Globalisation, regionalisation & the Americas. The free trade area of the Americas: fuelling the 'race to the bottom'?

Abstract

The framing of the Free Trade Area of the Americas (FTAA) over a period of ten years is a project on a unique scale and with a unique significance. According to Robert Devlin, the FTAA is undoubtedly the most ambitious collective economic initiative in the history of the Western Hemisphere. The intention is to create the biggest market in the world, comprising 800 million people and a GDP of US$11 - 14 trillion. If it is successful, it will also bring to conclusion ten years of negotiation and bilateral and sub-regional trade agreements that will be essentially subsumed in the FTAA. However, prospects for finalising the Agreement look slim as negotiations on the scope and scale of the FTAA have reached an impasse when the January 2005 deadline passed without consensus. The failure to complete the Agreement raises significant questions about the raison d’etre of regional agreements, the relationship between globalisation and regionalism, and the balance between free trade and social interests. The debate surrounding the FTAA presents a particularly interesting illustration of the arguments for and against free trade agreements generally -- first, for their historic place in the global pattern and context of regionalisation within the Americas; second, for the issues raised by the current impasse. This paper explores the inherent flaws in the FTAA and how it might have potentially negative impacts on the region in terms of social, economic, environmental and political outcomes. The first part of this paper looks at the global and regional context of the FTAA and the growth of regionalism, mediated by the US and the EU. The second part looks at how regionalism and free trade, working through the FTAA, are seen to have serious drawbacks, which have generated a range of opposition, and led to the frustration of negotiations. This paper also questions whether, given the experience of NAFTA (North American Free Trade Area), the model itself is flawed; and whether the FTAA, in its far wider scope and significance for the Americas, will in effect fuel a ‘race to the bottom’. The final question is whether the situation can be retrieved, and whether changes to the FTAA, enabling it to promote economic, social and human development, will in fact be put in place