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Integrating the Americas: Lessons From Asia

By Kenneth W. Abbott and Gregory W. Bowman. Kenneth W. Abbott is a professor of law and commerce at Northwestern University and a specialist in international economic law. Gregory W. Bowman is a graduate of Northwestern University school of law. He will begin clerking for a federal circuit court judge in September. / July 26, 1994



NOW that the North American Free Trade Agreement (NAFTA) has come into effect, the United States has an unprecedented opportunity to create solid economic and political relations with the rest of its neighbors in the Western Hemisphere. From the Florida Keys and the Rio Grande to Tierra del Fuego, more nations have democratically elected governments and are implementing free-market reforms than at any time in memory. Thanks to President Bush's Enterprise for the Americas Initiative and the promise of NAFTA, leaders throughout Latin America are seeking closer economic relations with the US. The president of Chile, the nation most likely to be admitted to NAFTA, will visit Washington soon to press his country's case. Argentina and other countries await only a clearer indication of what they must do to qualify.

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Within Latin America, economic integration is proceeding rapidly, through bilateral free-trade agreements and a variety of subregional arrangements, such as the Southern Cone Common Market, or Mercosur, and the Andean Pact.

Indeed, the pace is accelerating. In May, the Andean nations agreed to create a free-trade zone by Jan. 1. In the week of June 13, at an economic summit, Mexico, Colombia, and Venezuela, soon to be joined by Ecuador, agreed to implement free trade over 10 years. Colombia announced a trade pact with the Caribbean Community, and Brazil continued to broker linkages between Mercosur and other subregional groups. More broadly, the final summit declaration established the goal of integrating these pacts into a Latin American Free Trade Area (LAFTA).

The nations of the Hemisphere must not let this historic opportunity slip away. Reinforcing the current moves to democracy, free markets, and economic integration can help to raise the standard of living of the poor, often destitute people of Latin America and the Caribbean, produce greater security and stability in this traditionally volatile region, and alleviate the social pressures reflected in the recent Chiapas uprising. The US stands to benefit enormously, both economically and politically. It must continue to exercise leadership while respecting the sensitivities of its neighbors.

The Clinton administration has invited the democratically elected leaders of the Western Hemisphere to meet in Miami on Dec. 9 and 10 to discuss economic cooperation and democratic reforms. This ``summit of the Americas'' presents a unique chance to advance reform and integration. If the chance is not to be wasted, this meeting must be more than a photo opportunity.

Plans for the summit are still vague, but they seem quite modest. The assembled leaders are expected to adopt a final declaration and a program of research and consultation in the areas of trade and investment, democracy, and sustainable development.

The December summit would be more meaningful if it went beyond ad hoc declarations and created a substantial, ongoing institutional framework. It would be clearly premature to create a free-trade area, or anything resembling it. But recent Asian experience with economic integration shows that more-modest institutions can be valuable and politically workable.

We propose that the summit establish an American Forum for Economic Cooperation (in Spanish, Foro Americano por la Corporacion Economica, or FACE) as a vehicle for hemispheric integration. FACE is modeled on the Asia-Pacific Economic Cooperation forum (APEC), formed in 1989. APEC is familiar to Latin Americans, since Mexico is already a member and Chile will join later this year.