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U.S.- Latin American Trade in the Bush Era

by Richard E. Feinberg

 

Dr. Richard Feinberg

Dr. Richard Feinberg

ABSTRACT
(This working paper was published in 2003, please read note of the Publisher)

With remarkable success, Latin Americans have sought to impose
their free trade policy agenda on a very reluctant and internally fractious
United States. They have an ally in President George W. Bush,
whose senior appointments notably support hemispheric trade integration
even as political pressures sometimes have yielded protectionist
outcomes. Bush’s trade negotiator, Robert Zoellick, pursues a
doctrine of competitive liberalization while accepting some linkage
between trade and social and political goals. In negotiating the Free
Trade Area of the Americas (FTAA), the administration will have to
balance many domestic pressures without alienating Latin America.
Ultimately, FTAA ratification will signal a new Western Hemisphere
economic-security alliance for the twenty-first century.

The United States has long resisted what geography would seem to
dictate: a special relationship with Latin America. Frequent rhetorical
and occasional real concessions to the idea of hemispheric solidarity
notwithstanding, U.S. foreign policy has generally preferred to focus
on other regions of the world––notably Europe and Asia––or to eschew
regional favorites altogether in favor of a global reach. These preferences
have been deeply rooted in the ethnic origins of the long-dominant
East Coast foreign policy establishment, and in global power relations
that located the nation’s major challengers and allies in those
distant theatres. After World War II, U.S. hegemony seemed to dictate a
universalist perspective that favored global institutions and policies as
against a more parochial and local regionalism.

This denial of geography often had been reciprocated by Latin
American elites throughout the nineteenth and twentieth centuries
(Feinberg and Corrales 1999). Nationalists of the right and left preferred
to limit their dependence on U.S. power by diversifying their relations
through stronger ties to Europe or other Latin American nations, or
simply by erecting nationalist barriers against foreign commerce and
capital. There have been moments in history, however, when Latin
America has reached out to the United States and the United States has
responded affirmatively. We are living in one such moment.

The idea of a hemispheric free trade zone is not new. It can be
traced back at least to Simón Bolívar (whose integrationist vision sometimes
excluded but sometimes seemed to include North America), and
it was discussed at the time of the founding of the Pan-American Union
at the end of the nineteenth century. Presidents Ronald Reagan
(1980–88) and George Bush (1988–92) made rhetorical references to the
idea of a hemispheric free trade zone.

This vague aspiration did not become a hard policy option, however,
until it was advanced with energy and persistence during the 1990s
in a series of Latin American initiatives. The Latin Americans––acting out
of a series of economic, political, and diplomatic motives––have sought
to impose their free trade policy agenda on a very reluctant United
States. The Latin Americans have worked to take advantage of the sharp
divisions within the Washington bureaucracy, Congress, and public
opinion to tip the balance in their favor. Just as U.S. policy has so often
altered the course of history in Latin American nations by playing on
internal divisions and decisively strengthening the hand of its internal
allies, so now the Latin Americans have worked their will on a fragmented
U.S. body politic, seeking to alter the constellation of forces at
the margin that made a difference.

In President George W. Bush, the Latin American integrationists
have a professed friend. The 43rd U.S. president inherited his preference
for free trade from his Eastern Establishment family, his elite New
England schooling, and his Republican Party roots. He took up the
cause of free trade in the Western Hemisphere after he saw how
exchange with the Mexican economy benefited the Texan economy,
and he was among the first politicians to grasp that better relations with
Latin America could help garner Latino votes. He learned the benefits of
the North American Free Trade Agreement (NAFTA) from his business
associates and Mexican friends, and when he became president his new
counterparts in Latin America repeatedly told him that the reputation of
the United States as a reliable friend and partner hung on his completion
of the Free Trade Area of the Americas (FTAA).

Bush wants to please and support his friends south of the border as a gesture of generosity
and reciprocity that exemplifies his unique combination of Eastern
noblesse and Texas hospitality.

Bush’s selection to direct his trade diplomacy, Robert Zoellick, is
another true believer in hemispheric integration. Indeed, the administration’s
trade team is a remarkably homogeneous collection of freetrade
advocates who also support regional trade initiatives. Yet even
with well-placed sympathizers in the executive branch, the Latin Americans
cannot be certain that their historic gamble will pay off. Only aca-
demic theorists rooted in the rigid realist tradition of state security studies
would be surprised to discover that trade policy does not arise from
some unitary “national interest” embodied in the presidency but rather
boils up from the many strands of domestic politics. And U.S. society is
deeply divided on trade policy, especially with regard to developing
countries. Protectionists, mercantilists, social welfare advocates, and
other opponents of freer trade in general and the FTAA in particular
have strong influence in the U.S. Congress, which, in turn, has a powerful
voice in the making of U.S. trade policy. These forces also carry
weight in the more political circles in the White House and presumably
with President Bush himself, as evident recently in the joint executive legislative
branch complicity to grant protection and enriched subsidies
to steel and agriculture. In the summer of 2002, after a prolonged struggle,
President Bush finally persuaded Congress to grant him the authority
to negotiate trade agreements that Congress would not seek to
amend, an authority denied to President Clinton since 1994, even as this
trade promotion authority was approved by a razor-thin margin in the
House of Representatives.

To cross the finish line––to negotiate and then ratify a free trade
pact, with all that will imply for U.S.-Latin American relations––the Latin
Americans will have to devise strategies with their embattled U.S. allies
that build a willing coalition in U.S. public opinion and the U.S. Congress
while simultaneously keeping Latin American elite support behind
a vision of a more integrated Western Hemisphere. The outcome of this
highly disputatious, complex, multilevel game will determine the future
of U.S.-Latin American relations.

MADE IN LATIN AMERICA

Scholars typically attribute the emergence of regionalism in the
post–Cold War period to the shifting trade strategies of the hegemonic
powers, the specter of competition among great trading blocs in a more
pluralistic world, or the structure and interests of domestic actors in the
key industrial countries. Smaller nations are depicted as mere pawns in
these struggles of the giants or, at best, as lemmings scurrying to follow
the major powers. Rarely is the drive toward regional integration perceived
to be a bottom-up affair, in which the smaller, developing nations
are a driving force in history. In reality, by the early 1990s, structural
shifts in Latin American economies and polities and in Latin Americans’
interpretation of their own interests had altered the region’s traditional
aversion to integration with the United States. Seizing control of their
own destiny, Latin American actors have successfully engaged the
United States to negotiate what could amount to a strategic alliance for
the twenty-first century: the FTAA.

As the process of hemispheric trade integration has unfolded, the
key initiatives have come from Latin America (Feinberg 1997). In 1990,
it was President Carlos Salinas de Gortari, returning from Europe disillusioned
with the lack of interest in Mexican markets, who proposed an
FTA to President George Bush. It was the leaders of the Andean countries,
at a minisummit in Cartagena, Colombia, who first urged Bush to
consider a post–Cold War economic policy toward the region that
yielded the Enterprise for the Americas Initiative (EAI), a forerunner of
the FTAA. It was the Chileans who have pressed three successive U.S.
administrations for an FTA. It was Latin Americans who proposed to the
Clinton White House that the U.S. convene a post-NAFTA meeting of
hemispheric leaders to diffuse the spirit of NAFTA southward, who
insisted that the centerpiece of the subsequent 1994 Miami Summit be a
free trade pact, and who cornered the United States into accepting a
firm end date for negotiations (Feinberg 1997, 76).

The United States acceded to Latin American pressures only at the
last moment, when the credibility of the Clinton summit hinged on the
announcement of a certain date (Feinberg 1997, 77–78). Without the
Miami Summit, regionwide free trade would probably have remained a
vague aspiration, not a hemispheric consensus. Most recently, in early
2002, it was Central America’s turn to twist the U.S. arm to open negotiations
for a plurilateral FTA, as a building bloc toward Central America’s
final goal, the Free Trade Area of the Americas.

The Latin Americans have good reasons to pursue hemispheric
integration. We can group their motives in three clusters: trade and
investment, macroeconomic issues, and political-strategic matters.

Trade and Investment

As a consequence of the 1980s debt crisis, among other factors, Latin
American economies have adopted a more outward-oriented growth
strategy, and regional integration models have shifted from inward-looking
and protective to forms that couple domestic liberalization with an
opening to global markets (“open regionalism”). By enlarging their markets,
Latin Americans have hoped to attract more international investment
and, with it, technology transfer––as Latin America has increasingly
turned away from viewing a north-south division of the world
toward perceiving its future as tied to global capital and technology
flows. Entering into a free trade pact with the United States would signal
to investors a more stable policy environment and a warmer and more
predictable business climate.

Latin American trade strategists saw another, specific advantage in
an FTAA: the opportunity to gain the secure access to the world’s
largest and most dynamic market that they had never really extracted
from negotiations in the General Agreement on Tariffs and Trade
(Tussie 1998).

Macroeconomic Reform

In regional integration with the United States, macroeconomic reformers
in Latin America perceived additional leverage in their domestic
political struggles. In their constant battles against the remnants of the
import substitution industrialization model, reformers saw international
treaties as ways to lock in the steps already taken toward liberalization,
or at least to significantly raise the costs of backsliding.

More concretely, international competition could overwhelm and destroy the inefficient
and reactionary “national” industry sectors, as Chile and then Mexico
had demonstrated. A regional free trade alliance would also focus
national policy debates on the next stage of reforms required to achieve
international competitiveness, including further market liberalization,
effective regulation and competition policies, and modern infrastructure
in, for example, telecommunications, energy, and transportation
(Salazar-Xirinachs and Tavares de Araujo, 1999). As the antiglobalization
backlash has gained momentum in some countries, this search for international
leverage becomes all the more salient.

Democratic Consolidation and
Strategic Bargaining

Politically, Latin America’s democrats were looking to Washington and to
interamerican institutions to bolster their position against the everpresent
authoritarian tendencies in Latin American polities. During the 1990s, the
effective exercise of this collective defense of democracy scored several
impressive victories and gained prestige and legitimacy. The oft-repeated
phrase “Democracy is the only legitimate form of government in the
Americas” took on substance and probably altered the correlation of
forces in several countries when democracy was in the balance.

As César Gaviria, secretary-general of the Organization of American
States, has noted, “The FTAA was conceived from the beginning as part
of a broader effort at rapproachement” (2001). Shrewd Latin American
diplomats recognized that a hemispheric free trade alliance would give
them leverage over the United States on a range of interdependence
issues. They saw how Mexico again and again sought advantage from
NAFTA to squeeze indulgences out of Washington, a strategy raised to
an art form by President Vicente Fox and his wily foreign minister, Jorge
Castañeda.

Just one example of this leverage: Fox asked Bush to overrule
his advisers and join him at the Monterrey Conference on Development
Finance, transforming that U.N.-sponsored meeting into a major
international gathering and a huge diplomatic success for Mexico and
for Fox himself.

IN THE UNITED STATES,
REACTIVE CONVERGENCE

This Latin American push for hemispheric integration has not been
entirely well received in the United States, as most of its diplomats, generals,
and merchants have preferred to ply their trades in more powerful
and prosperous parts of the world. During the 1980s and 1990s,
however, the appeal of Latin America did gain ground in some circles,
even as the debate on trade became increasingly polarized.

Economic Interests

Latin American economies expanded during the late 1980s and through
most of the 1990s. Latin America’s weight in U.S. exports rose during the
1990s, from 17 percent in 1992 to nearly 21 percent in 1998. The exposure
of U.S. multinational firms, lenders, and portfolio investors
expanded in many markets. U.S. direct investment in Latin America
increased from $71 billion in 1990 to $172 billion in 1997, or 20 percent
of U.S. overseas holdings.

The attractiveness of an FTAA to such market participants is evident.
A fulsome FTAA could make such transactions less risky and possibly
more profitable. An FTAA could lower tariff and other trade barriers,
eliminate or reduce some bothersome regulations, and enhance predictability
and transparency.

According to one calculation, an FTAA could result in the doubling
of U.S. trade with Brazil in the short term alone (Schott and Hufbauer
1999; Hufbauer et al. 1999). What’s more, the density of merchandise
trade flows within a country is estimated to be at least ten times greater
than trade flows that cross international borders, holding constant the
economic size and distance between the source and destination (Schott
and Hufbauer 1999). Seen from this perspective, U.S.-Brazilian
trade––only $25 billion in 1997––is far below its potential.

An FTAA, moreover, has the additional advantage that it would
grant U.S. firms preferential treatment––as against, for example, competitors
from Europe and Asia. Or, as other nations sign free trade pacts
with Latin American nations and as the Latin Americans themselves
weave a web of intraregional trading arrangements, an FTAA would
guarantee U.S. firms at least a level playing field.

Many U.S. traders and investors active in the region have developed
business as well as personal relations with their Latin American counterparts.
They interact regularly with them in various incountry business
associations (for example, chambers of commerce) and in the New
York–based Americas Society and its affiliate, the Council of the Americas.
Sensitive to the interests of the internationalized Latin American
corporate and financial sectors, these U.S. executives serve as conduits,
spokespersons, and lobbyists for their regional partners. These channels
are particularly influential in the Republican Party and in the editorial
pages of business-oriented media. It could be argued that the flow of
influence runs in the opposite direction––from U.S.-based firms to Latin
America. Perhaps we can best talk of a convergence of interests, a
transnational alliance among the internationalized interests in the hemisphere’s
private markets.

Trade-bargaining Strategies

Pursuit of a regional free trade pact in the Western Hemisphere offers
other advantages to U.S. trade negotiators. As seen from a trade-bargaining
perspective, plurilateralism or regionalism can strengthen the
hand of U.S. negotiators engaged in global or other regional forums.
First the Canadian and then the Mexican FTAs were designed in part to
encourage negotiations taking place within the GATT (Elliot and Hufbauer
2002, 403). The Asia Pacific Economic Cooperation (APEC) forum
served to spur the wrap-up of the Uruguay Round. Regionalism also
offers opportunities to set precedents that may later be advanced in
global forums––as APEC did in 1996 with its international telecommunications
agreement, later accepted by the World Trade Organization.

Regionalism, that is, can spur globalization. The Bush administration has
adopted the phrase “competitive liberalization” to describe this positive
interaction among bilateral, plurilateral, and global trade forums.

An FTAA could be a positive spur to global freer trade. But it could
also be seen as building a fallback option, should other forums fail and
global trade contract. It is interesting that this component of strategic
“hemispherism” crept into President Bush’s language at the third Summit
of the Americas in Quebec City in April 2001. Speaking extemporaneously
at the closing press conference, Bush asserted that freer trade
would better enable the Western Hemisphere to compete against Asia
and Europe. This seemed to put Asia and Europe on notice that Bush
would be willing to contemplate turning inward toward his own hemisphere
should relations elsewhere deteriorate. At the very least, Bush
appears willing to play one region off against another, to the potential
benefit of U.S. bargaining power and strategic interests. In a similar but
more positive vein, U.S. Trade Representative Robert Zoellick told a
gathering of business executives with interests in Latin America, “If the
Americas are strong, the United States will be better positioned to
pursue its aims around the world” (Zoellick 2001a).

Positive Externalities

Beyond trade and investment flows, successive U.S. administrations
have recognized an interest in supporting the internationalized sectors
in Latin American economies and polities. Many U.S. policymakers have
understood that free trade pacts could enhance the legitimacy and leverage
of those sectors, help to lock in their macroeconomic reforms, and
accelerate steps toward market liberalization. The standard U.S. rhetoric
linking free markets and free societies thus has taken on real form in a
region struggling to consolidate democratic institutions. Furthermore, on
issues from counternarcotics to counterterrorism, environmental protection
to energy cooperation, free trade was widely understood as generating
positive externalities or spillover effects in diplomatic negotiations.
Countries linked together in an FTAA could also serve as useful allies in
global forums, whether in the WTO or elsewhere.

A FRAGMENTED NATION

Not all U.S. citizens have been persuaded, however, by these arguments
of economic interest, bargaining tactics, and issue linkage. During the
1990s in the United States, opponents of the FTAA and of freer trade in
general grew increasingly vociferous. Their arguments were many.

Trade specialists in and outside the bureaucracy favored globalism over
regionalism––although as time went on, they grew more accustomed to
regionalism, less frightened that it might divide the world into hostile
trading blocs, more willing to see regionalism as a building block or catalyst
to global freer trade. They continued to question the urgency of
the FTAA project nevertheless, pointing out that most of the alleged
gains from hemispheric free trade had already been realized in NAFTA
and that once Canada and Mexico were excluded from the numbers, the
near-term gains from more open trade with Central and South America
would be modest.

Some critics continued to question the wisdom of entering into such
a close arrangement with Latin America. In the bureaucratic and policy
community, Europe, Asia, and the Middle East continued to hold sway
as regions of primary importance and attention––even as George W.
Bush’s extraordinary focus on the Western Hemisphere dampened, at
least temporarily, those attitudes in the executive branch that disdained
Latin America. As several South American countries, notably Venezuela
and Argentina, experienced renewed political or economic instability
between 2000 and 2002, concerns surfaced once again about the
region’s reliability as a diplomatic ally and economic partner.

The loudest opposition to the FTAA came from the “blue-green
alliance”––that de facto coalition between organized labor and many
progressive nongovernmental organizations (NGOs) advocating environmental
protection, human rights, poverty alleviation, and other social
concerns.

The unionists worried that an FTAA would expose them to
competition from lower-wage areas, and they sought to protect their
jobs––if even at the expense of Latin American workers––by linking
trade sanctions to alleged violations of workers’ rights. Most of the
NGOs had other motives; they saw in trade accords one more arrow
they could add to their quiver as they sought leverage over developing country
social policies to internationalize good practices and to prevent
a “race to the bottom” that could endanger hard-won gains in the United
States.

Distrusting governments’ vague statements of good intentions,
both the unions and the NGOs sought hard sanctions to enforce their
high standards of behavior.

Politically, many of the blues and greens were linked to the Democratic
Party; and as the ardor of their opposition to freer trade pacts
grew, more and more congressional Democrats began to vote against
trade legislation.5 When the renewal of fast-track negotiating authority
came to a vote in 1998, it went down to defeat in the U.S. House of Representatives
by 243 to 180, with over 80 percent of Democrats voting
against the measure. This blue-green alliance was joined by 32 percent
of the Republicans, many located in the traditionally protectionist South,
to form a rejectionist majority.

By 2000, it appeared that the Clinton administration’s decision in
1994 in favor of an FTAA had been a disequilibrium solution, in the
sense that it lacked sufficient domestic political support to reach the
final goal. In the run-up to the Miami Summit, the pressures from Latin
Americans and the summit itself temporarily pushed U.S. decision makers
off the true equilibrium path––which perhaps would have led to a
gradual and incomplete expansion of NAFTA or the signing of disconnected
bilateral FTAs, well short of a comprehensive FTAA. At moments
when the trade debate turned essentially domestic and Latin American
preferences failed to register, as in the 1999 fast-track authority vote, the
oppositionists demonstrated a blocking majority.

THE BUSH-ZOELLICK TEAM

The Bush trade team came charging out of the gates during its first year
in office, presenting a seemingly united determination to advance trade
liberalization. Zoellick made strong speeches laying out his strategic
vision, pursued international negotiations on many fronts, and strove to
build a winning coalition in the Congress. But in the administration’s
second year, as the midterm congressional elections approached,
domestic political interests increasingly impinged on trade policy, slowing
international negotiations, dragging out the debates in Congress,
and driving the administration itself to advocate or acquiesce to some
highly visible protectionist measures.

Having criticized Clinton during the 2000 presidential campaign for
dropping the ball on the FTAA and paying insufficient attention to Latin
America, and driven by a calendar that fixed the third Summit of the
Americas just three months into his term, Bush quickly jumped into
Latin American relations. In his first year in office, Bush had 26 meetings
with Western Hemisphere heads of state, not including his attendance
at the Summit in Quebec (Feinberg and Rosenberg 2002).

He has given several speeches devoted to U.S.-Latin American relations, one at
the OAS and another at the Inter-American Development Bank (IDB),
two venues symbolizing multilateralism in hemispheric relations. Bush
White House aides report that he regularly pushes them to keep working
on various Latin American issues of special interest to him, including
the FTAA; and his national security adviser, Condoleezza Rice, has
beefed up her Latin Americanist staff to keep pace with her boss’s interest
in hemispheric affairs.

Bureaucratic Homogeneity

Bush’s senior appointments were notable for their homogeneity in their
belief in free trade. If pockets of protectionism, disdain for Latin America,
or distaste for regionalism remained, they were submerged by the
president’s compelling affirmations of his intention to complete the
FTAA. In his appointment of Zoellick to direct the U.S. Trade Representative
Office (USTR), Bush found a seasoned policymaker who, during
the elder Bush’s administration, had worked on the Uruguay Round,
NAFTA, and APEC, and was comfortable with the FTAA. Zoellick combines
a sharp intellect with operational skills honed as an aide to James
Baker III during the earlier Bush administration in the departments of
Treasury and State and at the White House.

Among the various agencies with equities in trade, Bush has given
Zoellick and the USTR the lead over U.S. policy and has blessed him with
appointees in the other key agencies who have a decidedly pro–free trade
bias. At the Treasury, the leading international post is in the hands of the
undersecretary for international affairs, John Taylor, a Stanford University
economist who served under free-marketeer John Boskin (a Stanford University
colleague) on the Council of Economic Advisers during the previous
Bush tenure.

The Treasury deputy secretary is Kenneth Dam, whose
credentials include a standard text on the WTO (Dam 1970).
At the State Department, Colin Powell is inclined toward freer markets,
as is his chief economic officer, Under Secretary for Economic,
Business, and Agricultural Affairs Alan Larson. At the Commerce Department,
the views of Under Secretary for International Trade Grant
Aldonas are less easy to classify, but he had experience advocating free
trade policies while serving previously as special assistant to the under
secretary of state for economic affairs and at USTR as director of South
American and Caribbean affairs. He was also viewed as a supporter of
more open markets when he was a Republican Trade Counsel on the
Senate Finance Committee.

At the White House, the National Economic Council, under Harvard
professor Lawrence Lindsey, in its role as White House coordinator of
economic policies, potentially could challenge USTR for primacy. But
the NEC’s international role was diluted in a Bush reorganization that
stripped the NEC of a separate international staff, creating instead a
small international office under a deputy, Gary Edson, that reports
jointly to NEC Director Lindsey and National Security Adviser Condoleezza
Rice. In any case, Edson has impressive free-trade credentials:
he worked for then-deputy secretary of state Kenneth Dam during the
Reagan administration and USTR Carla Hills during the first Bush administration,
and he holds an MBA from the University of Chicago. Another
White House player is Deputy Chief of Staff Josh Bolten, a former USTR
general counsel known in Washington policy circles as a sophisticated
proponent of market-opening trade policies.

Zoellick reportedly confers routinely with his cabinet
peers––notably, Treasury Secretary Paul O’Neill, Commerce Secretary
Donald Evans, and National Security Adviser Rice––who generally defer
to him in his spheres of primary jurisdiction: trade policy initiation and
negotiation.7 With the self-confidence of a Robert McNamara, when
challenged at interagency meetings Zoellick does not hesitate to establish
his superior grasp of both strategy and details. As a result of this
policy homogeneity, delegated leadership, and aggressive style, Zoellick
got off to a quick start during 2001.

The early Bush-Zoellick trade offensive benefited from a certain
bureaucratic momentum that had built up behind the FTAA process after
the 1994 Miami Summit. There is nothing like the repetition of boilerplate
language––asserting that the FTAA favored a laundry list of U.S.
interests––to persuade its drafters and articulators little by little of the
virtues of that policy direction. What some once saw as an unfamiliar
and dangerous innovation of trade policy become part of the everyday
landscape. The same familiarization process occurred in other countries,
as leaders and ministers reaffirmed their commitment to the FTAA project
at meeting after meeting.

Institutional Momentum
The Bush-Zoellick offensive also benefited from an institutional momentum
embedded in several international forums and institutions.

As negotiations on the FTAA proceeded, there evolved an elaborate web of negotiating
committees and working groups that networked with as many as
a thousand trade officials. Through repeated interaction and learning,
they gradually developed mutual knowledge and trust. As their understanding
of each other’s interests became more sophisticated and realistic,
some ill-founded prejudices evaporated, professional friendships
developed, and a stake in a successful outcome took shape (Salazar-Xirinachs
2001). These government experts became a form of epistemic community
with an interest in regional cooperation and the FTAA.

Other sources of this institutional momentum were the premier
regional institutions, the OAS and the IDB, with their built-in inclination
to favor regional integration projects. These multilateral agencies became
increasingly attached to the FTAA project. Their respective leaders, César
Gaviria and Enrique Iglesias, spoke out repeatedly in favor of the FTAA,
and their bureaucracies became the FTAA’s de facto think tank, churning
out supportive databases and policy studies that tracked the direction of
regional trade, monitored the various regional trade pacts, and analyzed
the remaining obstacles facing the FTAA negotiators.

Yet another source of institutional momentum was the summit
process, as set in motion by the 1994 Miami meeting and carried forward
in Santiago in 1998 and Quebec City in 2001. These hemispheric summits
have served as markers for negotiators and occasions for leaders to
reaffirm their devotion to the FTAA vision. The Quebec Summit, coming
only three months after Bush took office, compelled his administration
to focus early on hemispheric trade issues and gave Bush and Zoellick
occasions to voice their strong support for the regionalist option.

Together, these various institutional locations and procedures took on a
momentum of their own, somewhat autonomous from those national
leaders who had originally set the FTAA project in motion––just as institutionalists
might have predicted and some FTAA opponents had feared.

Some Favorable Domestic Trends


Certain developments in U.S. domestic politics and opinion also supported
Bush’s intuitive preference for the FTAA project. In the Republican
Party during the 1990s, it appeared as though the protectionist wing
was growing stronger. But Bush’s own preferences and his reliance on
his father’s circle of senior advisers––committed free traders––promised
to pull the party leadership and congressional majority back into the
free trade camp. In the trade policy community––which, until the early
1990s, sided with the USTR in strongly preferring global trade liberalization
as a first-best solution––regionalism became an increasingly
acceptable second-best option, especially if conceived as part of a “competitive
liberalization” strategy.

In addition, Hispanics emerged as an increasingly potent political
force, courted by both Republicans and Democrats. Clinton had
believed that Latinos were primarily interested in local “bread and butter
issues” (other than the Cuban American community, with its passionate
hatred of Fidel Castro), but Bush intuited that a subtle link existed
between U.S. policy toward Latin America and Latino sentiment.

Most Latinos might not pay attention to the details of U.S. policies toward the
hemisphere, but they were offended by the sort of verbal assaults on
Latin America that seemed to evoke racist imagery, as disseminated by
some anti-NAFTA voices and as repeated during the debates over trade
promotion authority. By adopting a more positive tone toward Latin
America and by seeking to embrace it as a worthy partner for the United
States, Bush was indirectly flattering the Latinos and making them feel
more welcome in their chosen land. This interpretation of Latino politics
gave the FTAA a new and increasingly influential constituency in the
domestic political realm.

Paradoxically, the business community presented a problem for the
Bush team. It generally supported the Bush administration and freer
trade, and business alliances such as the U.S. Trade Coalition worked on
behalf of the administration’s market-opening trade initiatives. Many
corporate lobbyists, however, were not placing trade at the top of their
congressional agenda (Alden 2002). Some sectors, such as telecommunications
and pharmaceuticals, had satisfied many of their trade goals in
previous negotiations.

Other sectors, such as agriculture, were increasingly
divided on trade policy, as some big commodity producers now
feared fresh competition from cheap imports. Many corporate executives
preferred to focus on tax reforms or on the current quarter’s earnings,
rather than to spend political capital on potential long-term gains
from trade liberalization. Nor had the executive branch been particularly
adept at making tangible and visible the projected gains for U.S. business
from future trade accords.

More generally, the current Bush administration, like previous
administrations, has not engaged in a comprehensive and systematic
effort to educate the U.S. public about the value to the United States of
an engaged and market-opening trade policy. The critics of trade agreements
and more open markets have done a much better job than the
proponents, post-NAFTA, of getting their message out to the public. This
has significantly complicated the congressional debate on trade.

THE BUSH-ZOELLICK TRADE STRATEGY

Against this complex domestic political backdrop, Zoellick has articulated
a trade policy with two central characteristics: the simultaneous
pursuit of trade agreements at multiple levels in ways that definitively
bestow legitimacy on regional trading arrangements (RTAs); and the
linkage of international trade with other social, political, and strategic
objectives. (For his major speeches, see Zoellick 2001a, b, c; and his
congressional testimony, Zoellick 2002.)

Multiple Fronts and RTAs

Zoellick is pursuing global, regional, and bilateral trade agreements, to
be negotiated simultaneously and to be seen as potentially complementary
and mutually reinforcing. In phrases that echo military tactics
and international political economy, Zoellick has stated with candor, “By
moving on multiple fronts, we can create a competition in liberalization
that will promote open markets around the world” (Zoellick 2001b).

In following this multiple-front strategy, Zoellick initially accepted the
hand dealt him by the outgoing Clinton administration, or as dictated by
prescheduled international meetings, including FTA negotiations with
Singapore and Chile, regional negotiations with APEC, the FTAA, and the
renewed efforts to launch the new WTO round.

As far as can be determined, at the outset of the Bush administration there was no “bottom-up”
review of U.S. trade policy that might have questioned these negotiations
and forums in any fundamental manner. In this sense, Zoellick represents
continuity in U.S. trade policy as it evolved during the 1990s. But he
raised this multiple-front strategy approach to the level of trade doctrine.
It is significant that RTAs are no longer anomalies to be explained
away as fitting unique circumstances; rather, they have been fully
accepted and incorporated into the heart of U.S. trade policy. The USTR
has buried its historical dedication to globalism and the GATT-WTO as
being not only the first-best but the only legitimate trade strategy. For
the Bush administration, RTAs can serve a variety of purposes. As Zoellick
succinctly told Congress in February 2002:

[Bilateral free trade agreements] can open up a new front for free
trade. They can create models of success that help reformers, break
new ground for liberalization in changing or emerging sectors (e.g.,
biotech, high tech––including IPR-related [intellectual property
rights] sectors––and services), build friendly coalitions to promote
trade objectives in other contexts (e.g., biotech, SPS topics), add to
America’s trade leverage globally, underpin links with other
nations, and energize and expand the support for trade. Next trade
agreements also present fresh opportunities to find common
ground at home, and with our trading partners, on the nexus
among trade, growth and improved environmental and working
conditions. (Zoellick 2002)

Beyond pursuing the FTAs with Singapore and Chile inherited from
the Clinton administration, the Bush administration has begun talks with

Central America and is considering FTAs with a number of other nations,
including Uruguay, Australia, South Africa, Morocco, and possibly others
in sub-Saharan Africa. While this more aggressive pursuit of FTAs is a
new element in U.S. trade policy, Zoellick realizes that the United States
is playing catch-up with the rest of the world. As the USTR lamented in
its “2001 International Trade Legislative Agenda” (USTR 2001), “There are
over 130 preferential trade agreements in the world today––and the
United States is a party to only two of them.” As Zoellick pointedly
moaned, moreover, “There are 30 free trade agreements in the Western
Hemisphere; the United States belongs to only one” (Zoellick 2001c).

Linkage Politics

Another trend that had emerged during the Clinton administration was
codified in the Bush-Zoellick trade strategy: that of linkage politics. In a
retreat from USTR purism, which held that trade policy should be kept
neat and separate from other policy issues, Zoellick accepts that trade
cannot be quarantined from other variables in the international political
economy. “We need to align the global trading system with our values,”
he says (2001b).

Specifically, Zoellick has argued that trade policy can show respect
for core labor standards and environmental protectionism, as well as
democracy and the rule of law––but “without slipping into fear-based
campaigns and protectionism” (2001b). In an effort to move away from
a sanctions-based approach to advancing trade-related issues, Zoellick
has proposed a “toolkit” of measures to advance trade and environmental
objectives.

These measures consist primarily of technical and financial
assistance that can be extended to the relevant ministries in developing
countries by bilateral and international agencies, such as the U.S. Agency
for International Development, the World Bank, the International Labor
Organization, and various United Nations agencies (USTR 2002b). Zoellick
has also floated the idea of applying monetary fines against violators
of agreed-on standards as an alternative to trade sanctions.

To persuade Congress to grant it authority to negotiate trade
accords and then present them for an up or down vote with no amendments
and limited debate time (formerly known as fast-track authority,
renamed trade promotion authority, or TPA, by the Bush administration),
the executives agreed to accept as overall negotiating objectives
the following: to promote respect for worker rights consistent with the
core labor standards of the International Labor Organization (ILO), to
ensure that trade and the environment are mutually supportive, and to
seek to protect the environment.

This TPA legislation also bound the administration to seek appropriate
penalties in a given violation of these requirements (while not adversely
affecting interests not party to the dispute). It remains to be seen exactly
how far the Bush administration will attempt to push these issues in
international negotiations, whether in the WTO round, the FTAA, or
bilateral accords, and whether it can find compromises that satisfy the
more accommodationist elements in the blue-green coalition without
alienating Republican free traders and foreign governments.

Trade and Democracy

The Bush administration has also accepted a linkage between trade and
democracy. At the Quebec Summit, Bush and the other 33 hemispheric
leaders adopted a democracy clause that “establishes that any unconstitutional
alteration or interruption of the democratic order in a state of
the Hemisphere constitutes an insurmountable obstacle to the participation
of that state’s government in the Summits of the Americas
process” (OAS 2001).

It was understood that the phrase “Summits of the
Americas process” encompasses the FTAA. That is, the FTAA became a
tool of international political economy, a potential trade sanction to
deter would-be authoritarians and to punish those adventurous enough
to violate democratic norms.

This linking of potential trade sanctions to democracy puts teeth
into the hemisphere’s collective defense of democracy. Secretary of
State Colin Powell traveled to Lima (by coincidence on September 11,
2001) to join his fellow foreign ministers in signing the Inter-American

Democracy Charter, which codified the Quebec democracy clause into
hemispheric dogma. The Democracy Charter defines the “essential elements”
of democracy and records the procedures by which a member
state could be suspended from the OAS, although it does not detail procedures
for suspension from the prospective FTAA.

Of course, the idea of inserting a democracy clause in a trade agreement
hardly originated in Washington. The European Union requires
members to be democracies respectful of human rights. In 1996, the
MERCOSUR countries (Brazil, Argentina, Uruguay, and Paraguay)
agreed that “the full effectiveness of democratic institutions is an essential
condition for cooperation in the framework of the Treaty of Asunción”
(MERCOSUR 1996). Led by Brazil, MERCOSUR threatened to
invoke the agreement’s democracy clause to quell political instability in
Paraguay. Brazilian President Fernando Henrique Cardoso warned the
Paraguayan authorities that the interruption of the constitutional order
would result in Paraguay’s expulsion from MERCOSUR (Feinberg and
Bates 2001). This pressure was a key factor in the resignation of then president
Raúl Cubas.

When his domestic opponents sought to oust Venezuelan President
Hugo Chávez in April 2002, many parties to the drama, both foreign and
domestic, sought to justify their actions with reference to the newly
minted Inter-American Democracy Charter. By chance, a meeting of
FTAA negotiators was scheduled to begin shortly on the Venezuelan
island of Margarita, and a movement began among governments to boycott
the gathering, in effect to sanction Venezuela for its interruption of
democratic procedures.

The quick restoration of Chávez, however,avoided this test.
For its part, the Bush State Department badly bungled
by publicly endorsing what quickly proved to be a short-lived and
unconstitutional change of government, even as it sought to justify its
ill-considered posture based on its reading of the principles of the Inter-
American Charter (U.S. Department of State 2002).

Responding to Latin American Pressures

To keep the trade ball rolling forward in the Western Hemisphere, the
Bush administration has continued the bilateral FTA negotiations with
Chile initiated by the Clinton administration and has acquiesced to Central
American pressures to launch FTA negotiations, while engaging in
the ongoing FTAA negotiations as best it could until Congress finally
granted trade-negotiating authority in August 2002.

The administration also sought and won congressional renewal of the Andean
Trade Preference Act (ATPA), which gives the Andean nations duty-free treatment
for certain exports, and of the Generalized System of Preferences (GSP),
which provides duty-free benefits to the vast range of developing countries
and to those in South America that do not benefit from the ATPA
or CBI programs.

In a speech at the OAS on January 16, 2002, President Bush
announced that the United States would explore a free trade agreement
with the five countries of Central America. In explaining the timing of
the announcement, a senior USTR official said, “First of all, we were
responding to continual expressions of interest by Central America”
(USTR 2002c), most recently reaffirmed to Bush administration officials
at the Quebec Summit. Once again, the initiative came from Latin America.
Sounding like an official from the Treasury Department, the USTR
official added, “Secondly, following a recent cycle of elections, there are
new governments in Central America particularly interested in reform
and we want to enhance that” (USTR 2002c).

Opening a new trade front also fit the administration’s “competition
in liberalization” strategy, as well as increasing the momentum in the
hemisphere toward completing the FTAA by 2005 (USTR 2002a). It
could serve to line up the Central American parties behind U.S. positions
in the FTAA talks. The announcement was timed to offset another
move: in order to garner votes in the House of Representatives for the
fast-track decision in December, the administration had rescinded some
concessions made in the enhanced Caribbean Basin Initiative (CBI), to
the distress of the Central Americans.

The President’s speech, scheduled partly to dispel allegations
that Bush had lost sight of Latin America in
the wake of the terrorist incidents of September 11, served to focus
senior-level attention and to provide a deadline for a decision.
In mid-February 2002, Uruguayan president Jorge Batlle visited
Washington and appeared to be following up on his earlier public
expressions of interest in an FTA with the United States. If so, he was
disappointed, as the Bush administration did not want to appear to be
dismembering MERCOSUR at a time when it was seeking Brazil’s cooperation
in both global and regional trade negotiations. Instead, the Bush
administration agreed with Batlle to establish a Joint Commission on
Trade and Investment. The United States held out hope for Uruguay by
noting that it had created a similar mechanism with Chile in 1998 (USTR
2002b). The U.S.-Uruguay bilateral talks will contemplate the compatibility
of an FTA with MERCOSUR’s common external tariff; but one
senior U.S. official admitted, “It will be hard to square that circle.”

CONGRESSIONAL WARS

Despite certain of the aforementioned favorable domestic political
trends and its own greater homogeneity and commitment, the Bush
administration still has had to struggle mightily to wrest trade promotion
and fast-track authority from the U.S. Congress. To win the first test in
the House, the administration had to promise temporary import relief
for steel manufacturers, offer guarantees to the citrus and textile industries,
and claw back some of the trade benefits granted in 2000 to CBI
countries and to sub-Saharan Africa (Alden 2001). Even with the
enhanced weight of the post-9/11 presidency, the administration triumphed
by a single vote, 215–214, in a largely partisan tally at the end
of the 2001 congressional session. Democrats voted against, by 189–23;
Republicans voted in favor by 194–21 (New York Times 2001). Still, this
outcome was a marked swing from the 1998 tally, which the Clinton
administration lost by 63 votes.

The administration won the next grueling battle for TPA in the
Senate by a more comfortable margin (66–30), but only after the
Democrats extracted major concessions in trade adjustment assistance
(TAA). In legislation passed in late May, the Senate sharply expanded
the existing TAA program and set new precedents for coverage of tradedisplaced
workers (U.S. Senate 2002; Chen and King 2002). Income benefits
would be extended by six months, and funds available for training
programs would jump to $300 million. For the first time, displaced
workers would receive a tax credit for purchasing qualified group health
insurance coverage. TAA coverage would be extended to an estimated
60,000 workers, including some secondary workers who supply importimpacted
plants. Under a pilot program, older workers would be eligible
for wage insurance; workers over 50 who took lower-paying jobs
could receive, for two years, as much as $5,000 a year in wage insurance.
Another innovative program would help communities develop
strategic plans following job losses, providing such communities with
technical assistance, loans, and grants.

The overall cost of the proposed TAA was estimated at $12 billion
over ten years, or about triple the financing levels of the existing assistance
programs (Mitchell 2002). Perhaps this better balancing of trade
liberalization with worker protection would contribute, if not immediately
than in the long run, to recreating a bipartisan majority behind
freer and fairer trade.

After some intense partisan jockeying and personal squabbles, just
before midnight on July 25, a joint House-Senate conference committee
reached agreement on the Trade Act of 2002 that contained the key
accords that each chamber had been approved separately. The following
day, Bush made a rare visit to Capitol Hill to personally lobby House
Republicans to rally behind the measure.

In the early morning hours of July 27, the House passed TPA by 215–212
(with 190 Republicans and 25 Democrats in favor, 27 Republicans
and 183 Democrats plus 2 independents in opposition).
President Bush joked that the margin of victory had
tripled since the December vote (from 1 vote to three). In its last vote
before leaving Washington for an August recess, the Senate passed the bill
by a secure margin of 64–34, with 20 Democrats joining 43 Republicans
and 1 independent to give the President trade promotion authority for five
years, with renewal possible for an additional two years.

In the White House signing ceremony on August 6, Bush acknowledged
the role that Latin America had played in the internal U.S. political
struggle. He thanked the diplomats present in the East Room,
addressing by name the ambassadors from Ecuador and Peru.
I appreciate your hard work on sending the message of trade to
members of our Congress. I want to thank you for your diligence,
and I want to thank your Presidents for their care and concern about
this incredibly important initiative. . . . I want to thank the ambassadors
for their role in getting this bill passed. . . . (Bush 2002)

It was an extraordinarily candid recognition by the President of the
United States of the transnational political alliance at work among the
integrationists throughout the hemisphere.

While the passage of TPA was a major legislative victory, during
2002 the free-trade credentials of the Bush administration were tarnished
by the rush of domestic politics. White House political advisers,
focused on gaining Republican majorities in both houses of Congress in
the midterm elections, responded to political pressures that might swing
key congressional contests and repeatedly trumped economic officials
concerned with market efficiency or fiscal soundness. The administration
itself initiated protectionist measures for the steel industry in the
hope of bolstering the prospects of Republicans in steel-producing districts,
even as Zoellick argued that this was the price for critical congressional
votes for TPA.

More egregiously, Congress passed a farm bill that sharply
increased agricultural subsidies, embarrassing U.S. trade officials who
for years had been chastising the Europeans and Japanese for protecting
their domestic farmers at the expense of global efficiency and developing-
country producers. Some administration spokespersons, including
those at the Department of Agriculture, initially opposed this
trade-distorting measure; but Bush signed the bill on May 13, 2002, fearing
that a veto could compromise Republican chances in agricultural
districts in the November elections, and even his own reelection.

The Latin Americans were alarmed at the many compromises the
Bush team was making with domestic constituencies––whether for the
noble objective of gaining a congressional majority behind TPA or for
partisan advantage––in agriculture, textiles, citrus, and steel, among other
products of great interest to regional producers. Bush trade officials
sought to persuade their foreign counterparts that trade negotiations
would be the best way to cajole Congress to rescind these measures and
to forestall new protectionisms, but foreigners wondered whether U.S.
trade negotiators would have sufficient political power to negotiate balanced
agreements that constrained their own trade restrictions and also
made reciprocal concessions to foreign producer interests.

THE ENDGAME

The TPA vote was a high––perhaps the highest––domestic hurdle facing
U.S. proponents of the FTAA. During the prospective FTAA bargaining sessions,
U.S. trade negotiators will have to consult closely with a multiplicity
of interest groups, NGOs, and members of Congress; but once an agreement
is signed, it will be difficult for the U.S. Congress to vote it down. If
Jimmy Carter could persuade two-thirds of the U.S. Senate to pass the
Panama Canal Treaties, with all of their negative symbolism, George W.
Bush or his successor in about 2005 should be able to garner the necessary
simple majorities behind the positive imagery of the world’s largest
free-trade pact, stretching from Alaska to Argentina. In addition to all the
economic self-interest arguments, the Executive Branch will play its trump
card––the security rationale––with powerful effect as it paints the FTAA as
the centerpiece of U.S. strategic policies toward Latin America.

In this final push, the U.S. President will be accompanied on Capitol
Hill by as many as 33 democratically elected leaders, underscoring how
critical the FTAA is to maintaining economic liberalization and democratic
reforms in their countries, how it is precisely in times of turbulence that
the region needs the stabilizing anchor of a major trade accord (Feinberg
2002). They will also explain how they would prefer to cooperate with the
United States on a host of important issues, from antiterrorism to environmental
protection, and how they look forward to celebrating the Western
Hemisphere’s new economic-security alliance for the twenty-first century––
an alliance that will serve as a strong and stable platform from which
the United States will be able to project its power around the world.
During its first two years in office, and especially in 2002, the Bush
administration’s trade policy has been heavily preoccupied with
domestic politics.

Now that it has extracted trade promotion authority
from Congress, it will have to concentrate on negotiating with Latin
America. These negotiations, which will encompass a broad agenda of
trade and trade-related matters, will be arduous. The administration will
have to balance many pressures as it seeks middle ground on a range
of contentious issues in order to satisfy U.S. constituencies without
alienating Latin America. It will have to factor in the simultaneous WTO
Millennium Round talks, also scheduled to finish in 2005. Global talks
may take some pressure off the FTAA by tackling such contentious
issues as agricultural export subsidies and antidumping, but FTAA
negotiators may withhold concessions pending 11th-hour bargaining in
the global round.

As the largest South American country, and with the most astute
negotiators, Brazil will play a leading role in the FTAA endgame, which
Brazil and the United States will cochair.10 It is not surprising that the
two nations with the largest domestic markets and with globally diversified
trading patterns face the greatest protectionist pressures and have
been the most ambivalent about regional integration. The 2002 U.S.
farm bill, which boosted subsidies in several product areas of interest to
Brazil, caused Brazil to question whether the U.S. political system could
deliver on freer trade, but also gave Brazil additional incentives to enter
into a regional trade pact, the rules and understandings of which might
roll back such protectionism and make it less likely in the future. As a
tough bargainer, Brazil can be expected to resist certain measures, such
as trade sanctions tied to social behavior, that Latin Americans fear
would open the door to a new protectionism.

Should political forces that have been vociferously critical of free
trade gain the presidency in Brazil, its negotiators will be even tougher
in their defense of particular national economic interests. But in the end,
it is likely that Brazil will not want to be excluded from a hemispheric
accord or to risk jeopardizing its cherished leadership role by abandoning
at the final moment the quest that Latin America has pursued with
such purposefulness for so long.
As the demandeurs and with so much to gain, Latin American negotiators
will have to be realistic about the ultimate asymmetries of power.
As Mexico did in negotiating the NAFTA, they will have to accede to
many U.S. pressures, including those designed to shield politically sensitive
sectors from competitive imports. Such a flawed Free Trade Area
of the Americas should be understood as an ongoing project and as a
historic accomplishment for Latin American diplomacy. There will be
time enough in the future to revisit the agreement’s many imperfections.

NOTES
In preparing this paper, the author benefited from informal conversations
and interviews with many officials in the U.S. government, Latin American governments,
and international institutions, who preferred to remain anonymous.
For their valuable comments on earlier drafts, the author wishes to thank Jorge
Domínguez, Gary Hufbauer, Jeffrey Schott, Jonathan Hueneman, and Kati
Suominen. Elizabeth Erwin provided able editorial assistance. Portions of this
article draw on a paper presented at the conference “Competing Regionalisms
in the Americas,” organized by Oxford University and El Colegio de México,
Mexico City, March 14, 2002.
1. The Central Americans had been pressing the United States for an FTA
at least since 1997, as noted in Salazar-Xirinachs 2002. For an early example of
the intellectual case, presented at a Washington, DC, conference in 1995 by two
leading Central American economists, see Lizano and Salazar-Xirinachs 1997.
2. For overviews, see Salazar-Xirinachs and Tavares de Araujo 1999;
Tussie 1998; Bernal 1996; Devlin and Ffrench-Davis 1999. See also the essays in
Jatar and Weintraub 1997; and Burki et al. 1998.
3. The Chileans, for example, sought an FTA with the United States to
enhance their nation’s worldwide image. See Butelmann and Meller 1995.
4. For a succinct survey of the views of greens and blues, see Roett 2001;
see also Korzeniewicz and Smith 2001.
5. For a detailed political analysis, see Baldwin and Magee 2000, especially
table 1, p. 7.
6. For Zoellick’s thoughts before taking office, see Zoellick 1999–2000, 2000.
7. The White House and other agencies would play more central roles in
the domestic political task of guiding trade legislation through Congress, where
Zoellick’s strong personality sometimes ruffled feathers. In the March 2002 decision
on protection for the steel industry, with its important implications for
domestic politics and the November 2002 congressional elections, the president’s
chief political adviser, Karl Rove, reportedly advocated stiff tariffs to protect
steelmaking jobs. Predictably, Zoellick sought a compromise that balanced
free-trade precepts with such political realities (Kahn and Sanger 2002).
8. For a discussion of the role of the state and institutions in advancing
trade policy, see Hurrell 2001.
9. There were, however, some purist holdouts. See Bhagwati 2002.
10. On the dangers of Brazil’s overestimating its bargaining power, see
Mackay 2002, 15.

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Victor Bjorgan - Publisher of Bloggers of The Americas Victor Bjorgan – Publisher of Bloggers of The Americas

Dear Readers of our blog: Starting now, TheAmericasPost.com will publish papers and essays from prestigious academics and decision makers within the US intelligentsia. Those documents will focuse on interamerican relations, and will bring us light into the way of thinking of the United States in relation to The Americas. In this case,  this working paper of 2003 will enlight us about US policy toward The Americas during the Bush Administration.  Hope you will enjoy this paper written by RICHARD FEINBERG.

Mr. Feinberg served as President Bill Clinton’s Senior Adviser for Inter-American Affairs and was a principal architect of the first Summit of the Americas in 1994. He is now Professor of Political Economy at the University of California, San Diego. Professor of International Political Economy; Director of the APEC Study Center University of California San Diego; Chair of the Global Leadership Institute. He is a Ph.D., Stanford University, 1978 (international economics) University College, University of London. Concentration in British history and a  B.A.in Brown University, 1969 (cum laude, European history). As The Publisher, our TheAmericasPost.com gives full credit for this paper to Mr. Richard Feinberg and to the University of California, San Diego.