Integrating the Americas: Lessons From Asia

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.

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.

Like APEC, FACE would not create a free-trade area and would not be a powerful organization. But it would offer several significant advantages. First, it would make concrete the commitment of its members, including the US, to the common enterprise of hemispheric integration. Tangible commitments are important because a variety of centrifugal forces threaten hemispheric unity. Internal problems and periodic foreign crises preoccupy the US. Mexico faces pressing internal problems. Stronger subregional groups could split Latin America into small, inefficient units. The growth of LAFTA could set the southern half of the hemisphere against the north. Participation in FACE, however, would help bind all nations in the region to the hemispheric ideal.

FACE would also serve as a forum for discussion and negotiation. Members could use this forum to explore common interests and problems, harmonize the economic policies of states and subregional groups, and work on plans for the future. Eventually, FACE could provide a forum for negotiating hemispheric free trade. Meanwhile, it could serve as a regional setting for resolving economic disputes.

One important principle adopted by APEC should guide this hemisphere as well - the principle of ``open regionalism.'' Under this approach, states strive to increase economic integration in their region without erecting discriminatory barriers against the other parts of the world. Asian nations support open regionalism in order to benefit from integration without risking retaliation by their trading partners.

FACE should also be entrusted with a working-groups program. Again, APEC provides a model. Its working groups attempt to reduce practical barriers to regional integration and cooperation. One group, for example, is harmonizing national economic statistics to facilitate coordination; another is working to improve regional transportation and communications networks. FACE could create a small secretariat to coordinate such efforts; or it might receive administrative support from the Organization of American States, soon to be headed by the integrationist Cesar Gaviria Trujillo, currently president of Colombia.

With December fast approaching, an important part of FACE's appeal is the relative ease with which it could be established. As with APEC, no elaborate organization is needed. FACE could operate informally, by discussion and consensus. While this structure would limit the group's power, it would encourage membership - no nation should perceive FACE as a threat to sovereignty. Similarly, FACE would not supersede existing subregional organizations. Instead, it would work alongside them, linking them in a matrix of common goals and principles.

FACE would be only an intermediate step on the way to the ambitious goal of hemispheric integration. But it would be an important step. APEC demonstrates that even an informal organization with limited powers can play an important role in the evolution of economic relationships. FACE would almost certainly accelerate the current momentum toward a more cooperative, integrated hemisphere. If governments in the region begin now, they could take this step in December. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.

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