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Despite Brazil and Mercosur, Miami Vies to Become FTAA’s Headquarters

Recent trade developments in the Americas continue to renew prospects for a hemisphere-wide trade agreement in some fashion, even as observers point to the possibility this year that leftist political movements may come to power in a handful of Latin American nations.

Enthusiasm for stronger trading partnerships was evident last week when Florida Governor Jeb Bush secured endorsements from Peru and Ecuador that Miami would be their preferred site for the Permanent Secretariat of a Free Trade Area of the Americas.

Miami "is the best placed location geographically," said Peru’s President Alejandro Toledo. "Our decision is to support the FTAA there, where it makes the most sense, and even though there are other candidates, like Panama, Mexico and others, we believe that Miami can be the headquarters."

President Toledo’s continued emphasis on opening Peru’s economy is evident with the just-completed bilateral agreement with the United States.  This, coupled with the exemplary leadership of Prime Minister Pedro Pablo Kuczynski, who has led Peru to an impressive 52 consecutive months of economic growth, has set the stage for a continued strong economy.

Elections to succeed Toledo will be held this April and it will be difficult for the next leader – whoever emerges – to turn Peru’s back on the tremendous progress already made through trading partnerships. For instance, in 2004, two-way trade between Florida and Peru alone equaled about $1.2 billion.

In Ecuador, Minister of Foreign Trade Jorge Illingworth Guerrero said after a meeting with Governor Bush and Ecuadorian President Alfredo Palacio that "Ecuador would be in favor of Miami’s candidacy when the FTAA advances."

Support for the FTAA headquarters in Miami from Peru and Ecuador will help pave the way for additional endorsements in the future and will clearly assist in the free trade negotiations in the Andean region and beyond, even though political change may be forthcoming this year.

Ten nations in the hemisphere, including Haiti, have presidential or legislative elections scheduled for the remainder of the year, and leftist movements in some countries may come to power or gain support. But it is mistaken to interpret leftist gains – however few they may be – as a sign that the FTAA or something like it cannot move forward.

One newly elected leader this year, President-elect Michelle Bachelet of Chile, has shown that even left-leaning candidates can be pragmatists about trade.

Since her election, Bachelet has stated that she would support the FTAA and would work to ensure that it "takes into account the diversity and differences among the various countries in the region."

Bachelet is not an anomaly. In Brazil, the populist President Lula da Silva has embraced open trade – albeit a "wait and see" attitude toward FTAA – and in Uruguay, the nation’s top economic official has announced that a trade agreement would be negotiated with the U.S. outside the current Mercosur bloc of key South American nations, causing Paraguay to also begin to look at free trade rather differently.

Certainly, there are exceptions to the pragmatists from the left, namely Hugo Chavez of Venezuela, who relies on his nation’s oil riches, but the anti- FTAA cabal is weak compared to those nations that see the value of a hemisphere-wide community of trade.

During last fall’s Summit of the Americas in Argentina, 29 of 34 nations renewed their commitment to moving forward with the FTAA "of the willing," a resounding defeat for Chavez who failed to live up to his own pre-summit boasting that he would bury the FTAA.

And even four of the five countries that did not favor FTAA at the time – Brazil, Argentina, Paraguay and Uruguay – were not outrightly opposed to an agreement; they wanted more time to see how the Doha Round of multilateral talks on global trade pans out.

A greater urgency is emerging to pull together in a hemisphere-wide agreement because of the influence of China. An FTAA of the willing would allow nations to form an integrated front to compete with China in world markets.

Regardless of the political circumstances this year, the reality and promise of free trade make it all the more critical for Miami to continue its aggressive pursuit of the FTAA headquarters, however an alliance is formed.

After all, the European Union was not created overnight and the expectations that an FTAA in whatever fashion could not evolve – just as the EU has done – is unrealistic.

Whether the trade block is composed of fewer nations, those interested and willing to be a part of the inevitable integration, or whether the FTAA is repackaged with a new name, the results will be the same.   For this reason Miami and Florida must remain on course and continue to be at the forefront of this new economy.

In the meantime, free-trade agreements – such as DR-CAFTA, U.S.-Peru, the ongoing U.S.-Andean negotiations, the U.S. Panama bilateral and possible talks with Uruguay – can serve as stepping stones to a broader FTAA pact.

Along the way, Florida’s economy will continue to benefit as the number-one trading partner of every country in Latin America and the Caribbean, except for Mexico. Taken as a whole, the region represents nearly 60% of Florida’s total international trade and the state handles over 50% of the nation’s trade activity with Latin America and the Caribbean.

Drawing nations together behind a common commitment for a hemispheric community of trade will be no small feat. But any effort must rely on the expectation that most leaders – wherever their placement along the political spectrum – are sensible enough to recognize that for their economies to grow and for millions to move out of poverty, their doors cannot be closed to trading partnerships throughout the Americas.

Jorge L. Arrizurieta is President of Florida FTAA, Inc. and former United States Alternate Executive Director of the Inter-American Development Bank.

Florida FTAA – www.floridaftaa.org

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