Bolivarian Alternative, or ALBA, explicitly rejects the
previous hemispheric consensus and seeks to build a vision of economic integration that excludes the United
States and others. The irony is that the nation most aggressively promoting the populist and protectionist
ALBA vision—Venezuela—already enjoys virtually free
trade: its primary exports of oil and gas are tariff-free
on world markets. Nonetheless, actions by Brazil and
the eight nations in ALBA (Venezuela, Bolivia, Ecuador,
Nicaragua, St. Vincent and the Grenadines, Dominica,
Cuba, and Antigua and Barbuda) broke the hemispheric
trade consensus barely a decade after every nation except Cuba had signed on to the FTAA.
A BACKUP PLAN
When it became clear that a broader hemi- spheric agreement would not be possible in the near term, the U. S. strategy shifted to conclude agreements with various sub- regions of the hemisphere, including Central America, the Andes, the Caribbean, and eventually
Brazil and MERCOSUR. The thinking behind this shift
was to stitch together agreements with subregions into
a virtual FTAA—joined with the 1994 NAFTA pact and
2003 Chile agreement—which Brazil, Latin America’s
largest economy by far, would then feel compelled to join.
To the extent that the strategy was designed to force
Brazil to the table, however, it was doomed from the start,
driven more by wishful thinking in President George W.
Bush’s administration than by a skilled analysis of Brazilian interests and likely reactions. Still, the effort led to
agreements with Central America (the Dominican Republic having been clumsily added after negotiations had already begun); Andean nations (Bolivia and Ecuador were
unprepared to conclude an agreement and thus dropped
out of the discussions, leaving Colombia and Peru to finalize bilateral accords with the United States); and Panama.
Yet even this strategy proved a bridge too far for hemispheric trade.
The Central America–DR agreement passed in 2005, and
Congress passed the Peru agreement in 2007. But the Colombia and Panama agreements, despite being signed in
2006 and 2007 respectively, have yet to be presented to
Congress. The midterm elections in 2006 put Democrats
in charge of both chambers, and the new Democratic leadership forced the renegotiation of the agreements to include greater protections for labor and the environment,
among other issues. The changes were sufficient to secure the approval of the FTA with Peru, but despite the
fact that the Colombia and Panama agreements contained
similar provisions, Congress sent a clear signal that it was
not ready to approve them, for reasons unrelated to trade.
It remains to be seen how the new Congress, elected on
November 2, 2010, will deal with these issues.
During the 2008 Democratic primaries, both Obama
and Hillary Clinton called for the renegotiation of NAFTA,
and opposed the pending agreements with Panama and
Colombia. After the election, the pilot project on cross-border trucking with Mexico under NAFTA was terminated, the Security and Prosperity Partnership for North
America was abandoned, and “Buy American” provisions
were inserted into the stimulus package. Even the relatively non-controversial initiative begun at the very end
of the Bush Administration to stitch together existing
hemispheric agreements in order to improve efficiencies,
called Pathways to Prosperity, was refashioned by the
Obama administration as a social development pact focusing primarily on microenterprise, rural development
and social inclusion of women and girls.
By the time of the 2009 White House Summit, Washington had worked itself into a political box on trade, to
the point where the best it could do was promote U.S.
exports in a down economy, rather than articulate and
support a more meaningful trade expansion strategy.
Some observers have argued that this means the trade
agenda no longer exists in the hemisphere. That’s not
correct. There is a huge trade agenda. It’s just that, for
the first time in modern history, not only is the U. S. not
leading the efforts, it’s not even part of the discussions.
THE COST (AND WAY OUT)
OF U.S. TRADE PARALYSIS
The lack of an overall organizing structure for hemispheric trade relations, and the subsequent lack of U. S. engagement on the issues, has had important economic, trade and strategic impli- cations that policymakers have yet to appreciate.
The bottom line is that as Washington remains reluctant to engage aggressively on hemispheric trade
expansion, arguing over whether trade is good for the
U.S., the rest of the world is moving ahead smartly to
take advantage of our recalcitrance.
Since the agreement with Colombia was signed, for
example, Colombia concluded negotiations with Canada,
the European Free Trade Association and the European
Union, and completed implementation of its agreements
with Chile, El Salvador, Guatemala, and Honduras. Colombia has also launched negotiations with erstwhile