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Broward County Policy On Free Trade Agreement of the Americas (FTAA)

Background

The Free Trade Area of the Americas (FTAA) is a proposed agreement initiated by the leaders of 34 Western Hemisphere nations to reduce or eliminate tariffs and other significant barriers to trade among all the nations of North, Central, and South America (with the exception of Cuba), in an effort to create the largest trading bloc in the world. According to the Under Secretary for International Trade of the U.S. Department of Commerce, the agreement would cover some 800 million people with a combined GDP of over $13 trillion. This essential expansion of NAFTA was proposed in December of 1994, eleven months following the effective start of NAFTA itself, and has been the subject of intense negotiation between the potential partners for most of the twelve years that have followed. FTAA has enjoyed the support of both the Clinton and Bush administrations. While multinational corporations have been overwhelmingly supportive, labor and environmental groups have decried the agreement. Organized opposition to the agreement has formed both domestically and in nations such as Venezuela and Bolivia, citing a lack of labor, environmental and wages standards. Many consider the effort permanently stalled. It is without question the most complicated agreement among nations in the history of the Western Hemisphere.

Disadvantages

Significant political opposition to the FTAA remains. While much debate continues regarding the actual numbers, there is consensus that well over 500,000 and maybe as many as 1 million American job losses can be attributed to NAFTA and movement of production to Mexico under the agreement. There is great concern about the acceleration of that number with the advent of the FTAA. Wage, quality of life, working condition, and environmental standards have not improved at the rates proponents of NAFTA had hoped for, and establishment and enforcement of those standards remains a major challenge under an FTAA. Complexities surrounding protection of intellectual property rights will also a significant hurdle to overcome. Political instability is also an ever-present concern in the full implementation of the FTAA.

Advantages

The advantages of this agreement to South Florida and Broward County are considerable. Given the critical role that South Florida and Broward County presently play as the U.S. gateway to trade in the Caribbean and Latin America, increased trade with the remaining Central and South American nations will undoubtedly increase business activity and spur business development in our region. It will increase the importance of our region as the pivotal access point to those markets not only for firms in the U.S., but throughout the world. It will serve to solidify our place as the international gateway to South and Central America. The establishment of an FTAA will also bring the need for an FTAA Secretariat that could very likely be located in South Florida. This alone will promote growth through the establishment of multinational corporate headquarters and a significant infusion of firms specializing in the technical aspects of international trade.

Recommendation

Given the advantages and potential development associated with the FTAA, Broward County supports the establishment of FTAA and the location of the FTAA Secretariat in South Florida.

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