By Humberto Márquez
CARTAGENA, Colombia, Mar 19 1996 (IPS)

Impressive figures provided a staunch buttress in favour of the Free Trade Area of the Americas (FTAA), as it entered a new round of negotiations in Cartagena on the Colombian coast this week.

More than a thousand American businesspeople congregated in this city early this week, to be joined by the trade ministers of 34 American states, Wednesday, in a concerted effort to complete the FTAA negotiations by 2005, as was planned by their presidents in 1994.

Though the process is soaked in rhetoric, scepticism – due to increasing protectionist measures by the main trade associate, the United States – and the apparent long way off of the year 2005, figures provided during the business meetings show the vast potential of the proposed trade bloc.

Documents from the Economic Commmission for Latin America and the Caribbean (ECLAC), the Latin American Integration Association and the Inter-American Development Bank (IDB) presented at the Business Forum, and to be seen in the Ministerial Meeting, showed a hopeful future for the venture.

Asia has been the main agent of increased world trade, quadrupling its exports between 1980 and 1993, with its imports increasing 15 percent per year in the case of the southern and southeastern nations, leaving Japan behind.

In the Americas, exports increased by some 60 percent in the 1980 to 1993 period, accelerating over the past few years: North American sales grew by nearly 10 percent per year and the Latin American counterparts, by seven percent.

Imports in North America increased by more than 10 percent per year in 1992 to 1995, though a decrease is predicted for 1996 to around seven percent. Latin American figures were high early this decade, though the annual growth rate fell in 1995.

If the trade success of Canada and the United States is seen as a side effect the North American Free Trade Agreement (NAFTA), which also includes Mexico, it is clear that for Latin America the increased exchange is a result of the integration agreements developed.

The Southern Cone Common Market (Mercosur) nations exported 62.2 billion dollars of goods in 1994 and imported 61.9 billion. Latin American participation in the imports went from 16 percent in 1980 to more than 26 percent in 1994, while exports went from 20 to 30 percent.

In the Andean Pact nations, Latin America became the market for 25 percent of its exports (from 16 percent in 1980), while the Latin American imports represented another 25 percent in 1994, compared with 13 percent 15 years ago.

While the Mercosur has the European Union (EU) as its main trading partner, the Andean Pact, which has exports worth 34 billion dollars and imports worth 30 billion, does most of its business with the United States.

This nation takes 42 percent of Pact nation exports and provides 34 percent of their imports.

The nations of the Central American Common Market (with 5.5 billion dollars of exports and 10 billion in imports) showed a slight increase of sales within Latin America, from 29 to 31 percent from 1980 to 1994, and a fall in purchases from 38 to 31 percent.

Chile, with 11 billion dollars of exports and similar levels of imports in 1994, saw most of its trade activity in Latin America – 22 percent of exports and 26 or imports – and the European Union – 23 and 21 percent respectively.

Mexico, with 62 million dollars of exports and similar imports, does very little business with Latin America (four percent), as 85 percent of its exports go to the United States, which provides 70 percent of its imports.

These figures form the basis of the basic outlines adopted by the FTAA negotiators, starting with the decision of the Latin American and Caribbean nations to move towards the hemisphere free trade area through joining together the subregional integration schemes.

Also, the chances are still open for other options, like broadening the NAFTA agreement in a sort of hemisphere Uruguay Round – something akin to the worldwide process which produced the World Trade Organisation (WTO).

The temptation to “build trade fortifications around the continent” is another braking factor, according to Colombian business representative Jorge Ramirez.

This would be bad news for the Mercosur, whose association with the EU is as productive as its relationship with hemisphere partners, if not more so.

Meanwhile Chile and Mexico have benefitted from negotiations working towards subregional schemes with their Latin American neighbours.

Lastly, the figures show that if a large-scale common market is consolidated within 10 years this will be a powerful arrangement as the 34 nations cover 39.6 million sq kms, have 745 million inhabitants and a Gross Domestic Product of 8.64 trillion dollars.

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