The Wall Street Journal
Commentary
During the Cold War, the U.S. persevered to extend the opportunities of
liberty to all lands. Yet the new seeds of liberty can only flourish if we
overcome another division -- no longer between East and West -- but instead
between North and South. Today, from El Salvador to South Africa, we have the
chance to employ free trade to help fulfill President Bush's commitment to
include all the world's poor in an "expanding circle of development."
The administration has taken a big step toward that goal today by notifying
Congress of our intention to begin negotiating a Southern African Free Trade and
Development Agreement, or SAFTDA, with South Africa, Botswana, Lesotho, Namibia,
and Swaziland. These path-breaking negotiations follow on the heels of our new
talks with five nations in Central America and with Morocco. By the end of this
year, we hope to have completed free trade agreements with Chile and Singapore.
And the president just announced an "Enterprise for Asean" initiative to create
a framework for possible free trade agreements with countries in Southeast
Asia.
The United States is employing the momentum gained from the passage of the
Trade Act of 2002 in global, regional, and bilateral negotiations to further
open today's big markets -- in Europe, Japan, China, and Australia -- for
America's farmers, workers and businesses. Yet President Bush has directed that
we also reach out to the many developing countries struggling to gain an
economic foothold. These are the growth opportunities of tomorrow.
As part of the new Trade Act, we have just implemented amendments opening an
estimated $20 billion of tariff-free trade from developing economies. In the
World Trade Organization, we are pushing to open agricultural markets vital to
growth in developing nations and to employ the flexibilities in the
international intellectual property rules to help poorer countries deal with
epidemics such as HIV/AIDS. We are pursuing negotiations with developing
countries in our own hemisphere to create the world's largest free trade zone,
the Free Trade Area of the Americas.
The new American trade agenda serves our security interests. The offensive
against terrorism requires fresh thinking about how to tackle the global
challenges of poverty and privation. To be sure, the source of terrorism is not
poverty; to believe that is an insult to people all over the world who struggle
daily to overcome hardships. Terrorism's roots lie in a deep evil and fanatic
ideologies. But there is no doubt that societies that fragment, that are poor,
that have no sense of hope, become fertile grounds in which terrorists can
burrow. So all of us have a stake in development and democracy.
By knitting America to peoples beyond our shores, new U.S. trade agreements
can encourage reforms that will help establish the basic building blocks for
long-term development in open societies, including:
-- The rule of law: Trade agreements encourage the development of enforceable
contracts and fair, transparent governance -- helping to expose corruption.
-- Private property rights: These are a necessary ingredient for economic
development because they encourage saving, investment, exchange and
entrepreneurship. Trade agreements bolster property rights by safeguarding the
right to establish businesses, guaranteeing that investments will not be
appropriated arbitrarily, supporting privatization, and fostering knowledge
industries.
-- Competition: Free trade fosters competition, the hallmark of successful
economies. Developing countries suffer at the hands of elites who cling to their
positions by depriving ordinary citizens of less-expensive, better-quality goods
and services that can be had through competition. Free trade agreements attack
manipulated licensing systems, state monopolies and oligarchies that keep
affordable products off store shelves.
-- Sectoral reform: Trade agreements drive market reforms in sectors ranging
from e-commerce to farming. For example, in our FTA discussions with Morocco, we
are examining how we can work with Morocco's World Bank program to restructure
its agricultural sector. The U.S. has also advanced an aggressive agriculture
reform proposal in the WTO negotiations that would eliminate $100 billion
globally in trade-distorting farm subsidies and lead to better agricultural
policies in developed and developing countries alike.
-- Regional integration: The lesson of the European Union and Nafta is that
location matters, in economics as in politics. Therefore, as we prepare for free
trade agreement negotiations with democracies in Central America and Southern
Africa, we will explore how we can support beneficial regional integration and
promote growth clusters.
-- Joining trade with aid: This year, the U.S. is spending $638 million to
help developing countries build the capacity to take part in, implement, and
fully benefit from trade negotiations. The USAID and the Inter-American
Development Bank have been our cooperative partners in this new thinking about
trade, aid, and development.
Ultimately, free trade is about freedom. This value is at the heart of our
larger reform and development agenda. Just as U.S. economic policy after World
War II helped establish democracy in Western Europe and Japan, today's free
trade agenda will both open new markets for the U.S. and strengthen fragile
democracies in Central and South America, Africa, and Asia.
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Mr. Zoellick is the U.S. Trade Representative.
