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International Business: COMMENTARY
HOW THE AMERICAS CAN MAKE THE MOST OF THE SUMMIT
All over town, the city of Miami has been planting palm trees, dressing up for the Dec. 9-11 Summit of the Americas. The meeting will bring together leaders of 34 countries in the hemisphere--all but Cuba's Fidel Castro--in the biggest gathering of government chiefs ever in the U.S. The Clinton Administration scheduled the summit last December in the glow of Congress' approval of the North American Free Trade Agreement, hoping to spur further moves toward free trade. But President Clinton has lost his "fast track" bargaining authority and faces a Republican-controlled Congress. As a result, prospects have dimmed for expanding NAFTA even to Chile, the No.1 candidate for membership.
But the diminished expectations do not mean the summit can't make any progress toward freer trade and investment flows. The first step is to recognize that promoting a monolithic NAFTA, stretching from Alaska to Tierra del Fuego, is not a workable approach, at least for now.
Instead, the Americans should recognize and take advantage of "a more complex web of trade relationships," says Ambler H. Moss Jr., who heads the University of Miami's North-South Center. Altogether, there are 23 subregional free-trade accords such as Mercosur in the hemisphere's Southern Cone and Caricom in the Caribbean. Included in that count is a network of bilateral trade agreements such as Mexico's with Chile, Costa Rica, and Bolivia.
What's different about these arrangements, in contrast to the protectionist blocs assembled in earlier decades, is that they have been lowering barriers to trade with the rest of the world as well as internally. What's important is to make sure that the rules these pacts adopt, from customs procedures to intellectual-property protection, are compatible. That will keep the way open for their eventual merger into broader free-trade arrangements.
FOLLOW-UP. So beyond affirming a commitment to free trade, the summit should establish practical follow-up mechanisms for making sure the subregional groupings are in sync. To maintain the momentum after the leaders go home, the summit must launch working groups, including business representatives, to continue to push for concrete steps to achieve those goals. It's crucial that business leaders from throughout the hemisphere be at the table to discuss, say, a common capital-movements code to encourage investments.
The U.S. has a big stake in the summit's success--as Miami, a center for trade with Latin America, well understands. In retrospect, the notion of linking the economies of the Americas under the umbrella of a hemispheric NAFTA may have been too utopian. But free markets and free trade are taking root throughout the hemisphere, in varied forms. Like the palm trees on Miami's streets, they can flourish if carefully tended.John Pearson and Gail DeGeorge