instances where the above interested parties have, in many cases, taken to the streets to halt the "globalization" process that they see in every free trade agreement negotiation.

The new politics of trade, Dr. Mayer argues, have spawned a number of critical issues on the political agenda, but which have not made it into the FTAA trade negotiation agenda:

• First and foremost are social issues, such as migration, labor rights and labor flows, environmental protection and sustainability, human rights and democracy.
• Further, not only has the political landscape changed markedly in the US, but there remains no compelling vision as to why an FTAA is important to US interests. No longer are trade matters in the hands of "elites" and protectionists who make comprehensive tradeoffs; as was noted during the discussion, trade policy has become an arena where disparate interests like "Ross Perot, Ralph Nader and Flipper" have come together to stifle policy.
• Third, the circle of players in the trade policy game has changed dramatically -- and now includes an anti-globalization movement worldwide using the global connectivity of the Internet and embracing the politics of ideology, in the US, Latin America, and around the world.
• The debate over negotiation and passage of NAFTA was the seminal event in this transformation of players in the trade policy arena; proponents of free trade appeared not only to lose interest in the issue after NAFTA, but also to lose confidence in their ability and their desire to shape and drive the new politics of trade. Opponents have captured the high ground and the issues, and have stalemated the entire process of trade policy development. The cynicism and peril inherent in a 215-214 "victory" for so-called "Trade Promotion Authority" in the US House of Representatives is clear evidence of the need for a re-examination and a paradigm shift in trade policy and politics.
• Finally, "free trade" per se is not enough. US business leaders, and for the most part, Latin American political leaders, have not embraced the reality of the new issues and new players in the game. Until that happens, the political will necessary for completing the FTAA anytime soon won't exist.

Philip Potter, the NAFTA Institute

Philip Potter, President and Executive Director of the Washington-based NAFTA Institute, posited that US trade policy is at an impasse as the historical bipartisanship in trade policymaking has evaporated. Unwieldy sentence: US trade policy appears to be looking at a massive train wreck (instead of light at the end of the tunnel) in the aftermath of the current debate, passage and now conference committee deliberations on Trade Promotion Authority. TPA is the current euphemism for what was once known as "fast-track" trade negotiating authority, which the Executive Branch has been lacking since the end of the WTO passage in 1994. Potter's paper goes on to review in detail this policy impasse, to look through the lens of recent history of trade policy deliberations in the Congress, and to a detailed look at opposition strategies to any trade policy. Potter also proposes methods for re-educating the American public on the importance of international trade to the US economy.

Key issues in this paper include:

• The cause of the US trade policy impasse is the inadequate political consensus in the US as to how to deal with the benefits and losses associated with open trade -- i.e., fairness between winners and losers.
• Traditional proponent lobbying strategies by the business community and by successive US administrations to push trade agreements through Congress are bankrupt given the reality of the loss of an inherent centrist, pro-trade majority in the Congress.
• Opposition to any trade legislation has become both articulate and highly organized at the grassroots level. Since the NAFTA pro-trade victory, the opposition has never left the field of battle, continuing the mythmaking process that has become "truth" over time, without virtually any effort by trade proponents to systematically counter the myths.
• An examination of voting patterns on trade legislation since NAFTA show that the moderate pro-trade Democrats (particularly in the House of Representatives) have disappeared into thin air. Without such a bipartisan center, trade legislation has been doomed to partisan politics, new special interests and cynical attempts to create highly partisan bills.

Potter recommends four specific approaches to getting the free trade debate back on track in the United States, including:

1. Serious, bipartisan legislation that would deal with job assistance for those whose jobs are disrupted by international trade (including wage insurance and healthcare benefits), beyond the traditional "trade adjustment assistance" that accompanies nearly all trade legislation in the US;
2. Agreement on core labor standards through a parallel process already begun in the FTAA process;
3. Adoption of "safe harbor" provisions in multilateral trade agreements such as the WTO as well as the FTAA, that would provide incentives for enforcement of multilateral environmental agreements; and
4. A systematic trade education process amongst the US public on the real effects of trade, good and bad. Proponents can also use the power of the Internet for dispersion of information; the Internet is not reserved for the exclusive use of trade opponents and the anti-globalization community.

Dr. Kenneth Roberts, University of New Mexico

Dr. Kenneth Roberts, Associate Professor and Chair of the Department of Political Science at the University of New Mexico, presented a paper on the "Political Challenges to Neo-liberalism and Economic Integration in Latin America" to round out the panel discussions.

Dr. Roberts' analysis of the Latin America scene in relation to the FTAA integration process reveals a combustible mixture of fragile institutions, weak popular representation and increasing social and economic inequality as major threats to market-based economic integration.

The trend of democratization in Latin America sparked a new ethos of international cooperation and the adoption of an economic model that bound the region together through increasing trade ties and capital flows -- the economic counterpart to collaborative political ventures. Mercosur, the Southern Cone common market scheme, is an excellent example of unprecedented political collaboration, even as economic success has been more fleeting. Roberts points out a number of domestic Latin American trends that bode ill for the integration process currently underway, including:

• Domestic political foundations are shallow, deficient and insecure. The ferment of discontent rising to the surface after ten years of living under the neo-liberal development model is nowhere more apparent than in the reaction to the economic meltdown in Argentina, and in the election of old-style populists like Chavez in Venezuela.
• The transition from the import-substitution model of the 1960s-70s to the neo-liberal economic development model of the late 1980s-present was accomplished with the accompanying institutionalization of the model in Latin America.
• Thus, the implementation of the open market approach to economic development has been driven by elites in Latin American society re-phrase the following: as opposed to the building of new institutions or the transformation of existing institutions.
• Without institutionalization, the social deficits -- poverty and inequality -- have only deepened as the economic miracles of liberalization have passed by the majority of the population in Latin America. Thus, change has occurred disconnected from the reality of civil society.
• The reemergence of populist leaders like Chavez in Venezuela demonstrated clearly that the fruits of liberalization have not been distributed equitably. The "have-nots" are embracing democracy not to support the neo-liberal politicians, but rather to elect those who tell them what they want to hear, whether or not those populist platforms can delivered.

Whither the FTAA Process?

Since 1992, US trading partners in Latin America have negotiated over 30 free trade and investment pacts without the participation of the US. The pace of these negotiations has been astonishing and the process will continue -- intra-Latin America trade liberalization proceeds apace. At the global bargaining table today, the US is embarrassingly silent because of our inability to act. Certainly, in Latin America, US influence in the process it inspired in the aftermath of the Summit of the Americas in 1994 is quickly waning.

Equally disturbing as the lack of US leadership in the ongoing process is the apparent backsliding by US policy officials and the Congress on their own commitments. The interminable debate over trade negotiating authority during the past 8 years has been at best disheartening to the economic liberalization process in the Americas. Chile has now waited almost ten years to complete an FTA with the US; in the interim, Chile has negotiated FTAs throughout Latin America and in Asia and Europe. Requests by Argentina and Venezuela for "NAFTA accession" have been relegated to the dustbin of institutional memory among US trade negotiators. The "trade promotion authority" bill now winding its way through a Congressional conference committee may contain just enough protectionist verbiage about the sanctity of US unfair trade practices laws as to make the bill subject to Presidential veto. Election year trade sanctions on imported steel have infuriated the US's trading partners in Latin America. The current US administration's announcement of its intent to negotiate an FTA with the nations of Central America was immediately followed by one of the largest subsidy-laden US farm bills in recent memory; such subsidies would damage the ability of the economies of Central America to compete should an FTA every become reality. Finally, as the US actively "monitored" the situation in Argentina over the past year, the Argentine economy experienced an unprecedented meltdown that appears to have not stabilized at this writing. Unlike the "enlightened self interest" shown in the Mexican crisis of 1994-95, the US appeared either unwilling or uninterested in demonstrating leadership to help stabilize the Argentina situation.

With this dismal track record in mind, is it any wonder why leaders -- and their constituencies -- in Latin America would be questioning the value of forging ahead with the difficult negotiating and political process of the Free Trade Area of the Americas? In point of fact, most of the liberalization of the FTAA has already been accomplished within Latin America during the past ten years. Participatory democracy has flourished alongside economic modernization. Recent economic and political events in Latin America -- including the Argentine meltdown and political mess left in its wake, the abortive coup against Hugo Chavez in Venezuela, violent public protest against privatization efforts in Peru -- as well as the general economic slowdown worldwide, the expanding anti-terrorist war, and the anti-globalization movement are indeed sobering events to the euphoria of the last few years. Elected officials ignore such trends at their peril.

The world will not stop its dynamic evolution to wait for the US to get back in the game. The "stop the world" claim that the US can somehow continue, much less improve, its economic strength and leadership while retreating on trade is bad economics and worse public policy. No one should believe you can pull international trade and investment from the forces propelling our economy and expect to maintain constant growth.

The world does not appear to stop and wait for anybody, anymore. Brazil, the European Union, Mexico, Chile, China, Canada, Japan and others are rapidly forging commercial agreements with emerging markets. The President of the United States still does not have authority to negotiate new trade agreements, and Latin America's leaders are appearing impatient for some leadership and commitment. Some 95% of the world's consumers live outside US borders. Ironically, denying the US President the ability to negotiate to protect and expand American commercial interests will not modify any trade agreement, will not save any job, will not shield any worker or business from the winds of technological change, will not train any worker for the jobs of the future, will not clean up our environment.

The Americas have gone a long, long way down the road of free trade negotiations and economic reforms. The FTAA has been the framework under which 34 nations of the Americas have sought to create and manage the rules and obligations of free trade and investment amongst themselves. The panel concluded with recommendations to keep this process going so that what has already been gained is not lost to exhaustion, ennui or worse, inattention.