Background Material on the FTAA
November 11, 2003
The Free Trade Area of the Americas (FTAA) is the formal name given to an expansion of NAFTA that would include all of the countries in the western hemisphere (except Cuba). It is currently being negotiated by trade ministers from a total of 34 nations in North, Central and South America, and the Caribbean.
The FTAA represents the most far-reaching trade agreement in history, encompassing a population of 800 million and a combined GDP of $11 trillion.
At the first "Summit of the Americas" in Miami in December 1994, trade ministers from every country in the western hemisphere (except for Cuba) agreed to launch negotiations to establish a hemispheric free trade zone.
At a second summit held in Chile in 1998, a Trade Negotiations Committee (TNC), consisting of vice ministers of trade from every country and several working groups, was set up.
From the beginning, U.S. multinational corporations have played an integral part in the negotiations and discussions. Over 500 corporate representatives and a variety of corporate committees advise the American negotiators.
Currently, FTAA negotiations are occurring in secret and no texts have been made publicly available. However, statements issued from earlier summits reveal the objectives of the FTAA.
In a statement produced at the 1994 Miami summit, trade ministers reached agreement on a number of "Objectives and Principles," which include:
- economic integration of the hemisphere;
- promotion of the integration of capital markets;
- elimination of barriers and non-tariff barriers to trade;
- elimination of agricultural export subsidies;
-- elimination of barriers to foreign investment;
- a legal framework to protect investors and their investments;
- enhanced government procurement measures;
- new negotiations on the inclusion of services;
- consistency with the World Trade Organization (WTO).
Like NAFTA, the FTAA will allow "investor-to-state" lawsuits (Chapter 11 of NAFTA) which enable corporations to sue governments through a supra-state trade body to demand that governments eliminate any laws which interfere with the free flow of foreign capital. This includes environmental laws, local content laws, laws limiting profit repatriation, labor standards, etc.
Going beyond NAFTA, the FTAA would extend the removal of all impediments to foreign capital and the "investor-to-state" lawsuits to the service sector. This would enable foreign multinationals to " compete" on an equal basis for publicly funded services such as health care, education, water, schools, prisons, postal service, etc.