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US Economic Policy towards Latin America

12 May 2017Essay Samples

Introduction

The economies of the Western Hemisphere were decided to be united into a single free trade agreement at the Summit of the Americas, held in December 1994 in Miami. The Heads of State and Government of the 34 democracies in the region decided to build a Free Trade Area of the Americas, or FTAA, in which the embargo on trade and investment was decided to be progressively eliminated, and complete negotiations for the agreement by 2005. The leaders decided that the FTAA negotiating course is crystal clear and take into account the differences in the levels of growth and size of the economies in the Americas, in order to ease full contribution by all countries.

The fight against terrorism, which has assumed global proportions, has of late over shadowed the development. Latin American countries have not been the exception to this trend in any sense, wooing the United States with anti-terrorism compliance and taking benefit of the state of affairs to suppress national opposition and reinforce personal power. Further increase in arms and other changes were incorporated in the region. (Simon Helweg-Larsen, 2002)

Analysis of Economies of Latin America

The analysis of economies of Latin America countries, in the light of recent developments can be described as under; This year’s aid package to countries nearby Colombia will provide a 220 percent increase over 2000-2001 averages in military aid to Panama, a 144 percent increase for Venezuela, 345 percent for Brazil, and between 20 percent and 82 percent increases for Bolivia, Ecuador and Peru. Security and intelligence gathering will continue to increase this coming year, whether in the name of the war on drugs, the war on terrorism, or just old-fashioned military spending. (Economic Perspectives, 2002) In adding together the military spending, the war on terrorism has permitted the United States to add to role in Latin American and to overturn human rights environment on military support.

The Bush administration’s new height of prejudice for security, for Latin America would most likely interpret to a negative response to let go military activities in the increasing conflicts of the Andean area. The U.S.A has been supplying aid to support the cause of human rights and also punishing the violators by prohibiting the funding of individuals or organizations believed to be involved in human rights violations. These” cuts backs” in fact serve as an instrument to advance the long-term policy of U.S.A. in the region.

Pros & Cons of Forming Free Trade Area

The Free Trade Area of the Americas provides opportunity and holds an attraction for many businesspeople throughout the Western Hemisphere. They believe that the FTAA's ultimate objective of free movement of goods and services throughout the region, combined with the highest standards for protecting investment and intellectual property rights, presages a much-improved hemispheric business climate. They are sure that the FTAA, combined with continued regulatory and fiscal reform and sound macroeconomic policies, can help promote economic increase, capitalist chance, and job formation, and can widen affluence among all 34 countries.

Free Trade Area

In November 2002, the United States and Brazil assumed the co-chairmanship of the final phase of the Free Trade Area of the Americas (FTAA) negotiations, to reach agreement on creating a single free trade area stretching from Alaska to Argentina. The economies of the Western Hemisphere were decided to be united into a single free trade agreement at the Summit of the Americas, held in December 1994 in Miami. The Heads of State and Government of the 34 democracies in the region decided to build a Free Trade Area of the Americas, or FTAA, in which the embargo on trade and investment was decided to be progressively eliminated, and complete negotiations for the agreement by 2005.

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Features/Pros & Cons Following are few features of establishing the FTAA;

All countries will have frequent inter action with each other, decisions will be taken by consensus, and negotiations will be conducted in a transparent manner;

The FTAA will have opportunities to not only go consistent with WTO rules and disciplines, but also improve upon these rules and disciplines and appropriately expand its business;

The FTAA can coexist with bilateral and sub-regional agreements and countries may negotiate and accept the obligations of the FTAA individually or as members of a sub-regional integration group; and
Special attention will be given to the needs of the smaller economies.

It stresses the importance of trade liberalization in the Americas to boost economic growth and strengthen the ties that unite the region's 34 democracies.

Policies via the Free Trade Area of the Americas (FTAA) can help the countries of the region "finish the job" of becoming viably competitive economies.

The FTAA can translate into even broader benefits, by making the entire hemisphere available for sourcing inputs and selling products without penalty, the region-wide trade area will help make companies based in the Americas more competitive than ever on a global scale.

Under an FTAA, virtually all of the tariffs will be eliminated -- either immediately or over phase-out periods ranging up to 10 years from the agreement's projected entry into force in 2005.
The full potential of the FTAA however could not be realized. The negotiators have still not addressed number of areas beyond trade and investment, such as the need for dependable law enforcement and independent judiciaries.

The FTAA negotiations have had a star-crossed history. Each summit meeting has been followed by serious financial crises in the region that have called into question the viability of the FTAA talks.

Description: NAFTA

North American Free Trade Agreement: NAFTA was established on January 1994 and now has an extensive real life record. NAFTA's proponents promised that the pact would create new benefits and gains in each of these areas that are engaged in the agreement. The benefits ¬of 200,000 new U.S. jobs from NAFTA per year, higher wages in Mexico and a growing U.S. trade surplus with Mexico, environmental clean-up and improved health along the border ¬have failed to be materialized as was earlier promised at the time of inception of the set up. However, after eight years, NAFTA seems to have failed to basic test of all: a simple do-no-harm test, due to which conditions have deteriorated instead of improving.

Description: Recent / Current Efforts to Form Free Trade Area

In a recent development a number of key decisions were made regarding the FTAA negotiations at the sixth Ministerial meeting, held in Buenos Aires, and at the Third Summit of the Americas held in Quebec City on 11 April 2001, where draft text of the FTAA was presented for approval. The Ministers in the conference in an unparalleled move designed to add to the transparency of the course, recommended to their heads of State and Government to make this text available to public.

Resultantly the draft FTAA agreement was made available to the public in all four official languages on July 3, 2001. Ministers underlined the need to promote conversation with Civil Society, and the summaries of the second round of Civil Society submissions in response to the open invitation were agreed to be placed on the FTAA Website. Ministers highlighted the significance of the provision of technical help to smaller economies to ease their participation in the FTAA.

In a current development the deadlines were fixed for the conclusion and execution of the FTAA Agreement. Talks are to be completed no later than January 2005; entry into force will be sought as soon as possible thereafter, no later than December 2005. (Second Draft FTAA Agreement, 2002)

Description: Effects of Current US Policy

The current US policy has varying effects on Latin Americas. The attacks on the United States changed the course of world politics at a time for Latin America when economic and political crises were looming in many countries and had erupted into disaster in others. Indeed, the prevailing attitude within Latin American diplomatic circles prior to September 11 was one of concern over looming crises and aggravation at U.S. breakdown to pay notice to those countries in need. Argentina seemed to be the clearest case: the country was in economic ruins with serious political instability, but the dominant attitude from financial institutions to the north was one of weathering out the storm.

It should come as no surprise, then, that the immediate response from officials across Latin America to the September 11 attacks was visible support for U.S. anti-terrorist measures as countries jumped on the opportunity to win favor and attention from the North. Approximately 6 million people of Arab descent live in Latin America, and they immediately began to feel the heat from Latin American countries as well as the U.S. The “Triple Frontier” border area of Argentina, Brazil, and Paraguay, home to one of the largest Arab concentrations in Latin America has “come to resemble Casablanca during World War II, with local intelligence and law-enforcement agencies being joined by a number of U.S. counterparts, as well as Israel’s Moss ad and the German and Spanish secret services.”(Scott Otteman , 2002) In short freer trade has long been a centerpiece of U.S. policy in the Americas, not only to boost economic growth but also to strengthen the ties that unite the region's 34 democracies,

Conclusion

The Free Trade Area of the Americas provides opportunity and holds an attraction for many businesspeople throughout the Western Hemisphere. They believe that the FTAA's ultimate objective of free movement of goods and services throughout the region, combined with the highest standards for protecting investment and intellectual property rights, presages a much-improved hemispheric business climate. They are sure that the FTAA, combined with continued regulatory and fiscal reform and sound macroeconomic policies, can help promote economic increase, capitalist chance, and job formation, and can widen affluence among all the Latin American countries.

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