MIAMI -- Negotiations to establish a Free Trade Area of the Americas (FTAA) ended two weeks ago with the participating countries saying that they would try to bring a watered-down version of the FTAA into existence by January 2005. But few believe that will actually happen -- mostly because the United States and the region's other economic powers remain so far apart on the same host of issues that led to the collapse of the 1999 World Trade Organization (WTO) meeting in Seattle and the WTO talks in Cancun earlier this year. The disagreements that have now put the FTAA on life support are something of a microcosm of the larger problems that have plagued the world of free-trade negotiations in recent years.
One of Bill Clinton's final acts as president was to secure Congress's approval for a $435-million component within the foreign-aid bill last October. This provision fulfills the pledge the United States originally made in 1996 at the Group of Seven (G-7) summit, where the world's seven richest governments agreed to finance a debt-relief plan for 41 of the poorest third-world nations.
The plan--formally called the Debt-Relief Initiative for Heavily Indebted Poor Countries and commonly referred to as the HIPC initiative--was announced by the G-7 countries with much self-congratulatory fanfare. Yet, fraught with serious shortcomings and all-too-familiar strings attached, it is under fire by some of the biggest advocates of third-world debt relief.