THE PREPARATORY PROCESS 1994-1998

The effort to unite the economies of the Americas into a single free trade area began at the Summit of the Americas, which was held in December 1994 in Miami, U.S.A. The Heads of State and Government of the 34 democracies in the region agreed to construct a Free Trade Area of the Americas, or FTAA, in which barriers to trade and investment will be progressively eliminated. They agreed to complete negotiations towards this agreement by the year 2005 and to achieve substantial progress toward building the FTAA by 2000. The Heads of State and Government further directed their ministers responsible for trade to take a series of concrete initial steps to achieve the Free Trade Area of the Americas. Their decisions regarding these steps are contained in the Miami Summit's Declaration of Principles and Plan of Action.

During the preparatory phase (1994-1998), the 34 Ministers responsible for trade established twelve working groups to identify and examine existing trade-related measures in each area, with a view to identifying possible approaches to negotiations. The results of the preparatory work of the Groups were made available to the public. Four ministerial meetings took place during this preparatory phase: the first was in June 1995 in Denver, U.S.A., the second in March 1996 in Cartagena, Colombia, the third in May 1997 in Belo Horizonte, Brazil and the fourth in March 1998 in San José, Costa Rica.

In the San José Declaration, the Ministers set out the structure of the negotiations, agreed upon general principles and objectives to guide these negotiations, and recommended that their Heads of State and Government initiate the formal negotiation of the FTAA. The General Principles and Objectives agreed to by the Ministers are listed in Annex I of the Declaration.

The FTAA negotiations were formally launched in April 1998 at the Second Summit of the Americas  in Santiago, Chile. The Heads of State and Government participating in the Second Summit of the Americas agreed that the FTAA Agreement will be balanced, comprehensive, WTO-consistent, and will constitute a single undertaking. They also agreed that the negotiating process will be transparent and take into account the differences in the levels of development and size of the economies in the Americas in order to facilitate full participation by all countries. Furthermore, they agreed that the negotiations should proceed in order to contribute to raising living standards, improving working conditions of all people in the Americas, and better protecting the environment. Finally, they agreed upon a structure under which the negotiations would be conducted.

PROGRESS OF THE NEGOTIATIONS

The fifth Ministerial meeting - the first following the formal initiation of negotiations-took place in Toronto in November 1999. At this meeting, Ministers instructed the negotiating groups to prepare a draft text of their respective chapters, to be presented at the sixth Ministerial meeting. The negotiating groups responsible for market access issues were directed to discuss the modalities and procedures for negotiations in their respective areas. Ministers also approved several business facilitation measures, designed to facilitate commercial exchange in the Hemisphere. These measures, included in the Annexes to the Ministerial Declaration, were concentrated in the areas of customs procedures and enhanced transparency.

At the sixth Ministerial meeting, held in Buenos Aires in April 2001, a number of key decisions were made regarding the FTAA negotiations. Ministers received from the Negotiating Groups draft text of the FTAA Agreement, and, in an unprecedented move designed to increase the transparency of the process, agreed to make this text publicly available. The Technical Committee of Institutional Issues was created to consider the overall architecture of an FTAA Agreement (general and institutional matters). Ministers also highlighted the need to foster dialogue with civil society, and directed the Committee of Government Representatives on the Participation of Civil Society to forward to the Negotiating Groups the Civil Society submissions in response to the open invitation, which refer to their respective issue areas, and those related to the FTAA process in general. Ministers reiterated the importance of the provision of technical assistance to smaller economies in order to facilitate their participation in the FTAA

The Third Summit of the Americas was held in Quebec City on April 20 - 22, 2001. At this meeting, Heads of State and Government endorsed the decision of the Ministers to make the first draft FTAA agreement available as soon as possible to the public in all four official languages. This agreement was published on the Official FTAA Website on July 3, 2001.

In addition, deadlines were fixed for the conclusion and implementation of the FTAA Agreement. Negotiations are to be concluded no later than January 2005; entry into force will be sought as soon as possible thereafter, no later than December 2005.

As instructed by Ministers Responsible for Trade, recommendations on methods and modalities for negotiations were submitted by April 1, 2002, and market access negotiations were initiated on May 15, 2002. Principles and guidelines for these negotiations are set out in the Document on Methods and Modalities for Negotiations.

At the Seventh FTAA Ministerial Meeting, held November 1, 2002 in Quito, Ecuador, the Ministers took various steps to energize the negotiations. Among other things the Ministers confirmed the schedule for the exchange of initial market access offers, set deadlines by which new drafts of the texts of the FTAA Agreement will need to be produced, provided guidance to some of the FTAA entities on resolving issues in their negotiations, and made public immediately the second draft of the FTAA Agreement on the official FTAA website in the four official languages. Ministers also made public the Trade Negotiations Committee document on Guidelines or Directives for the Treatment of the Differences in the Levels of Development and Size of Economies.

At Quito, Ministers took an important step to address the needs of less developed and smaller economies in the region by approving a Hemispheric Cooperation Program (HCP) to strengthen the capacities of those countries seeking assistance to participate in the negotiations, implement their trade commitments, and address the challenges and maximize the benefits of hemispheric integration. The Trade Negotiations Committee (TNC), with the support of the Consultative Group on Smaller Economies (CGSE) was mandated to supervise the HCP. In this context, Ministers instructed the TNC, with the support of the Tripartite Committee, to facilitate meetings of the CGSE, inviting appropriate development and financial officials, international financial institutions, international agencies, and interested private entities to discuss financing and implementation of the HCP and to report on this at the next Ministerial meeting.

At Quito, Ministers confirmed the timetable established by the TNC for market access-related negotiations to exchange initial offers between 15 December 2002 and 15 February 2003; review offers and submit requests for improvements to offers between 16 February and 15 June 2003; and initiate the presentation of revised offers and subsequent negotiations on improvements as of 15 July 2003. The Quito Ministerial Declaration also directs the Negotiating Groups to achieve consensus on the greatest possible number of issues in each of the draft chapters of the FTAA Agreement, and submit new versions of the Chapters to the TNC no later than eight weeks before the Ministerial meeting in November 2003.

Ministers also reiterated the need to increase civil society participation in the FTAA process and exhorted all countries in the Hemisphere to strengthen and deepen their consultation processes with civil society at the national level. Moreover, Ministers encouraged the holding of civil society events organized parallel to the Ministerial and Vice Ministerial meetings, as well as the organization of regional and national seminars related to the process of establishing the FTAA. In addition, they instructed the Committee of Government Representatives on the Participation of Civil Society to foster a process of increased and sustained two-way communication with civil society, to identify and foster the use of best practices for outreach and consultation with civil society, and that its Third Report which describes the activities of the Committee as well as the range of contributions received during this phase, be published on the official FTAA Website.

The final phase of FTAA negotiations will be guided by the co-chairmanship of the Brazil and the United States. It was agreed that two meetings of the Ministers Responsible for Trade would be held, one in November 2003 in Miami, U.S.A., and one in 2004 in Brazil.

At their eighth meeting in Miami on November 20, 2003, Ministers reiterated their commitment to the Free Trade Area of the Americas and set forth a vision of the FTAA as follows:

“We, the Ministers, reaffirm our commitment to the successful conclusion of the FTAA negotiations by January 2005, with the ultimate goal of achieving an area of free trade and regional integration. The Ministers reaffirm their commitment to a comprehensive and balanced FTAA that will most effectively foster economic growth, the reduction of poverty, development, and integration through trade liberalization. Ministers also recognize the need for flexibility to take into account the needs and sensitivities of all FTAA partners.

We are mindful that negotiations must aim at a balanced agreement that addresses the issue of differences in the levels of development and size of economies of the hemisphere, through various provisions and mechanisms.

Taking into account and acknowledging existing mandates, Ministers recognize that countries may assume different levels of commitments. We will seek to develop a common and balanced set of rights and obligations applicable to all countries. In addition, negotiations should allow for countries that so choose, within the FTAA, to agree to additional obligations and benefits. One possible course of action would be for these countries to conduct plurilateral negotiations within the FTAA to define the obligations in the respective individual areas.

We fully expect that this endeavor will result in an appropriate balance of rights and obligations where countries reap the benefits of their respective commitments.”

Ministers instructed the TNC to develop a balanced and common set of rights and obligations applicable to all countries. These negotiations on the common set of rights and obligations will include provisions in each of the following negotiating areas: market access; agriculture; services; investment; government procurement; intellectual property; competition policy; subsidies, antidumping, and countervailing duties; and dispute settlement. On a plurilateral basis, interested parties may choose to develop additional liberalization and disciplines. The TNC shall establish procedures for these negotiations that shall, among other things, provide that: countries negotiating additional obligations and benefits within the FTAA shall notify the Co-Chairs of their intention to do so before the outset of the negotiations; and any country not choosing to do so may attend as an observer of those additional negotiations. Observers, by notifying the Co-Chairs, may become participants in these negotiations at any time thereafter. The results of the negotiations must be WTO compliant. These instructions are to be delivered by the TNC to the Negotiating Groups and the Technical Committee on Institutional Issues (TCI), no later than the seventeenth meeting of the TNC, that will be held in early 2004, to enable the negotiations to proceed simultaneously and to be completed according to the schedule.

Ministers instructed that the negotiations on market access be concluded by September 30, 2004.

They reaffirmed their commitment to take into account, in designing the FTAA, the differences in levels of development and size of economies in the hemisphere to create opportunities for their full participation and increase their level of development. They took note of the TNC Report on the results of the progress achieved in relation to the treatment of differences in the levels of development and the size of economies in each of the Negotiating Groups and reiterated the instruction to the TNC and to all the negotiating groups, in particular those undertaking market access negotiations, to translate this principle into specific measures so that they are reflected in the results of the negotiations.

They also welcomed the efforts of the CGSE, with the assistance of the Tripartite Committee, to implement the Hemispheric Cooperation Program (HCP) and cited the important steps that took place at the first meeting with donors. They received the TNC Report on progress in the implementation of the HCP and encouraged the countries, with the help of the Tripartite Committee, to finalize the TCB strategies as appropriate and to organize sub-regional meetings with donors to continue discussions on the TCB strategies. Ministers reiterated the commitment they made in Quito that the HCP will respond to the immediate assistance needs for the purpose of strengthening the participation of countries in the negotiations.

In accordance with their commitment to transparency assumed at the Santiago and Quebec City Summits, Ministers made the third draft of the chapters of the FTAA Agreement available to the public on the official FTAA website in the four official languages.

The Fourth Report of the SOC, which describes the activities of the SOC as well as the range of contributions received from civil society during this phase, was received. Ministers also welcomed receipt of the report on Best Practices and Illustrative Examples of Consultations with Civil Society at the National/Regional Level that was prepared by the SOC and instructed the SOC to make recommendations to the TNC on the means to broaden the mechanisms for disseminating information on the discussions, drawing upon the experiences of countries for distributing information to their civil societies.

Ministers also recognized the decision to hold meetings with civil society, in conjunction with the regular meetings of the SOC, focusing on issues that are topics of discussion in these negotiations and including a broad representation of FTAA government officials and civil society including business, labor, agricultural producers, NGOs, academics, rural and indigenous groups. They express their satisfaction that at least two such meetings are planned in 2004, one in the Dominican Republic on the topic of intellectual property rights and one in the United States on the topic of market access, including small business issues.

Ministers also expressed interest in creating a civil society consultative committee within the institutional framework of the FTAA upon the Agreement’s entry into force and requested the TNC to make a proposal on this issue for their future consideration, based on the recommendations made by the SOC in coordination with the TCI.

The next meeting of Ministers of Trade will take place in Brazil in 2004.

STRUCTURE AND ORGANIZATION OF THE FTAA NEGOTIATIONS

The FTAA negotiations are carried out under an agreed structure that is member-driven and ensures broad geographical participation. The Chairmanship of the entire process, the site of the negotiations themselves, as well as the Chairs and Vice Chairs of the various negotiating groups and other committees and groups, all rotate among participating countries.

The Chairmanship of the Negotiations rotates approximately every eighteen months, or at the conclusion of each Ministerial meeting. The following countries were designated to serve as Chairs and Vice-chairs of the FTAA process for successive periods during the negotiations:

The Ministers Responsible for Trade exercise the ultimate oversight and management of the negotiations. They meet generally every eighteen months and, since the negotiations were launched, do so in the country which is holding the FTAA Chairmanship.

The Vice Ministers Responsible for Trade, as the Trade Negotiations Committee (TNC), have a central role in managing the FTAA negotiations. The TNC guides the work of the negotiating groups and other committees and groups and decides on the overall architecture of the agreement and institutional issues. The TNC is also responsible for ensuring the full participation of all the countries in the FTAA process, ensuring transparency in the negotiations, overseeing the administrative secretariat, and overseeing the identification and implementation of business facilitation measures. The Committee meets as required, no less than twice a year, at rotating sites throughout the hemisphere.

Nine FTAA Negotiating Groups were created in the following areas: market access; investment; services; government procurement; dispute settlement; agriculture; intellectual property rights; subsidies, antidumping and countervailing duties; and competition policy. These negotiating groups have specific mandates from Ministers and the TNC to negotiate text in their subject areas and meet regularly throughout the year.

Three Committees and Groups address horizontal issues related to the negotiations. They are the Consultative Group on Smaller Economies, the Committee of Government Representatives on the Participation of Civil Society, and the Joint Government-Private Sector Committee of Experts on Electronic Commerce

In addition, a Technical Committee of Institutional Issues was created to consider the overall architecture of an FTAA Agreement (general and institutional matters). Finally, an ad hoc group of experts was established to report to the TNC on the implementation of the customs-related business facilitation measures agreed upon at Toronto.

Technical and Analytical Support: The Tripartite Committee, which consists of

the Inter-American Development Bank (IDB)

the Organization of American States (OAS) and

the United Nations Economic Commission for Latin America and the Caribbean (ECLAC)

The Tripartite Committee provides analytical, technical and financial support to the process and maintains the official FTAA Website. The individual Tripartite institutions also provide technical assistance related to FTAA issues, particularly for the smaller economies of the Hemisphere.

Venue of the Negotiations: has also been established on a rotating basis. Three countries have been designated as hosts of the negotiations, namely: from May 1998 to February 2001: the United States (Miami) ; Panama (Panama City) from March 2001 to February 2003; and from March 2003 to the conclusion of the negotiations: Mexico (Puebla).