A.  Evolution of Integration – history of previous initiatives;
      bilateralism and regionalism; FTAA (Summit Process
      and current structure) Conclusion – readiness throughout
  hemisphere.

B. Four Points of Departure Towards a Theory of Western Hemispheric Integration

C. Application on 3 areas – governance, legal academia, and
     Legal education.

II.      Evolution of Integration

A. Ongoing negotiations – latest of series of initiatives

1. 1826 – Panama Congress (Bolivar) Spanish America; U.S. was invited but delegates did not participate; three additional congresses through 1865
 
1. 1888 – U.S. Sec. Of State James Blaine obtained Cong. Approval for first InterAmerican Conference (Washington D.C. Nov. 1889).  Lasted 6 months and included a 42-day railroad trip across U.S. for all 73 delegates.  First time concept of integration includes entire continent and focuses on expansion of commercial and political cooperation.

3.  Second-half of XX Century
1956 – 19 national delegations met in Panama to invigorate the OAS.  Committees were convened and Declaration of Panama paved way for establishment of IADB and Alliance-for-Progress.

1967 – Punta del Este, Uruguay – goal of strengthening Alliance for Progress, but instead Declaration called for establishment of Lat.Amer Common Market by 1980 (excluding U.S. & Canada)

Emergence of other RTAs—(sub-regional):

a. Lat. Amer. Free Trade Assoc. (LAFTA)
Faltered in 1970s and was succeeded by Latin American Integration Association (LAIA or ALADI) in 1980.  Approach: bilateral trade accords that can be multilateralized – gradual and progressive formation of Lat. Amer. Common Market.
 
b. Central American Common Market – longest
functioning sub-regional agreement; halted in 1969 and revived in 1984.  Contains a customs union (Guatemala, El Salvador and Honduras)

c. Caribbean Community & Common Market
(CARICOM) Founded in 1973.

d. Andean Pact (Colombia, Venezuela, Ecuador & Peru) Chile withdrew.  Originally focus was development and not trade liberalization.

e. G-3  (Mexico, Colombia & Venezuela)

1986 – Mexico became first Lat. Amer. Country to join GATT.

1988 – U.S. and Canada sign CUSFTA (no accession clause).  Mexico and U.S. begin talks of bilateral U.S.-Mexico FTA.  Canada also begins bilateral talks with Mexico.  Genesis of NAFTA.

1989 – Treaty of Asuncion creates MERCOSUR – Common Market of South with an effective date of Jan. 1, 1995 (one year after NAFTA)

1990 – Enterprise of the Americas Initiative (EAI)
(1) Expansion of Trade; (2) Promotion of Investment; and (3) Debt-Relief.  Strengthened CARICOM and Caribb. Basin Initiative.

1992 – NAFTA negotiations launched with conclusion in early 1993; in Nov. 1993 Congress votes up and NAFTA becomes effective Jan. 1, 1994.

1994 – Conclusion of Uruguay Round (Marakesh April 1994) – Can, US and Mex identify Chile as candidate for accession to NAFTA.

Fast-Track Authority lapses, Clinton Admin. Unsuccessful in obtaining renewal, but calls for first Summit of the Americas, which is the genesis of the FTAA.

U.S.-Chile FTA fails because of lack of Fast Track.

B. Free Trade of the Americas Agreement

1. 1994 Miami Summit—focus on 3 issues –
Consol. Of Democracy; growth & prosperity (trade growth, better labor and environment cond.) and cooperation on social issues (poverty allev., health, education, job creation).  This is the concept of the Summit Process.
 

Adopted Miami Declaration and Plan of Action (23 initiatives)  and created tri-partite institutional committee (OAS, IADB, and ECLAC) for technical support.  Summit Implem. Rev. Group (SIRG created) (Ministerials)

2. 1998 Santiago Summit – 27 initiatives in 4 major
themes: Education, Pres. & Strength. Democracy; Econ. Integration & Free Trade; Eradication of Poverty.

Declaration mandated trade ministers (SIRG) to conclude negotiations for FTAA no later than 2005. FTAA to be SINGLE UNDERTAKING and consistent with WTO.  Must be transparent and must take into consideration differences in stage of development and sizes of economies throughout hemisphere – goal is to provide full participation by all parties.

3. 2001 Quebec Summit.  Introduced theme of
 “realization of human potential” adding to social dimension of FTAA.  Also called for greater participation by civil society and agreed to release draft of working committees as they become available.

C. Current FTAA Structure

1. Summit Process – Heads of State
2. SIRG – Technical Committee on Institutional Affairs (future Secretariat) – Trade Ministers
3. TNC (Trade Negot. Comm) – Vice-Ministers
Oversee work of 9 negotiating committees
 
4.  Negotiating Committees:

a. Market Access
b. Investment
c. Services
d. Government Procurement
e. Dispute Settlement
f. Agriculture
g. Intellectual Property Rights
h. Subsidies
i. Antidumping and Countervailing
j. Competition Policy
 
5.  Interim Secretariat –
6. Technical Support by OAS, IADB, ECLAC and PAHO.
7. NGOs – input through TNC, Committees and Multilaterals.

D. Timeframe

First draft – available July 2001 (bullet points)
Second draft – October 2002
Final draft – January 1, 2005
Effective Date – No later than December, 2005.
 
III      FTAA and Hemispheric Integration – 4 Points of Departure Towards a Theory

A.  Substantive Concept: Beyond Trade (Integration)
 
1. Consistent throughout the Summit Process –
2. Three dimensions – political (democracy & rule of law); (2) economic (trade & development); (3) social (education, health, equality, and realization of human potential)
3. These three dimensions are reflected in institutions:
Summit Process – political
FTAA – economic
OAS-IADB-ECLAC-PAHO – social

B.   Approach: Bilateralism vs. Regionalism (Degree of Integration)
 
4. End of Unilateralism – GSP (Important to U.S.)
5. New Wave of Bilateralism – U.S. leads
6. Hybrid bilateralism – One with Group.
7. End of Sub-Regionalism – e.g., MERCOSUR
8. Regionalism within Multilateralism

E. Need for Typology – Legal Instruments and Institutions

1. Parties
2. Substantive (political, economic, social)
3. Institutional
 
F.   Spatialization

1. For Cohesive Theory of Integration to Emerge – need to reaffirm recognition of phenomenon of global economy.

2. This leads to analysis of “spatial economy” –  For this I draw on the work of Prof. Masahisa Fujita (Kyoto University); Paul Krugman (MIT) and Anthony Venables (London School of Economics).  The Spatial Economy: Cities, Regions and International Trade

3. Rooted in some models advanced in XIX Century used to explain urban economics.  These models sought to depart from history to explain current phenomena; the new focus was geography.

4. Early 1970s a new economic geography began to emerge when a number of theorists applied the analytical tools of industrial organization theory to international trade.

5. Those concepts evolved to involve economic growth and development in the mid 1980s and early 1990s and, according to Prof. Krugman, remain basically  intact today.

6. Concept is simple: concentrations of economic activity, population, industrial clusters, etc., survive and grow because of some sort of agglomeration economies, in which the spatial concentration itself creates a favorable economic environment that supports further or continued concentration.  The graphical representation of this model is the circle.

7. Interaction between these circles suggests a linkage (hubs-and-spokes)—Model for bilateralism, which is the genesis for regionalism.

8. With regards to international trade, bilateralism has been present for many centuries.  What we begin to see in the XIX Century and repeatedly throughout the XX Century is the movement towards regionalism.  In the Western Hemisphere that was attempted in the early summits of 1835 and 1888 and again with the multiple initiatives of the late XX Century.

9. If we look at the international trade activity of each party we see that there are concurrent trade obligations with different terms.  Hence the suggestion that such obligations appear like concentric circles around a vertical axis.

10. What is different now in the Western Hemisphere?  First, the presence of  democratic principles and institutions throughout the hemisphere.  All 34 countries (except Cuba) have democratically elected governments that enforce the rule of law.  Ongoing reforms are aimed at improving all sectors of governance – accountable executives free of corruption; independent judiciary; more representative legislative branch, etc. Venezuela and Colombia.

11.  Second, economically, reforms have been made that embrace the principles of a market economy, respect private property, and abandoned import-substitution and protectionism.

12.  Third, socially, close to 20 years of reform have widened the middle-class and have brought some sense of equal opportunity.
 

IV Application

 A.  Governance -- TPA

1. Substantively – While primarily trade bills (TPA and Andean Trade), they link other goals to trade policy.  In case of Andean Trade – drug policy.

2. Institutionally -- Elicit debate on internal (U.S.) balance of power between Congress & Executive; bring up issue of federalism (impact on states) and sovereignty (national control over international agreements).

B.    Legal Scholarship/Academics – FTAA Conference

1. Substantively – Beyond Law and Economics

2. Institutionally – Departments throughout Campus.
 

 C.   Legal Education – Hemispheric Integration Seminar

1.  Substantively – Multidisciplinary; multi-skills (languages, IBT problem-solving; brief-writing analysis; paper)

2.  Institutionally – Begin with NAFTA course;
Bring in WTO (Brief); End with FTAA (paper)
 

V. Questions