Integration in the Americas: Trade, Investment, Development and Security

Washington Policy Forum co-sponsored with the Hispanic Council on International Relations

WITH

Anne Alonzo
Senior Vice-President, National Foreign Trade Council

Cresencio Arcos
Director of International Affairs, Department of Homeland Security

Ramon Daubon
Vice-President, Inter-American Foundation

Together with the Hispanic Council on International Relations, the Mexico Institute held a forum on October 19, 2004 titled Integration in the Americas: Trade, Investment, Development and Security. A group of distinguished panelists attempted to tackle questions and issues focused on the shared challenges of trade, investment, development and security in the hemisphere from a variety of viewpoints. Many of these shared concerns intersect and cross-pollinate vis-à-vis the environment, crime and labor mobility.

Opening the panel, Anne Alonzo commented that expanded trade is extremely complex although sometimes it becomes an ideological debate rather than a practical debate. Despite its complexity, at its core, trade generates inter-dependence and leads to gains and losses. How we deal with labor and environment are some of the key factors in trade agreements adding to the intensity of the debate on both sides. Alonzo presented two main points to the audience. She explained the importance of understanding and looking at the current overall hemispheric trade relations and secondly used NAFTA as a case example for other trade agreements.

Alonzo noted that the Bush Administration has a "one-note policy" towards Latin America, but that this was better than other administrations whose position on Latin America has not always been clear. Of the 25-26 Free Trade Agreements on the table, about one third involve countries in the hemisphere. Alonzo cautions that regardless of the tremendous focus on trade in the hemisphere, this will be a messy affair at the end of the day. According to Alonzo, NAFTA (North American Free Trade Agreement) can easily be considered one of the most important agreements of our time, although too often it becomes the scapegoat of U.S. ails. Even though there are always criticisms to be made, NAFTA is a broad and encompassing trade and investment agreement. Even the non-trade side has helped stabilize our border and strengthened U.S.- Mexico relations, especially in the economic realm. Alonzo emphasizes that expanded trade is a tool, not a panacea and certainly not an ultimate solution. She predicts both that trade will certainly be on the table regardless of who wins the Presidential election, and she highlighted the increasing need of Hispanics' presence at the table.

Capitalism is an extremely powerful force, according to Ramon Daubon, but the positive benefits of which are concentrated only on those with the ability to control it. Due to educational, economic, and political disparities, some know how to take advantage of trade while others do not. As a result, much of dealing with those that are 'left behind' falls under the heading of policies to alleviate poverty. This type of offensive strategy treats poverty like a disease, as if it were the fault of those who are unfortunate enough to be inflicted with it. Daubon stresses that poverty is not 'the lack of possessing things,' rather poverty is the lack of 'possessing the power to change your own situation.' The problem is therefore not a lack of income; it is a lack of political power. We need to think of expanding trade in the context of political reform that gives everyone access to its benefits or at least a level playing field to compete in the market.

Daubon asserts that the problem is essentially political. It is not a problem of lack of resources. Bolivia and Argentina have huge quantities of resources yet they have enormous difficulty orchestrating their governments, policies, and citizenry in order to progress in a positive direction. It is important to realize that everyone has a place at the table, both the 'Tú's" and the 'Usted's,' we must develop a society that is capable of harnessing the ability of everyone. Democratic resolutions will be more successful than non-democratic resolutions because when you involve everyone the solutions inherit a greater buy-in, the solutions will therefore also become more sustainable. He concluded by commenting that what makes a country successful is the capacity to bring it everyone together. Development assistance can help, but in the end it is the political and democratic culture of a country that generates sustainability.

Cresencio Arcos asked the audience why it is that Asia is now rich and Latin America has been left behind. The rapid development of countries that had been further behind economically than Latin America in the 1960s is a problem not to be taken lightly and a cause for further scrutiny. The current security climate is focused on the prevalence of terrorist attacks, reducing the nation's vulnerability or the possibility of an attack and on minimizing damage (natural and man-made). How can we balance that against the need for economic growth and trade? Arcos admited that so much is at stake with security that finding a balance is often a challenge. Both private businesses and academic institutions are sharing concerns about the costs of tightened security. They point to the decrease in exchange students and highly skilled workers. Delayed product delivery is costing business thousands of dollars, further slowing down transactions and promises made to the customer. Considering the sizeable number of entries to the U.S. (650 million people per year), the challenge is daunting if not overwhelming.

Arcos notes that what Latin America needs is capital not trade. The importance of immigration from Latin America has not been overlooked as a source of capital considering the large amount of remittances, which are a quick source of money at no cost to the sending country. How do we keep moving towards free movement of people? Although he is not directly advocating labor mobility, it is imperative to balance controlling the borders while not sealing them either. Immigration is extremely complex and learning how to manage it is already proving a challenge.

Arcos concluded by affirming that security is a major factor in debates on trade and immigration. Security concerns may be onerous in many ways, but they are here to stay and we need to be creative in managing the points of intersection. The issue will not be the movement of goods; rather the conundrum we face is the movement of people. In the end, Arcos points to the growing Asian Pacific community as the source of the future success for Latin America.