Washington The Obama administration, which is negotiating separate free trade deals with Asian and European countries, is “exploring” a regional trade plan for the Americas that would be the most ambitious hemispheric initiative in years.
U.S. Secretary of State John Kerry said in an interview that he would like to first seek an agreement to deepen the existing North American Free Trade Agreement (NAFTA) with Mexico and Canada, and to expand it afterward to the rest of Latin America.
“It’s something I actually have asked some folks here to explore, and I’ve had conversations with a couple of people outside of here who were very knowledgeable about hemispheric relationships,” Kerry said. “And they’re very encouraging about it, so we’re going to try to do our due diligence on this, and I’m really hopeful.”
NAFTA will turn 20 years old in 2014, and has lost much of its earlier impetus in recent years. U.S. officials say next year’s anniversary will be a golden opportunity to relaunch it.
In the rare interview on Latin American affairs that he gave me for the Miami Herald and “Oppenheimer Presenta” on CNN en Espanol last week, Kerry suggested that the idea of strengthening NAFTA is more than a theoretical aspiration. He said he has been discussing it with former U.S. ambassadors and trade representatives, and that he plans to put it on the table.
The United States, Mexico and Canada would be “the major block of it, reaching out to the rest of Central America, the Caribbean, Latin America,” Kerry said. He added that the plan would be to start in North America, because several South American nations are not yet willing to forge closer commercial ties with the United States.
Asked when he would do that, Kerry noted that he has only been on the job for eight months, and that he has another three years ahead of him. “We’re not finished, unless I screw up,” he said, laughing.
Top aides to Kerry say the plan to relaunch NAFTA could come as early as February, when President Barack Obama is scheduled to meet with his Mexican and Canadian counterparts at a North American Leaders’ Summit in Mexico. That summit is supposed to be a regular annual meeting, but it did not take place this year.
The United States has not proposed a new trade bloc in the Americas since negotiations for the Free Trade Area of the Americas collapsed in 2005, when Brazil, Argentina and Venezuela effectively killed the idea at a summit in Mar del Plata, Argentina, attended by then-President George W. Bush.
Since then, the United States has signed separate trade deals with Peru, Colombia and Panama, but has not tried to resurrect plans for a regional free trade deal in the Western Hemisphere.
Instead, the Obama administration has launched a Trans-Pacific Partnership (TPP) negotiation with 11 Pacific rim countries — mostly Asian countries such as Japan and Malaysia, but also including some Latin American Pacific Coast countries, such as Mexico — and a separate Transatlantic Trade and Investment Partnership (TTIP) with 28 European Union nations.
If Washington signs the proposed trans-Pacific and trans-Atlantic trade agreements, several major Latin American countries not included in the TPP — such as Brazil, Argentina and Venezuela — would be left outside the two biggest global trading blocs.
According to top Kerry aides, the three NAFTA countries are planning to discuss, among other things, a regional energy agreement. Last week, Mexico’s Congress passed a historic bill that will change the constitution to end 75 years of total government control over its oil reserves, allowing foreign investors to help develop unexplored oil fields.
The rapid increase in trade between the United States, Mexico and Canada slowed in recent years in part because of stiffer border controls in the aftermath of the 2001 terrorist attacks in New York and Washington, and also because anti-Mexican sentiment fueled by Fox News anchors and other U.S. anti-immigration zealots has inhibited U.S. policy-makers from pushing for deeper economic ties with Mexico.
My opinion: There is nothing wrong with the Obama administration’s initiatives to create U.S.-Asia and U.S.-European economic blocs, but it doesn’t make sense to do that without U.S. partners in the Americas. If the United States wants to effectively compete with China and other emerging economic powers, it needs to build manufacturing and services supply chains in Mexico and other Latin American countries.
In that sense, Kerry’s revelation about a possible relaunching of the NAFTA deal is welcome news. And judging from the latest American University poll, there is no excuse for not doing it immediately, at the upcoming three-country summit in Mexico.