FTAA: Call for Flexibility for Smaller Economies; Chile Considers New Trade Agreements

21 December 1998

Jamaica's Ambassador to the U.S. Richard Bernal last week called for flexibility in negotiating the hemispheric Free Trade Area of the Americas (FTAA), which would link 34 economies from the Yukon to Patagonia by 2005. Mr. Bernal chairs the FTAA negotiating committee on small economies designed to give voice to Caribbean and Central American countries in FTAA negotiations. Speaking to the 22nd Annual Miami Conference on the Caribbean and Latin America last week, Mr. Bernal outlined a negotiating approach which would allow negotiators to agree on a
core agreement between the 34 countries, but under which each nation could determine separately the speed at which it could reach FTAA liberalisation goals. This would allow developed economies to move more rapidly toward trade liberalisation while affording developing economies the necessary time to adjust to liberalisation. Mr. Bernal also called for a differentiated timetable for regional dispute resolution to account for the limited resources available to smaller economies.

In other regional news, Chilean Finance Minister Eduardo Aninat confirmed rumours that the U.S. may finally begin negotiations to bring Chile into the North American Free Trade Agreement (NAFTA, between the U.S., Mexico and Canada). The idea of NAFTA-expansion was launched four years ago at the first Summit of the Americas when the U.S. vowed to extend NAFTA to include Chile. To date, the U.S. has not been able to build domestic support for this expansion, including the Clinton Administration's inability to secure fast track negotiating authority. Meanwhile, Chile has come into its own as an economy, forging alliances with South America's trading power, the Southern Cone Common Market (MERCOSUR, which comprises Brazil, Argentina, Paraguay and Uruguay), and separate agreements with Canada and Mexico. Chile has launched free trade negotiations with the EU.

Meanwhile, Chile's director of trade negotiations last week said that Chile and South Korea are working furiously to begin negotiating the first tans-Pacific free trade agreement early next year. Annual trade between Chile and South Korea currently amounts to US$1.6 billion.

"Flexibility is called key to FTAA acceptance," JOURNAL OF COMMERCE, December 15, 1998; "Chile, Korea explore trans-Pacific trade deal;" "Reports say US may talk with Chile about joining NAFTA," JOURNAL OF COMMERCE, December 16, 1998.

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