Free Trade Area of the Americas

[angel_luv]

Can someone please explain this policy to me? Any links to articles?

Thanks.

[Nbadan]

The Dominican Republic-Central America Free Trade Agreement, more commonly known as DR-CAFTA, is a free trade agreement (legally a treaty under international law, but not legally a treaty under US municipal law). As CAFTA, the agreement originally encompassed the United States and the Central American countries Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In 2004, the Dominican Republic joined the negotiations, and agreement became known as DR-CAFTA.

Bordering Central American nations not in the agreement include Belize and Panama on the mainland, Haiti which is on the island of Hispaniola with the Dominican Republic, and Cuba. Panama is currently in negotiations with the U.S. on a bilateral Free Trade Agreement, and Belize is a member of the Caribbean Community (CARICOM). Haiti was given certain trade preferences with the U.S. under the Haiti Economic Recovery Opportunity Act of 2003 (HERO Act).

The United States Senate approved the DR-CAFTA agreement on June 30, 2005 by a vote of 54-45. (The agreement is under international law classified as a treaty; however it is not classified as such under the U.S. Constitution, which uses the word "treaty" in a more restricted sense. Laws require majority approval in both Houses while treaties (in the US sense) require 2/3rds approval in the Senate only. While an international agreement, DR-CAFTA is not a treaty and so required majority votes in both houses, and not a 2/3rds vote in the Senate alone. Under United States law it is classed as a congressional-executive agreement.) At midnight on July 28, 2005, the House of Representatives, by a narrow vote of 217 to 215, approved CAFTA. It became Public Law 109-053. For DR-CAFTA to be come into effect, it still must be approved by the legislatures of the other parties to the agreement. The Dominican Republic, El Salvador, Guatemala, Nicaragua, and Honduras also approved the agreement. Costa Rica has not ratified the agreement.

The goal of the agreement is the creation of a free trade zone, similar to the North American Free Trade Agreement (NAFTA) which currently encompasses the US, Canada, and Mexico. DR-CAFTA is also seen as a stepping stone towards the Free Trade Area of the Americas (FTAA), another, more ambitious free trade agreement which would encompass South American and Caribbean nations (with the exception of Cuba) as well. Canada is negotiating a similar treaty called the Canada Central American Free Trade Agreement.

If passed by the countries involved, tariffs on about 80% of U.S. exports to the participating countries will be eliminated immediately and the rest will be phased out over the subsequent decade. Due to the U.S. Government's Caribbean Basin Initiative, the vast majority of goods produced in the participating countries already enter the United States duty-free. As a result, it is important to note that the DR-CAFTA's implementation would not require substantial reductions in U.S. import duties with respect to the other countries participating in the agreement.

With the addition of the Dominican Republic, the largest economy in the region, the region covered by DR-CAFTA is the second-largest Latin American export market for U.S. producers, behind only Mexico, buying $15 billion U.S. dollars of goods a year. Two-way trade amounts to about USD$32 billion.

While not necessarily a part of Plan Puebla Panama, CAFTA is a necessary precursor to the execution of Plan Puebla Panama by the Inter-American Development Bank. The plan includes construction of highways linking Panama City to Mexico City and on to Texas and the rest of the United States.

DR-CAFTA reduce tariffs, which is a form of tax. However, every nation in CAFTA remains free to set its overall tax level as it sees fit.

More on CAFTA:Wikipedia (http://en.wikipedia.org/wiki/CAFTA)

[Nbadan]

The Free Trade Area of the Americas (FTAA) is a proposed agreement to eliminate or reduce trade barriers among all nations in the American continent (except Cuba). In the latest round of negotiations, officials of 34 nations met in Miami on November 16, 2003 to discuss the proposal. The proposed agreement is modeled after the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States.

Discussions have faltered over similar points as the Doha round of World Trade Organization (WTO) talks; developed nations seek expanded trade in services and increased intellectual property rights, while less developed nations seek an end to agricultural subsidies and freer trade in agricultural goods. Similar to the WTO talks, Brazil has taken a leadership role among the less developed nations, while the United States has taken a similar role for the developed nations.

Talks began with the Summit of the Americas in Miami on December 11, 1994, but the FTAA came to public attention during the Quebec City Summit of the Americas in 2001, a meeting targeted by massive anti-corporatization and anti-globalization protests. The Miami negotiations in 2003 met similar protests, though perhaps not as large.

In previous negotiations, the United States has pushed for a single comprehensive agreement to reduce trade barriers for goods, while increasing intellectual property protection. Specific intellectual property protections could include Digital Millennium Copyright Act-style copyright protections, similar to the U.S.-Australia Free Trade Agreement. Another protection would likely restrict the reimportation or cross-importation of pharmaceuticals, similar to the proposed agreement between the U.S. and Canada.

Brazil has proposed a measured, three-track approach that calls for a series of bilateral agreements to reduce specific tariffs on goods, and a hemispheric pact on rules of origin and dispute resolution processes. Brazil seeks to omit the more controversial issues from the agreement, leaving them to the WTO.

The location of the FTAA Secretariat is to be determined in 2005. The main contending cities are Miami, Florida and Port-of-Spain, capital of Trinidad and Tobago. Twenty-one of the thirty-four total states so far have pledged a vote and support for it to be based in Port-of-Spain.

The Free Trade Area of the Americas agreement is also under a perceived increase in competition from a newer trade agreement called the Bolivarian Alternative for the Americas (ALBA). The ALBA Free Trade agreement was started by Venezuelan President Hugo Chávez and carries with it various form oil/energy related deals among other things, later leading to a deeper form of future economic integration for member states.

The Free Trade Area of the Americas is known in Spanish as the Área de Libre Comercio de las Américas (ALCA), in French as the Zone de libre-échange des Amériques (ZLEA), and in Portuguese as the Área de Livre Comércio das Américas (ALCA).

More on FTAA:Wikipedia (http://en.wikipedia.org/wiki/Free_Trade_Area_of_the_Americas)

[angel_luv]

Thanks! I will probably have some questions for you when my mind wakes up. =)