What Is South America`s Concern About The Free Trade Agreement Of The Americas (Ftaa)
The Central American Common Market (CMAC) was established in December 1960 by Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, with the signing of the General Treaty on Central American Economic Integration. Costa Rica joined the integration agreement in July 1962. The 1960 Treaty provided for the creation of a common market that enters into force after the treaty enters into force. Although integration was very promising in the first decade, political and economic challenges in the region prevented the region from creating the common market that was previously planned. The process was renewed in 1993 with the Guatemalan Protocol, which provided a new basis for Central American economic integration. Member States had hoped to establish a customs union by the end of 2003, but this process was also delayed. With the signing of CAFTA-DR, it is not certain that the Central American region will establish a customs union or when. Currently, most intra-regional trade is tariff-free, but some exceptions remain, including coffee and sugar. Member States have agreed on a four-step common external tariff. About 80% of the common external tariff plan has been implemented.
(53) The attraction of foreign direct investment (FDI) is another reason for the creation of RTA, particularly for developing countries. Reducing restrictions on foreign investment through trade agreements improves investor confidence in a country, helping to attract foreign direct investment. Multinationals invest in countries to access markets, but they also do so to reduce production costs. One of the motivating factors driving Mexico`s interest in the creation of NAFTA was the direct attraction of iIn. It has also been a motivating factor for Central American countries and the Dominican Republic in THE CAFTA-DR. For Latin American and Caribbean countries, the free trade agreement can contribute at the national income level in the region, but not all economic sectors would benefit. Some economists believe that trade liberalization is needed to improve the region`s economic development. An International Monetary Fund (IMF) report found that trade opening in Latin America remained weak, citing “abundant empirical evidence” that the more open a country is to trade, the higher its growth. The report`s recommendations are that Latin American countries must “liberalize trade and strengthen their financial systems” in order to maintain economic growth. (69) However, Latin American countries are moderating additional measures to take advantage of trade liberalization and improve economic conditions. A study on the impact of a free trade agreement on Latin America indicates that any significant impact on incomes and inequality would take a long time to manifest.
It says that Latin America`s long-term economic health would require a marked improvement in education. (70) On June 6, 2003, the United States and Chile signed the U.S.-Chile Free Trade Agreement in Miami, Florida. On September 3, 2003, President George W. Bush signed the Act (P.L. 108-77) and the agreement came into force on January 1, 2004. The free trade agreement with Chile is the first U.S. agreement with a South American country and, at the time of its adoption, was expected to be a step forward in finalizing the free trade agreement. (24) WTO members are allowed to conclude the RTA under certain conditions. (13) Paragraphs 4 to 10 of GATT Article XXIV, as specified in the 1994 GATT Article XXIV Interpretation Agreement, provide for the establishment and operation of trade unions and free trade zones for goods trade. Article V of the General Agreement on Trade in Services (GATS) provides for the conclusion of RTA in the area of trade in services for both developed and developing countries.