It is an honor for me to speak immediately after President Berger
and right before you hear from former President Rodriguez. These two leaders are friends of the
United States and valued partners in employing trade as a way to spread prosperity and
bolster democracy in our hemisphere.
I am pleased to see that you will also be hearing from my friend
Secretary Derbez of Mexico. The partnership between the United States and Mexico through NAFTA
over the decade is a model that I hope will help guide us throughout the
And I want to compliment the Council on organizing a special
congressional program tomorrow. As all of you know, under the U.S. Constitution, Congress has
authority over trade, so the Administration’s active agenda depends on the leadership of
Members who recognize the stakes in expanding trade, openness, opportunity and hope throughout the
Never has there been a more important time to unite the Americas
in open trade and growing prosperity. Many of our hemisphere’s democracies are young and
fragile -- struggling with the legacies of civil war, dictatorship, one-party rule, and
self-defeating populism. Latin America has to compete in a global economy that includes 2.3 billion
people in China and India, both of which pose opportunities of growth, but also the challenge of
I am pleased that the signs of continuing strong growth in the
United States should create a better context for gains throughout Latin American. Yet will Latin
America be well positioned to benefit fully? Also, this has been a period of liquidity in
international financial markets, which has made it easier for Latin American economies to manage their
debt and strengthen their financial posture. Latin America needs to be positioned to seize
the opportunity of the next upswing in global growth while also contending with the
For me, the importance of uniting the Americas into a democratic
and free-trading hemisphere is not a theory or a dream – for I have seen the expanding reality,
but also encountered the attacks on the stewards of democratic prosperity.
When I traveled to Colombia in 2002 for President Uribe’s
inauguration, I stood in the Presidential Palace when terrorists targeted that building with
mortars. The explosions were a stark reminder that the opponents of reform are not far off in the
distant past or even in the distant mountains, nor are they far away from plunging their
nations into the chaos of social disintegration, economic breakdown, and isolation from the world
But I also saw that day the resilience of those who work for
freedom, democracy, and economic reform.
That very morning, in one of President Pastrana’s last official
meetings, I met Colombian flower growers and other business people who were building a stronger
economic foundation in their nation by seizing the trade opportunities offered by the extension
and expansion of the Andean Trade Preferences Act we passed in 2002.
Months later, I was back in Colombia to meet with President Uribe
again, this time to discuss the elements of a comprehensive U.S.-Colombia FTA. President Uribe’s
focus on leading his country to a more prosperous and peaceful future made clear that
the desperate acts of a few who cling to dead ideas will not be allowed to derail what we and our
partners in this hemisphere are seeking to build.
I also found when I want back to Colombia that President Uribe,
like many of his fellow hemispheric leaders, shares President Bush’s vision of a “world
that trades in freedom.” It is a global vision where the poorest and richest, the weakest and the
strongest, are united in shared interests, common rules, and resurgent economic growth.
Opening trade and integrating markets in the Americas are central
to that vision. And if we work together, the Americas can become a proving ground for the
long-term global ambition of a world without trade barriers.
The power of tearing down walls is on display in Chile, where an
FTA with the United States went into effect a little over four months ago. On January
1st, the effect became obvious for an Chilean driving past a car dealership. Signs had gone up around
the country touting the removal of the auto tariff and the reduction of a luxury tax on imported
Chileans did not ignore the new opportunity represented by those
signs. According to the American Chamber of Commerce in Santiago, auto imports to Chile in
the first two months after the FTA went into effect jumped by over 90% compared to the same
months last year. DaimlerChrysler predicts its exports from the United States to
Chile will grow by 45% for the full year.
There is more good news. The AMCHAM also reports double digit
growth in exports of trucks, auto parts, turbojets, turboprops and turbines, as well as
self-propelled machinery and mining equipment. Fertilizer sales jumped from $100,000 to $3.2
What does that mean in real-world terms? Consider one company
headquartered here in the United States, Caterpillar, that doubled its sales to Chile in the
first quarter of this year: Caterpillar employed 668 more people in the United States this
March than it did last October. Caterpillar attributes those opportunities to its growing sales,
not just in Chile, but around the world.
Caterpillar’s success is not just good news for the United States.
As Caterpillar was exporting and creating jobs here, the company increased its overseas
employment as well.
The United States has also benefited from the growth of Chile’s
exports. Chilean exports of produce jumped by $40 million in the first two months of 2004,
with expanded sales of everything from frozen blueberries to fresh plum-like sloes.
Exports of gold, iron, and molybdenum increased $16 million and exports of wood products
added another $9 million.
Of course, two months of trade data are not conclusive, but they
do suggest a big step up in trade between the United States and Chile. Soon this is likely to become
an unnoticed everyday part of life in both countries. U.S. consumers will not notice they are
buying a high-quality alpacablend suit. Chilean families watching “The Emperor’s New Groove” –
which, incidentally, mentions the warmth and quality of alpaca garments – won’t even
think about the fact that Disney’s intellectual property is now better protected in their
country. It is that kind of win-win outcome that will turn the vision of a free-trading America and a
free-trading world into a shared dream and a shared enterprise.
That is why we are pursuing a three-prong approach to opening
trade in the Americas. We have been moving forward with highly ambitious, individual or
sub-regional Free Trade Agreements; with the Free Trade Area of the Americas; and with the global Doha
round of the WTO. By working from all three directions at once, we are creating a
dynamic of competitive liberalization that gives each effort a greater chance of success.
The FTAA has been a target for trade expansion efforts in the
hemisphere for a decade. We have worked hard to make it a reality because integrating the whole
region will clearly have a greater impact than just freeing the two-way trade between the U.S. and
our Latin neighbors. Nevertheless, many challenges remain and the decisions are not
just up to the United States.
We have been taking a practical approach, which we sought to
outline at the Miami Ministerial last November. We understand the hemisphere’s 34 democratic
nations are vastly different with unique sensitivities and needs. The outline allows all nations to
buy into – and benefit from – a common set of rights and obligations in a two track approach,
while a path remains open, for the nations that want to be more ambitious, to do so within the
Since Miami a lot of work has been done to define the “common
set.” The current phase may take some time, but once we work through it, I expect the process
will elicit a new dynamic to become a driver of trade, economic reform, and development for the
Americas. In the meantime, the United States is not standing still: We are creating important
building blocks for free trade in the Americas through our bilateral and sub-regional
NAFTA celebrates its 10th anniversary this year. NAFTA has
been a resounding success. Trade among the United States, Canada, and Mexico has more than doubled,
amounting to $1.3 million per minute. Booming trade and closer integration with the United
States helped Mexico weather and then recover from a currency crisis.
NAFTA has locked in Mexico’s free-market reforms and bolstered the
nation’s democracy. For the United States, NAFTA was one of the contributors to the
record-setting economic expansion of the 1990s. The unique advantages of each of the three NAFTA
partners is fostering greater productivity in the region and giving all three partners a
competitive edge in the global marketplace.
At last October’s NAFTA Ministerial meeting in Montreal, our three
countries initiated a comprehensive effort to ever deepen our integration: We are
seeking to streamline, and, in some cases, eliminate special NAFTA rules of origin. This step will
better equip manufacturers in all three countries to compete in the global marketplace and will
increase the attractiveness of North America to inward investment.
As our area of free trade expands to Central America, we also are
exploring the possibilities for cumulation of inputs in the textile and apparel sector among both
NAFTA and CAFTA countries -- as a way to enhance the competitiveness of our industries and
workers in this hemisphere in a new environment of post-quota textile trade next year.
Of course, we did not want to rest with adding Chile to our
Canadian and Mexican free trade partners. As all of you know, we are exceptionally proud to have
completed our free trade negotiations with Costa Rica, El Salvador, Guatemala, Honduras,
Nicaragua, and the Dominican Republic. I recall when working as Undersecretary of State from
1989 to 1992 how our relations with that region were dominated by war, guerillas, death squads,
and arms shipments across borders. Now we are partners with six democracies that want to
share trade, prosperity, and hope across those same borders. Together we need to explain the
historic stakes of the CAFTA to Members of Congress.
Throughout the 20th
Century, there has been a sad pattern of
civil and economic breakdown in Central America that draws in the United States, which gets burnt,
patches up the problems, and then turns its back – until a new crisis arises. We can break this
cycle. We must break it -- by enacting CAFTA.
And President Bush is relentless in the continuing drive for free
trade. Last week we launched free trade talks with Panama. Later this month we will begin talks
on the Andean FTA. I am pleased to announce today that officials of Peru and Ecuador will
be joining Colombia in those negotiations. We have been working intensively with Peru and
Ecuador to address a range of preparatory issues especially concerning investment disputes and
the protection of worker rights. While some important work remains, we are now in a position to
welcome all three countries to the negotiating table. And we hope to include Bolivia at a later
stage, and we are working with Bolivia to increase its readiness.
Adding together Canada, Mexico, Chile, Central America, the
Dominican Republic and the Andeans we are well along a path to open trade that will cover
two-thirds of the hemisphere’s population and non-U.S. GDP.
In order to seize the full potential of our trade agreements in
the hemisphere, we are making trade capacity building an integral part of the process. CAFTA is
the first trade agreement that formalizes this effort, through the establishment of a Committee
for Trade Capacity Building – a concrete step to continue the focus on integrating trade policy
and development policy, which fosters economic growth and accelerates the alleviation of
A core component of the U.S.-Andean FTA is an effective initiative
to build capacity in the Andean countries to negotiate, implement and benefit from the FTA.
I am pleased to announce today that the Board of Directors of the Overseas Private
Investment Corporation (OPIC) has approved - - subject to Congressional notification provisions - -
a $54 million loan for a major micro-financing initiative targeted to benefit Colombia, Ecuador,
Peru and Bolivia (in addition to other countries).
The BlueOrchard Microfinance Securities Project will serve
thousands of new entrepreneurs - - particularly women - - who understand the crucial importance of
credit to enhance their quality of life and to get a start in small business. The project will
help fuel job creation and economic growth in these countries and help provide tangible and early
benefits from the FTA negotiations. The BlueOrchard project will be the first global
micro-financing funding vehicle to access U.S. capital markets.
We have partners in this effort. The Inter-American Development
Bank, the World Bank, and the Organization of American States are helping. I would like to
thank in particular my friend, IDB President Enrique Iglesias, for his personal involvement and
leadership. The private sector has joined our effort as well with a new group called The Business
Coalition for Capacity Building, which includes companies such as Microsoft, the Gap,
Citigroup, and Proctor & Gamble.
Of course, the Americas must prevail in a growing global economy.
In the WTO, the United States has pressed to re-energize the Doha round of negotiations.
Our goal is clear: 2004 should not be a lost year for the Doha Round.
First, we sought to set a high standard for the Doha negotiations
by laying out very ambitious goals: to eliminate all global tariffs on consumer and industrial
goods by 2015; to make substantial cuts in farm tariffs and trade-distorting subsidies;
to eliminate agricultural export subsidies; and to create a broad opening of services markets.
Second, after the breakdown of last September’s Cancun meeting, we
spoke some plain truths about the approaches that would and would not make it possible to
draw together 147 diverse economies closer to an agreement. By December, we sensed that many
countries had concluded that Cancun had been a missed opportunity – and certainly was not
cause for celebration – but they were unsure how to get back to the negotiating table.
So early in January, I wrote a letter to all my colleagues in the
WTO explaining our assessment and our commitment to trying to move forward in 2004. I followed
up with a 32,000-mile around-the-world trip, meeting with representatives of over 40
countries. My last stop, I am pleased to note, was Costa Rica, which was leading by hosting a
meeting of the Cairns Group of agricultural exporters.
We have continued the effort, both in Geneva and smaller meetings,
including one in London from which I just returned. I believe there is an opportunity to
advance the negotiations by this summer. Yet, many hurdles remain, and all countries will need to
work to find the balance between ambitious opening of markets and solving problems with
countries’ special sensitivities in mind.
My simple, short answer to the question, “What are the prospects
for trade in the Americas?”, is a determination to be optimistic. My experience with the
commitment of Colombia’s president to economic reform even in the face of violence – with a Central
America that has moved from civil war to civil liberties and free trade – with a Chile that
has passed from dictatorship to becoming the democratic driver of free trade agreements around the
world – with a Mexico that broke free from the fears of its history to face the future as a
North American and Latin democracy -- each and all have shown the power of Latin Americans
to transform their countries and their society.
The tasks are far, far from finished. And there will be setbacks.
Yet, with our neighbors’ help, we are clearing the pathways to expanding trade, opportunity, and
hope throughout the Americas. None of us can predict with precision the exact course
the countries of the hemisphere will take. I do know we are moving ahead. And I do know that each
step we take to expand trade and openness can support democratic reform and helps the
Americas determine the future that can be.