® BuscaLegis.ccj.ufsc.br

THE SOUTH AMERICA’S COMMON MARKET ‘MERCOSUR’ AND THE NORTH AMERICAN FREE TRADE AGREEMENT ‘NAFTA’ – LOOKING FOR A FREE TRADE AREA OF THE AMERICAS IN THE 21ST CENTURY:

Deilton Ribeiro Brasil

Currently undertaking Commerce Masters degree at Milton Campos Law Faculty.

Author’s e-mail:inohan@inetminas.estaminas.com.br

Belo Horizonte-MG-Brazil-South America

July, 18, 1999.

10) A short view of the areas of commonality and remaining issues in the Belo Horizonte

9.1) – Other reports and contributions to economic integration in the Belo Horizonte declaration.

9.2) – Official FTAA documents approved for publication in the Belo Horizonte declaration.

9.3) – Terms of reference of the working group on dispute settlement established in Belo

Argentina, Uruguay, Paraguay and Brazil together have established by consensus, the Southern Common Market called as ‘MERCOSUR’, which represents a total population of 190 million inhabitants, living in a compared area larger than the total surface of the european continent,covering more than 12 million square kilometers. Just to have a better idea, the total gross domestic products (GDP) in the year of 1993 of these four countries was approximately US$715 billion. Although ‘MERCOSUR’ is not yet fully implemented, in 1990 the volume of business among these nations was about US$3,6 billion, and has been increased every year. For example, in 1994 the commercial interchange between these nations reached approximately about US$12 billion. Of course, the potencial for new business is even higher than this, as the level of business volume with other nations is something estimed of US$100 billion per annum.

Argentina is the second largest country. It has 2.8 million square kilometers in territory. The argentinean economy has been one of the fastest growing in the last few years, posting na average 8% growth yearly since 1991. The GDP in 1993 was about US$255 billion, distributed among approximately 33 million individuals. The per capita income is about US$7.700,00. Uruguay by its turn has the smallest population (3.1 million inhabitants) and the smallest territory (177 thousand square kilometers). It is an important international financial center. It has a increasing economy and generated in the year of 1993 a GDP approximately US$11,4 billion. The per capita income is about US$3.600,00. Paraguay has 406 thousand square kilometers and a total population of 4,6 million and had in the year of 1993 a GDP nearly of US$6.8 billion. It’s a growing economy.

Located in central and eastern South America, Brazil occupies an area of 8,547,403. square kilometers, equivalent to 20.8% of the Americas, and 47.9% of the South American land mass.Brazil is the world’s fourth largest country in terms of surface area, after Canada, China and the USA (if the former Soviet Union is included, then Brazil is the fifth largest country in the world in terms of surface area).

In 1997, Brazil had a population of 156.7 million. Projections indicate that this will increase to 200 million by the year 2020. In terms of the size of its population, Brazil stands in sixth place among the nations of the world. The rate of population growth has fallen over the last 30 years, from the 3% per year in the 1960s, to 1,9% per year in the 1980s, and 1,4% per year in the 1990s. Population density in Brazil is 17.2 persons per square kilometer, which is low compared to the world average of 38 persons per square kilometer.

The Federative Republic of Brazil is comprised of the (Federal) Union, the Federal District which is seat of Government, 26 States, and 4,974 Municipalities (in 1990). Its constitutional organization provides for three independent branches of Government: th Executive, the Legislative and the Judicial Branches. The states are grouped into five large regions. The largest of these regions is the North, which covers 45.5% of Brazil’s land area, and comprises the States of Rondônia, Acre, Roraima, Amazonas, Pará, Amapá and Tocantins. The Northeast region covers 18.2% of the Nation’s land surface and is comprised of the States of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe and Bahia. The Southwest covers 10.8% of the Nation’s land area and comprises the States of Minas Gerais, Espírito Santo, Rio de Janeiro and São Paulo. The South is Brazil’s smallest region, covering 6.7% of the Nation’s land area, and is comprised of the States of Paraná, Santa Catarina and Rio Grande do Sul. The Central-West covers 18.8% of the Nation’s land surface and comprises the States of Mato Grosso do Sul, Mato Grosso, Goiás and the Federal District.

Between 1990 and 1997 the rate of economic growth exceeded that of population growth. In 1997, per capita GDP rose US$ 5,032. In 1990, the United Nations Development Programme -UNDP introduced a new conceptual indicator - the Human Development Index -HDI, with the aim of measuring the quality of life and human progress on a global scale by assessing and comparing economic, social and environmental conditions in different countries. As a research tool, the HDI makes a significant contribution in that it provides a more effective measure of the quality of life than does GDP, as it brings together three essential conditions for human development: life span; access to knowledge; and access to the resources necessary to ensure decent living standards. The 1996 Report on Human Development points to an improvement in Brazil’s position on the International HDI Ranking, from 64th place in 1992, to 58th place in 1993. Brazil’s current position places it at the top of the list of countries classified as having Medium Human Development. The 1996 Report on Brazil was coordinated by the Institute of Applied Economic Research - IPEA, and was based upon data which, for the most part, relates to the 1991-95 period. The figures indicate that, despite the persistence of sharp social and

regional inequalities, in recent decades there has been a marked improvement in three of the indicators which make up the HDI (life expectancy, years of schooling, and income). The HDI Report reveals the existence of three ‘Brazils’. The first of these is made up of eight states (Rio Grande do Sul, the Federal District, São Paulo, Rio de Janeiro, Paraná, Mato Grosso do Sul, Santa Catarina and Espírito Santo) which manifest high levels of development, according to the parameters defined for international comparison, and responded for 49.0% of the Brazilian population. The second stretches north and west from Minas Gerais and is made up of six states (Goiás, Mato Grosso, Rondônia, Amazonas, and Roraima, and Amapá) and is ranked in the upper part of the Medium Human Development category, and accounts for 33.3% of the Brazilian population. The third Brazil consists of eleven states (Pará, Acre, Tocantins, and the states of the Northeast) and comprises 17% of the population. Indicators of inequality point to Brazil as having one of the highest levels of concentration of wealth in the world. However, the Gini Coefficient has dropped from 0.62 in 1990 to 0.58 in 1996. To produce the indicator on Poverty Through Insufficient Income, it was estimated that there were 42 million poor people in Brazil in 1990, corresponding to 30% of the total population. On the other hand, the number of people classified as ’indigent’, ie., whose income is insufficient to cover their basic food needs, is far lower. Poverty clearly has a regional component, and the proportion of poor people is greatest in the Northeast (46%), and in the North (43%), in contrast to the South where poor account for 20% of the population. The poor make up a high proportion of the rural population (39%), as compared to that of the large metropolitan areas, where they account for 29%, and to other towns where 27% of the population is classified as poor. However the proportion of poor people living in metropolitan areas has increased, from 26% in 1981 to 29% in 1990. The available recent data indicates that there has been a significant drop in infant mortality over the last decade, as a consequence of improved living conditions resulting from higher spending on health, sanitation, food and nutrition since 1986. Infant mortality has fallen from 163/1000 in 1940, to 87/1000 in 1980, 42/1000 in 1990, and 35/1000 in 1994. Brazil’s population profile has changed considerably, and there has been significant drop in the growth rate from 2.48% per year in the 1970-80 period to 1.35% per year in the 1991-96 period, as a consequence of falling birthrates.

At the end of 1996, the Brazilian labour force consisted of 73.1 million people, or the equivalent of 59.1% of the country’s economically active population. Of these, 59.9% (43.8 million) were

men, and 40.1% (29.3 million) were women. Of this total, 68.0 million persons were employed.

In 1996, there was a significant reduction in illiteracy, due to higher rates of enrolment in schools.Over a five-year period, illiteracy among persons over the age of 10 years dropped by 3 percentage points whereas the proportion of children between the ages of 7 and 14 years not attending school dropped from 15.5% to 8.8%. In regional terms, the percentage of children between the ages of 7 and 14 years actually attending school was lowest in the Northeast (86.4%) and highest in the Southeast (94.1%). From 1992 to 1996, for all regions of Brazil, the percentage of the population over 10 years of age who had at least concluded primary schooling (11 years of schooling on average) rose from 14.1% to 16.2%. In the Southeast this proportion was 19.5%, whereas in the Northeast it was 11.1%. Another point worth highlighting is that, over the same period, there was a marked improvement in levels of schooling among women. Up until 1989, the rate of illiteracy for persons over the age of 10 years was higher was higher among women than among men. Over the last decade, however, the level of schooling among women has risen to a point at which it was one percentage point higher than among men. In 1996, the proportion of women who had concluded their secondary education was 2 percentage points higher than for men. From 1992 to 1996, the percentage of men who had concluded (at least) secondary schooling rose from 13.4% to 15.1%, whereas for women the increase was from 14.7% to 17.3%.

The Brazilian Constitution of 1988 created the Unified Health System (SUS), with the aim of making medical and hospital care available to everyone. The SUS has a public network of health-care centers, out-patients facilities and hospitals, totaling 6.400 units, including public, university and philanthropic hospitals as well as private hospitals, which adds up to a total of 500,000 beds and 61.200 outpatients clinics. This signifies that there are an average of 3.16 hospital beds per thousand head of population, which is compatible with the standard established by the World Health Organization (WHO), of between 1.82 and 3 beds per thousand head of population. In 1997, the SUS hospitals network registered 12 million pacient internments, and the outpatients network provided 1.350 million patient services, of which: 529 million were

vaccinations or other procedures not requiring a doctor; 460 million medical and dental appointments; and the remainder were examinations or therapies of various types. The principal causes of death in Brazil, according to most recent consolidated date (1995) are: malignant neoplasia, strokes and heart attacks, pulmonary diseases, endemic heart diseases and circulatory diseases. These diseases account for roughly 44% of all deaths in Brazil. Traffic accidents, violence and drug-related deaths account for 12% of all deaths.

In 1996, 79.4% of the Brazilian population (122.5 million people) lived in urban areas, and the remaining 31.8 million lived in rural areas. There are roughly 40.2 million privately owned permanent dwellings, distributing as it follows: 73.6% owned, 12.3% ceded, 13.6% rent and 0.5% others. Despite the recent improvement, the basic public sanitation fails to reach of a vast proportion of the Brazilian population. In 1996, approximately 17% of the Brazilians lived in homes without access to the piped public water supply, 58% were not connected to sewage mains, and 27% were not served by daily rubbish collection. In the same year, 7.1% of the population had no access to electric power supply.

Brazil’s Gross Domestic Product (GDP) grew 3% in 1997, reflecting the recovery of the industrial sector over the period. Despite slower growth at the end of the year, as a consequence of adjustment measures taken in reaction to the Asian crisis, in the final quarter seasonally-adjusted growth was 0.5%. In terms of performance per sector, industrial growth was 5.5%, whereas services grew by 1.3% and agriculture 1.2%. However, IPEA foresees that in the first quarter of 1998 there will be a marked slowdown in economic activity, with GDP growing by 1.8% in the first quarter and 0.3% for the first half of the year. It should be noted, however that after the first half, the forecast is that agriculture will grow by 2.4% and services by 1.1%, whereas industry is forecast to drop by 1.5%. Indicators of the level of industrial activity, in December, showed a cooling of economic activity. Industrial activity declined by 5%, after having dropped 3.5% in the previous month, according to figures adjusted for seasonal factors published by IBGE. Thus average growth for the forth quarter was 2.7% below that of the previous quarter, nevertheless, it was 0.4% higher than the average for the final quarter of 1996. In December, among the industrial products surveyed, only mining (up 6.5%) and chemical (up 2.9%) production had increased. The greatest declines were reported in the areas of transport materials (down 17%) and clothing, footwear and cloth products (down 15.9%). In terms of categories of use, all segments reported a general decline, especially durable goods. In terms of the annual accumulated variation, negative results in the final two months of 1997 were partially responsible for the 3.9% growth rate of industrial production, as compared to 5.4% up to October. Performance was led by production of capital goods (4.7%) and intermediate goods (4.6%) whereas production of durable goods increased by less than in previous years, thus confirming the change in the profile of industrial growth over the year.

Recent Developments. The policy of opening the Brazilian market began in 1988 with the introduction of changes in the industrial policy then in force. In that same year, to complement a new industrial policy, reforms were introduced in the Brazilian tariff structure which were to remain in force until 01/JUL/88, with a view to reestablishing tariff policy as an instrument of industrial policy. As a consequence of these reforms, the average rate of Import Duty on the whole list of Brazil’s dutiable imports dropped from 51% on 30/JUN/88 to 41% as of 1/JUL/88, and the maximum tariff dropped from 105% to 85%. The importance of this new orientation for industrial policy notwithstanding, Brazilian imports remained at about the same level they had stood at prior to the reform, in view of the fact that, besides the rates of Import Duty remaining very high, there were also certain barriers to imports which had not yet been altered, owing to imbalances in the balance of payments. Starting in 1990, the Brazilian Government began to adopt policies for opening up the economy, resulting in the elimination of barriers to the importation of manufactured and semi-manufactured goods and subsequently in the implementation of further tariff reforms. On the 31st of January 1991, the Brazilian Government announced a new rate structure for Import Duties for the period between 1st January 1993 to 1st July 1993. As a consequence, the average Brazilian tariff dropped to 14.2% on 1st July 1991, while the highest tariff charged dropped to 40%. These rates remained in force until 31st December 1994.

The coming into force of the ‘MERCOSUR’ Common External Tariff - CET on 1st January 1995, led to a further reduction of the duties charged on imports, as compared to those practiced on 31st December 1994. The average tariff dropped to 13%, while the predominant tariff is currently 5%. Thus current rates of Import Duty range from 0% to 23%. This does not however apply to the goods listed as Brazilian Exceptions to the Common External Tariff. The Brazilian List of Exceptions to the Common External Tariff comprises 1.521 items of the ‘MERCOSUR’ Common Nomenclature - MCN, duties on which are scheduled to converge to the level agreed upon under the terms of the Common External Tariff by the year 2006. Of the items on the

Brazilian list of exceptions, 260 have levels of duty set at rates higher than the limits established under CET. Of these, duties on 217 items listed on the NCM, comprising various product categories, are above 23% or up to 35%. The remaining 43 items must pay rates of Import Duty in accordance with the following: a) 36%: 03 items from chapter 25 of NCM (stone) and 01 item on plaster from chapter 68; b) 38%: 01 item on plaster; c) 45%: 24 items from chapter 87 of

As a result of commitments assumed by Brazil within context of negotiations of the Group on Market Access of the Uruguay Round of GATT, the rates of import duty for industrialized products cannot exceed the level of 35% "ad valorem", as of 1st January 1999. Between 1st January 1995 and 1st January 1999 the base rates used in the negotiations (in force in 1986, when the Uruguay Round began) are to be gradually reduced, in equal installments, until a 35% ceiling has been reached. Thus, for a certain product on which the base rate was 105% (a passenger, automobile, for example), Brazil would be fully entitled to practice the following tariff rates, in compliance with the commitments assumed in the World Trade Organization - WTO: 1995, 91%; 1996, 77%; 1997, 63%; 1998, 49% and 1999, 35%. For products upon which the base rates used in the negotiations were below the 35% level and which were not on Brazil’s previous list of GATT tariff concessions, consolidation of a tariff of 35% (in accordance with the commitments assumed at the WTO) immediately went into effect, as of 1st January 1995. On the other hand, tariff levels below 35%, which were already part of Brazil’s previous list of tariff concessions under GATT, are to be preserved. With regard to agricultural products, the Agreement on Agriculture of the Uruguay Round of GATT determined the consolidation and reduction of all tariffs on agricultural goods during the period in which the results of the Round are being implemented. To this end, it was necessary to transform other non-tariff barriers to imports into tariff measures. For developing countries, the reductions should not be under 10% and of less than 24% on average, over ten years. The consolidated tariff ceiling for agricultural goods for Brazil was set at 55%.

The initiative of opening up Brazil’s domestic market to foreign trade aims to introduce greater efficiency into the Nation’s industrial sector, as a consequence of exposing various productive

segments of the local economy to foreign competition. The policy of opening up the market has been accompanied by various other measures, such as a temporary exemption from import duty on machines, spare parts and components, which are aimed at stimulating the modernization of Brazilian industry. In the context of the adoption of mechanisms aimed at inducing a progressive reduction and elimination of the various levels of tariff protection and eliminating instruments which curtail imports, at the same time, it became necessary to resort to GATT/WTO instruments to protect the domestic sector from unfair practices on the part of certain trade partners. Beginning in 1991, Brazil began to apply the GATT/WTO Anti-Dumping and Subsidies Code and Compensatory Measures, and since that time several Anti-Dumping and Anti-Subsidy Complaints have been brought against foreign products. In addition to the Brazilian Trade Law, the Government has also instituted standards which discipline administrative practices relating to the application of safeguards in Brazil, which were added with the aim of protecting two particularly vulnerable segments of Brazilian industry: textiles and toys.

Brazil’s trade balance in 1997 presented a deficit of US$ 8.372 million and this result (though greater than the US$5.554 million deficit reported in 1996) could be regarded as favorable in view of the previous prognosis of the market which had initially foreseen a deficit of US$ 12 billion or even of US$ 15 billion.

Over the year exports increased by 11% over their 1996 level and hit an all-time record of US$ 52.986 million, for the first time overtaking the US$ 50 billion-per-year mark, and representing a much greater increase than the 2.7% reported for 1996/95. The performance of Brazilian exports exceeded overall expectations for world trade in 1997. The increase in worldwide exports, by value, for 1996, according to the "Interim Assessment of the World Economic Outlook - December 1997", published by the IMF, was estimated at 3.2%, which stands in contrast to the 11% growth of Brazil’s overseas sales over the same period. Even taking into account the fact that the strength of the US dollar had a restraining effect of the rate of growth of world trade as measured in US$, Brazilian exports were extremely robust in terms of the quantities shipped: the quantum index, measured by the Fundação Centro de Estudos de Comércio Exterior (Centre for Foreign Trade Studies Foundation) - FUNCEX reported a 10.2% increase, by volume, over the previous year, thus surpassing IMF growth estimates for export volumes, both for industrialized economies (9.3%) and for developing economies (9.6%).

Exports to the European Union, after having dropped 0.6% in 1996, grew by 13.06% in 1997, reaching the value of US$ 14.513 million. These were led by exports to Holland and Germany which took US$ 3.998 million (an increase of 12.65% in relation to 1996) and US$ 2.608 million (+25.20%) respectively. The share of Brazilian exports going to the European Union rose from 26.8% to 27.4%. Exports to countries belonging to the Latin-American Integration Association - LAIA had increased from 2.36% in 1995 to 9.55% in 1996, and rose to a value of US$ 13.596 million in 1997 (a 24.41% increase in relation to the previous year), generating additional gains of US$ 2.668. Sales to ‘MERCOSUR’ were worth US$ 9.044 million (an increase of 23.81%) corresponding to a rise of US$ 1.739 million. Exports to countries grouped under "other LAIA countries" (Bolivia, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela), amounted to US$4.553 million, a substantial increase of 25.67%. As a group, the LAIA countries were the greatest buyers of Brazilian manufactured goods. In 1997, more than 90% of their purchases from Brazil were manufactured products,and the proportion of Brazilian exports directed towards these countries rose from 22.9% to 25.6%. There was a slight decline (1.07%) in Brazil’s exports to Asia which dropped (from US$ 7.814 million in 1996) to US$ 7.730 million. The proportion of Brazil’s exports bound for Asia decreased from 16.4% of Brazil’s total exports, to 14.6%. Also worth mentioning were the increases in sales to Eastern Europe and the Middle East. The 24.43% increase in exports to Eastern Europe is accounted for by a rise in purchases by Russia which has become one of the principal destination for Brazilian exports of raw and refined sugar, soluble coffee and cigarettes. The (45.93%) increase in sales to the United Arab Emirates and to Iran (33.15%) resulted in an 8.18% increase in exports to the Middle East.

In 1997, the 10 principal countries of destination for Brazilian exports were: the United States (17.51% of total exports), Argentina (12.77%), the Netherlands (7.55%), Japan (5.79%), Germany (4.92%), Italy (3.23%), Belgium-Luxembourg (2.80%), Paraguay (2.65%), United Kingdom (2.38%), and Chile (2.26%). The principal individual market for Brazilian exports remains the United States, sales to which amounted to US$9.276 million, in 1997. The most significant increases were in sales of coffee beans (US$ 423 million, a 77.62% increase); gold for non-monetary use (US$ 345 million, up 46.38%), and aircraft (US$ 307 million, up 49.83%). In 1997 the United States was the principal market for Brazilian sales of footwear (US$ 1.051 million), semi-manufactured iron and steel goods (US$ 449 million), piston engines (US$ 405 million), radio transmission and reception equipment (US$ 391 million), aircraft (US$ 307 million), pumps and compressors (US$ 270 million), wood pulp (US$ 244 million), leaf tobacco (US$ 228 million) and flat rolled steel (US$ 183 million). Sales to Argentina increased (30.89%) to US$ 6.767 million, with special emphasis on passenger automobile exports (which rose to US$ 671, an increase of 100.83%), auto parts (US$ 566 million, up 5.82%) and cargo vehicles (US$ 440 million, up 84.13%). In 1997, the Netherlands was the main destination for Brazilian sales of soya beans and meal, whereas Germany was the main destination for sales of coffee beans. Sales to Japan amounted to US$ 3.068 million (39.69% of total exports), a 1% increase in relation to 1996.

Brazil imported a record US$ 61.358 million worth of goods in 1997. The rate of increase of imports, though it remained positive, declined over the course of the year, in response to measures implemented by the Government during 1997 designed to provide greater regularity to the importation process, among them the disciplining of import financing, a review of the system for applying tariffs and, in the wake of the Asian crisis, the raising of the Common External Tariff - CET, by three percentage points.

The European Union is the economic block whose sales to Brazil increased most in 1997, accounting for US$2.241 million or 26.6% of Brazil’s total imports, which amounted to US$16.361 million. The main countries of origin among this block were Germany, Italy and France which, collectively, were the source of 16.7% of Brazil’s foreign purchases. The principal products imported from these countries were: capital goods, raw materials and intermediate products, especially those related to the automobile industry. LAIA was the second most significant source of imports accounting for US$ 13.430 million, due basically to the performance of ‘MERCOSUR’ which, for its part, accounted for 15.8% of Brazil’s foreign purchases. Among the countries of this common market, Argentina was the source of 84% of its sales to Brazil making it Brazil’s second most important source of imports (accounting for 13.4% of total imports). The main products imported from Argentina were: vehicles, auto-parts, oil and wheat. Imports from Asia amounted to US$ 9.192 million, with Japan being the principal source and accounting for 5.9% of total imports. Brazil’s imports from Asia were principally electronic appliances,communications equipment,integrated circuits, and lastly, vehicles and auto parts, imports of which increased 273% in 1997.

Imports of capital goods amounted to US$ 16.678 million, a 30.8% increase in relation to the same period in 1996, and accounted for the greatest increase in value (up US$ 3.925 million) in both relative and absolute terms. This result reflects the effects of renovation, modernization, and the stimulus provided by the privatization programme on Brazilian industry, which, in the last quarter of 1997, achieved a growth rate of roughly 16% in relation to the same period for 1996. Imports of raw materials and intermediate products amounted to US$ 27.603 million, a 12.4% increase in relation to the previous year. In this category the increase in value of chemical and pharmaceutical products, fertilizer and seeds is underscored. On the other hand, there was a

reduction in purchases of foods for transformation industries, especially wheat, imports of which dropped 36.4%. There was a 15% increase in imports of consumer goods, 61% of which was accounted for automobile imports alone. Imports of other durable and non-durable consumer goods increased (by 6.7% and 7.2% respectively) by less than the overall increase for imports as whole. Purchases of fuel and lubricants were 6.2% lower than in 1996, due both to lower average prices (which fell by 4.9%) and smaller volumes purchased (-7%) as a consequence of increased domestic production. Market projections indicate that the decline in oil prices is likely continue and it is expected that Brazil’s daily domestic oilproduction will increase by 14% in 1998, thus resulting in lower volumes of petroleum imports.(Footnote: sources:www.mre.gov.br and www.mercosur.org)

Latin America begun taking its first steps towards to regional integration with the treaty that created the Latin American Free Trade Association (ALALC), which was signed in 1960, providing the creation of a free trade zone, by periodical and selective negotiations between its member states. This choice-negotiation at the discretion of the member states rather than automatic reduction of import duties made the ALALC trade opening program develop reasonably well in its first years and in 1995 loose impetus and come to a big distance from its original objectives, especially in the seventies.

It was an unafraid reaction established in the year of 1980 from the Latin American Integration Association, to replace the utopian ‘ALALC’ used by other means to attempt a member state integration. In the place of that free trade zone created by ‘ALALC’, an economic preference zone was established creating conditions favorable to the growth of bilateral initiatives, as a prelude to the institution of plurilateral commercial relationships in Latin America. ‘ALADI’ before all made possible agreements and joint actions between countries in the region which until then had only limited previous ties. The desire of an establishment of a common market, however, at that time was still a far objective.

Under the ALADI system Brazil and Argentina had decided together to sign in 1986, 12 (twelve) commercial protocols. It was the very first concrete step towards to bring the two countries to a closer relationship that had officially been started in 1985 under the Declaration of Iguaçu. To ensure their former agreements, Brazil and Argentina signed in 1988 a Treaty for Integration, Cooperation and Development that set the stage for a common market between the two countries in the next ten years, with of course, the gradual elimination of all tariff barriers and harmonization of the macroeconomic policies of both nations. It was further established that this agreement would be open to all other Latin American countries to join. Afterwards, Paraguay and Uruguay decided to join by a new treaty which was signed by all four countries on march 26, 1991, in Asunción, Paraguay (2), providing the creation of a common market among the four member states which will be known as the Southern Common Market ‘MERCOSUR’. Recently the head government of Chile and Bolivia have decided to join ‘MERCOSUR’ as associated states through association agreements (in force from october 1st, 1996 and february 28th, 1997 respectively), that aims the gradual elimination of all tariff barriers. Specific talking about Chile’s association with ‘MERCOSUR’, together with the exploration of new investment prospects in Brazil - which in 1996 reached around US$ 1.3 billion - is the main feature in the bilateral relationship. Recent major developments have been the statement by President Frei, at the latest ‘MERCOSUR SUMMIT’, indicating chilean readiness to co-ordinate with the Customs Union in trade negotiations on the FTAA and on other common negotiating fronts, and the incorporation of Chile and Bolivia in the ‘MERCOSUR’ Policy Consultation Mechanism (Asunción, 23rd, July,1997). The bilateral exchange has shown an upward trend in recent years. Since 1984, data has shown favourable balances for Brazil, although with each year there has been a marked tendency towards a balance being achieved. In 1996, Brazil was Chile’s fourth largest trading partner, with 6.18% of the total of chilean overseas trade, after the United States (20.6%), Japan (10.6%) and Argentina (7.2%). This pattern has shown a degree of complementarity: Brazil’s main exports are transport equipment, steel and other metal products, plastics, paper and coffee; imports consist basically of copper and copper products, methanol, cellulose and newsprint, tomato juice and purees, bulk nitrate and silver, fresh fruit and wine. The only trouble to be solved with Chile’s entry into ‘MERCOSUR’ will be the offshore tariffs that the chilean government imposes at a flat of 11% in despite of other ‘MERCOSUR’ nations that have rates ranging from zero to 20%. It’s necessary not to forgive that this country has also entered into a bilateral trade arrangement with Argentina, however it has not yet been ratified by either country’s legislatures. Chile also has been talking to Venezuela, Colombia, and Ecuador - but no trade agreements have been forthcoming from those talks. It’s known that the Andean Community countries (Colombia, Ecuador, Peru and Venezuela) are negotiating a free trade and a complementary economic to do so through association agreements with ‘MERCOSUR’, without taking account of the scale of free trade with Mexico, until full participation in formation and conduction of a possible hemispheric common free market. Brazil’s relationship with Mexico has always developed in a climate of cordiality and co-operation in relation to the majority of the items on the regional and international agenda. Their recent economic relationship is a factor that constitutes an integrated partnership in its own right. Just to have a better understanding, in the year of 1995, the bilateral trade reached a level of US$1.308 billion, with brazilian exports of the order of US$496 million and imports of around US$812 million.

i)Free transit of production goods, services and factors between the member states with inter alia, the elimination of customs rights and lifting of nontariff restrictions on the transit of goods or any other measures with similar effects; iiFixing of a common external tariff (CET) and adopting of a common trade policy with regard to non member states or groups of states and the coordination of positions in regional and international commercial and economic meetings; iii)Coordination of macroeconomic and sectorial policies of member states relating to foreign trade, agriculture, industry, taxes, monetary system, exchange and capital, services, customs, transport and communications and any others they may agree on, in order to ensure free competition between member states; and the commitment by the member states to make to necessary adjustments to their laws in related areas to allow for the strengthening of the integration process; iv)The Asunción Treaty is based on the doctrine of the reciprocal rights and obligations of the member states. ‘MERCOSUR’ initially targeted free-trade zones, then customs unification and, finally, a common market, where in addition to customs unification the free movement of manpower and capital across the member nations international frontiers is possible, and depends on equal rights and duties being granted to all signatory countries. During the transition period, as a result of the chronological differences in actual implementation of trade liberalization by the member states, the rights and obligations of each party will initially be equivalent but not necessarily equal. In addition to the reciprocity doctrine, the Asunción Treaty also contains provisions regarding the most-favored nation concept, according to which the member nations undertake to automatically extend after actual formation of the common market to the other Treaty signatories any advantage, favour, entitlement, immunity or privilege granted to a product originating from or intended for countries that are not party to ALADI.

After several attempts at regional economic or trade blocs that never met the idealistic goals set by its members, and notwithstanding the many pessimistic voices at the time forseeing it would be an another frustrated endeavour, ‘MERCOSUR’ has made great progress since its inception. During the last seven years the project has been active, it has become one of the most important and successful aspects of the political economy of the member-countries. The reduction of import tariffs and the elimination of many nontariff barriers has resulted in very significant growth in trading among its members, which represented 312% for the period 1991/1996. Exports also changed destination to intrazonal trade compared with total trade increased from 9% to 23% in the same period. ‘MERCOSUR’ (3) is maturing faster in despite of diverge interpretations as there are many difficult aspects to be dealt with or harmonized from a macroeconomic viewpoint as from a sectorial one. Some sectors have not really started the integration process, such as the financial and services one, banks, insurance, health and so on. However, the results are extremely significant and have caught the attention of other countries and trading blocs. As said before, Chile and Bolivia has already joined in a partial manner, and The Andean Community (4) and The European Union (5) are following suit. Nowadays, the United States of America has shown special companionship interest with ‘MERCOSUR’ to move along in the formation of the Free Trade Area of the Americas (FTAA), allowing by this way an increasing business fluxus within the North, Central and South Americas. For that, however, it is urgent to unify all judicial rule in the field of regulatory legislation policies comprising export incentives, original production requisites, antidumping legislation, harmonization of macroeconomic policies and so on, in order to discourage unfair trade practises whilst the stream of trading increases.

i)Internal commercial policies; ii)External commercial policies (including customs regulations, export incentives, original production requisites, antidumping legislation, free trade zones); iii)Industrial and technological policies (including industrial promotion legislation, technological innovations, patents and trademarks, ecological protection);iv)Transport and communication policies; v)Agro-policies; vi)Labor and social policies; vii)Energetic policies; viii)Purchases from the State regime; ix) Taxation policies; xi)Fiscal policies; xii)Monetary and credit policies and Exchange policies.

NAFTA was built upon a 1989 trade agreement between the United States of America and Canada in order to eliminate or to reduce tariffs among the two countries, eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about fourteen years. In december, 1992, NAFTA was signed by the leaders of the three countries – Brian Mulroney of Canada, Carlos Salinas de Gortari of Mexico and George Bush of the United States. After a lengthy and exhausting debate, the legislatures in all three countries approved NAFTA in 1993. Especially in the United States, the debate over NAFTA divided members of both the Democratic and Republican parties and sparked a fierce opposition from environmental and labor groups. Many invoked the fear that jobs would be lost because the agreement would facilitate the movement of U.S. production plants to Mexico, where factories could take advantage of a cheaper labor and lax enforcement of environmental and workers’ rights laws. The Congress of the United States narrowly approved NAFTA in november 1993. At last, NAFTA became effective in Canada, Mexico and the United States on january 1, 1994. It’s known that NAFTA forms the world’s second largest free-trade zone, bringing together more than 365 million consumers in an open market. Chile already has a free-trade arrangement with Mexico, signed in 1991, which could serve as a chilean gateway to NAFTA. Restrictions has been removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investiment among the NAFTA member countries. Mandates for minimum wages, working conditions, and environmental protection were added later as a result of supplemental agreements signed in 1993.Also environmental groups were concerned that pollution and food safety controls would be more difficult to enforce. In response to these concerns, Canada, Mexico and the United States signed supplemental agreements in 1993 that addressed some of these issues.

The effort to unite the economies of the Western Hemisphere into a single free trade arrangement was initiated at the Summit of the Americas, which was held in december of 1994 in Miami and continued at the Second Summit of The Americas Santiago Declaration (6). The Heads of State of the 34 democracies in the region agreed to construct a ‘free trade area of the Americas" or FTAA and to complete negotiations for the agreement by 2005. The leaders also made a commitment to achieve substantial progress toward building the FTAA by 2000. Their decisions can be found in the Miami Summit’s Declaration of Principles (7) and Plan of Action (8). The effort to build the FTAA involves some key components: i)The Trade Ministers of the Western Hemisphere, who have developed the overall plan for the FTAA; ii)The 12 (twelve) FTAA working groups established by the Trade Ministers that are gathering and compiling very important information on the current status of trading relations in the Hemisphere. Since the Miami’s Summit, the Hemisphere’s Trade Ministers have met four times to formulate and execute a work plan for the FTAA. The first meeting was in june of 1995 in Denver, USA (9); the second one in march of 1996 in Cartagena (10), Colombia; the third one in May of 1997 in Belo Horizonte, Brazil and the fourth one in march of 1998 in San Jose, Costa Rica. The 12 (twelve) working groups (seven were established in Denver; four in Cartagena and one in Belo Horizonte) met on several occasions, at different locations throughout the Americas. In addition to gathering information, each WG was directed by the Trade Ministers in order to examine trade related measures in its respectives areas, and also do determine possible approaches to negotiations. The Trade Ministers also instructed their Vice Ministers to accept recommendations from the WG aiming to direct, evaluate and coordinate their work. Since the San Jose Ministerial, the 12 (twelve) original WG were transformed into 09 (nine) negotiation groups. The ambitious goal set by the leaders of the Western Hemisphere at the 1994 Summit of the Americas in Miami to create a free trade area has been given a significant push forward by the completion of the San Jose Declaration (11) on march 19th, 1998. This Declaration, agreed by the Trade Ministers of the 34 participating democracies in the free trade area of the Americas (FTAA) process, served as the basis for the launch of the Hemispheric trade negotiations by heads of state and government in Santiago, Chile on 18-19 april, 1998. It may be said that the San Jose Declaration can be compared to the 1986 Punta del Este Declaration which launched the Uruguay Round of multilateral trade negotiations. It represents a commitment by 34 countries to the most ambitious undertaking for trade liberalization since that time. It also represents the largest regional integration effort ever undertaken involving both developed and developing countries in a common objective to realize free trade and investment in goods and services, on a basis of strengthened trading rules and disciplines. The breadth of the negotiations which will be set in place by the San Jose Declaration is unprecedented even by the standards, as spoken before, of the Uruguay Round.These negotiations will encompass all of those areas previously negotiated and which fall within the World Trade Organization’s ambit, with the goal of going beyond previously agreed multilateral liberalization within the Hemisphere, wherever possible. Importantly, however, the FTAA negotiations will include areas not presently under the WTO such as a common investment regime, government procurement, and competition policy, which are not yet subject to commonly-agreed disciplines among a large number of trading nations. Equally, the FTAA negotiations will examine the interrelationship which exists between certain key negotiating areas, such as agriculture and market access; services and investment; competition policy and subsidies, antidumping and countervailing duties, among others, so as to ensure that the outcome of negotiations are as efficient and liberalizing as possible. The differences in level of development and size of participating economies will be taken account of in the negotiations in order to ensure that the smaller countries within the Hemisphere will be able to equally benefit from the ensuing trade liberalization. During the negotiations elements of civil society will have the possibility to make their views known on issues to be negotiated, as well as on the important relationship between trade and the environment and on labor issues as they may affect trade. A commitee of government representatives will provide the link between the input from interested sectors of society and the negotiators on these issues.

The FTAA negotiations will be carried forward under a structure agreed through the year 2004.The structure is both flexible and ensures wide geographical representation by the participating countries through a rotation of both the Chairmanship of the process, the site of the negotiations themselves, and the responsibility for the various negotiating groups. Negotiations were structured in the following manner: i)Chairmanship of the Negotiations: will rotate every 18 months, or at the conclusion of each Ministerial Meeting. Those countries which have been designated to exercise the function of Chair of the FTAA process for successive 18-month periods are: Canada; Argentina; Ecuador; and Brazil and the United States (jointly).ii)Trade Negotiations Committee (TNC): will be responsible for the oversight of the negotiations. This Committee will be composed of Vice-Ministers for Trade. The Committee will meet no less than every 18 months. The Chairmanship of the TNC will be held by the Chair of the FTAA process.iii)The Negotiating Groups established are: (1)market access (chaired by Colombia);(2)investment (Costa Rica);(3) services (Nicaragua); (4) government procurement (United States of America); (5)dispute settlement(Chile);(6)agriculture (Argentina); (7) intellectual property rights (Venezuela);(8)subsidies; antidumping and countervailing duties (Brazil); and (9) competition policy (Peru). iv)A Consultative Group on Smaller Economies was created, open to the participation of all the FTAA countries. This group, chaired by Jamaica, will report to the TNC and have a rotating chairmanship.v)Venue of the Negotiations: established on a rotating basis. Three countries will serve as hosts to the negotiations, namely: The United States (Miami) for three years; Panama (Panama City) for two years; and Mexico (Mexico City) for two and a half years, or until the conclusion of negotiations.vi) Administrative and Substantive Support: The negotiations will be supported administratively through the creation of an Administrative Secretariat, located in the same site as the meetings of the negotiating groups. The Secretariat will be funded by a combination of local resources and the Tripartite Committee institutions (Technical and analytical support for the negotiations will be provided by the three institutions of the Tripartite Committee, namely the OAS, the IDB, and ECLAC. These institutions will also provide technical assistance related to FTAA issues, particularly for the smaller economies of the Hemisphere).vii)Input by Civil Society into the Negotiations: Governments in the Western Hemisphere have committed to transparency in the negotiating process. For this purpose they have agreed to create a Committee on Civil Society, in order to facilitate the input of the business community, labor, environmental, and academic groups, who wish to present their views on the issues under negotiation and on trade matters in a constructive manner.Providing technical assistance to the process has been 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).

9)– A SHORT VIEW OF THE AREAS OF COMMONALITY AND REMAINING iSSUES IN THE BELO HORIZONTE DECLARATION

The specific proposals tabled by delegations and after comprehensive discussions, is a significant measure of convergence on key principles and issues: i)Consensus constitutes the fundamental principle of decision making in the FTAA process, which seeks to preserve and promote the essential interests of our 34 countries in a balanced and comprehensive manner; ii)The outcome of the negotiations of the Free Trade Area of the Americas will constitute a comprehensive single undertaking which embodies the rights and obligations mutually agreed upon. The FTAA can co-exist with bilateral and sub-regional agreements, to the extent that the rights and obligations under these agreements are not covered by or go beyond the rights and obligations of the FTAA; iii)The FTAA will be consistent with the WTO agreements; Countries may negotiate and joint the FTAA individually or as members of a sub-regional integration group negotiating as a unit; iv)Special attention should be given to the needs, economic conditions and opportunities of the smaller economies to ensure their full participation in the FTAA process; v)The need for establishing a temporary administrative Secretariat to support the negotiations; vi)The year 2005 as the date for concluding negotiations, at the latest;

9.1) – OTHER REPORTS AND CONTRIBUTIONS TO ECONOMIC INTEGRATION IN THE BELO HORIZONTE DECLARATION

It was decided to give technical and logistical support provided to the WG by the Tripartite Committee, as well as the contribution received from regional,sub-regional and multilateral organizations. The Tripartite Committee will continue to provide analytical support, technical assistance and related studies, as requested by the respective WG and it was also decided that the member institutions of the Tripartite Committee will provide assistance to individual member-countries, on request, in accordance with the procedures of the respective institutions. The Tripartite Committee will undertake a feasibility study on alternatives for establishing a temporary administrative secretariat to support the FTAA negotiations and to report their findings to Vice Ministers in time for them to issue recommendations. To receive with interest the contributions for the Third Business Forum of the Americas relating to the preparatory process for the FTAA negotiations, which consider may be relevant to future deliberations. Acknowledgement and appreciation of the importance of the private sector’s role and its participation in the FTAA process. It was reiterated the commitment to transparency in the FTAA process. In this sense, considering the inputs from stakeholders of civil societies to be important to our deliberations, including those from the labor sectors, and encouragement to all countries to take them into account through mechanisms of dialogue and consultation. The issue of the environment and its relation to trade has been considered by the Vice Ministers since the Cartagena meeting and is the subject of ongoing discussions within the WTO and within the FTAA process.

9.2) – OFFICIAL FTAA DOCUMENTS APPROVED FOR PUBLICATION IN THE BELO HORIZONTE SUMMIT

i)"Investment Agreements in the Western Hemisphere: a Compendium" and "Inventory on Investment Agreements in the Americas," drawn up by the Working Group on Investments (WG-3); ii) "National Practices on Standards, Technical Regulations and Conformity Assessment in the Western Hemisphere", drawn up by the Working Group on Standards and Technical Barriers to Trade (WG-4); iii) "Compendium of Antidumping and Countervailing Duty Laws in the Western Hemisphere", drawn up by the Working Group on Subsidies, Antidumping and Countervailing Duties (WG-6); iv) "Government Procurement Rules in Integration Arrangements in the Americas", drawn up by the Working Group on Government Procurement (WG-8); v) "Provisions on Trade in Services in Trade and Integration Agreements in the Western Hemisphere" (Spanish version), drawn up by the Working Group on Services (WG-10).

9.3) – TERMS OF REFERENCE FOR THE WORKING GROUP ON DISPUTE SETTLEMENT ESTABLISHED IN THE BELO HORIZONTE DECLARATION

a) Compile an inventory of dispute settlement procedures and mechanisms included in agreements, treaties and arrangements of integration existing in the hemisphere and those of the WTO, appending the legal texts. b) On the basis of this inventory, identify areas of commonality and divergence among dispute settlement systems in the hemisphere, including with respect to the

extent to which these systems have been employed; c) Exchange views, following internal consultations with the private sector, regarding mechanisms to encourage and facilitate the use of arbitration and other means of alternative dispute resolution for the settlement of international commercial disputes; d) Recommend methods to promote understanding of the procedures under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes; e) In the light of the various subjects to be covered by the FTAA agreement and other relevant factors, exchange views on possible approaches to dispute settlement under the FTAA agreement, in line with the World Trade Organization understanding on Rules and Procedures Governing the Settlement of Disputes. f) Make specific recommendations on how to proceed in the construction of the FTAA in this area.

In 1991, in the year the Treaty of Asunción was signed, intra-mercosur trade reached US$ 5.3 billion. In the trade area, the success of the bloc could be confirmed by the increase of this trading exchange to around US$ 16 billion in 1996, with a trend for even higher growth in years to come. Within those global figures, trade with Argentina increased from US$ 3 billion, in 1991, to almost US$ 12 billion, in 1996, making Argentina the second largest individual market for Brazilian exports (US$ 5.2 billion in 1996, or around 11% of total Brazilian exports), losing only to the United States. For José Augusto GUILHON ALBUQUERQUE (12), ‘MERCOSUR’ unites 76.4% of South American GNP, the amplified (expanded) ‘MERCOSUR’ 82.1% and ‘MERCOSUR’ 98.4%. As total exports of the countries comprising each group, ‘MERCOSUR’ represents 59.7% of the exports of South American countries, the amplified – that is including Chile and Bolivia - ‘MERCOSUR’ 74.2% and including all of the South American countries which have already proposed inclusion in ‘MERCOSUR’, which excludes only Ecuator and the Guyanas - ‘MERCOSUR’ 92.1%. But GNP is a static indicator and the commercial flux of each sub region does not distinguish between interregional trade and trade of the region in general. That is to say, without an interregional measure of trade it is not possible to evaluate to which point integration has advanced in regards to the formation of a South American market. The largest regional market, Brazil, is a good reference from which to measure regional flux, before integration. Taking Brazil as a reference, we can see how imports and exports behave in each sub region ‘MERCOSUR’ imported, in 1992, US$ 4.12 billion from Brazil, the Andean Group another US$ 1.45 billion, Chile US$ 0.93 billion, the countries of the Amazon region, US$ 1.46 billion, the extent to which Guyana and Suriname grew only US$ 13.3 million in relation to the Andean group, US$ 2.13 billion for the Amazon region (adding US$ 27.6 million for Guyana and Suriname) and US$ 1.21 billion for Chile (13). ‘MERCOSUR’ represented, therefore, 64.0% of exports in the principal South American market. The Andean countries represent another 21.8% and Chile, 14.0%. In 1995, the most recent data available, these values represented 65.2% for ‘MERCOSUR’, 22.1% for the Andean Group, and 12.6% for Chile. These differences would have little significance if not for the fact of the growth of ‘MERCOSUR’ in terms of volume and importance. From the point of view of Brazilian imports, ‘MERCOSUR’ was conduit to exports in the order of US$2.21 billion in 1992, passing to US$6.87 billion in 1995. The Andean Pact grew from US$ 0.62 billion to US$ 1.22 billion during the same period, and Chile from US$.48 billion to US$ 1.09 billion. Suriname and Guyana reduced exports to Brazil from around 37 million to 28 million dollars. Thus, in 1995 ‘MERCOSUR’ represented 74.8% of South American exports to Brazil while the Andean countries represented 13.3% and Chile 11.9%. The obvious conclusion is that ‘MERCOSUR’, to the extent that it includes two sub regions of great geographic, economic and political interest on the sub continent - the Brazilian Plains and the Silver (Prata) Basin - which practically speaking, encompasses the primary South American commercial flux, attracting, momentously, not only the Mediterranean (midland) countries, but also the most important economies in the rest of sub regions, be they the Andean or of the Amazon. In fact, greater ‘MERCOSUR’, that is, counting on the participation of Chile and Bolivia, represented, in 1995, 83.2% of Brazilian exports to South America, the equivalent in commercial paper to the United States in relation to the rest of the Americas. ‘MERCOSUR’ as it actually operates, plus associates and countries initiating conversations for future association including Venezuela, Peru, and Colombia, Brazilian exports represent 97.9% of its exports to South America, and 99% of its imports to the South American sub continent. Commercial flux in Brazil is a good indicator of the degree of integration and economic interdependence of the sub continent because it offers a dynamic indicator as to the degree of attraction that the various regions sustain in relation to one of the centers of gravity of the Continent, the other being, obviously, the United States of North America. Another measure is that of trade in different sub regions of Brazil, in proportion to Brazilian trade in the entire American continent. In the case of exports, ‘MERCOSUR’ represents 31.2% of the total exports by Brazil to the Americas, and greater ‘MERCOSUR’ 40%. Together with ‘MERCOSUR’ it constitutes 48.5% of Brazilian exports to the Americas. With relation to imports, Brazil buys from ‘MERCOSUR’ 31.6% of its imports on the Continent, 36.7% from greater ‘MERCOSUR’, and 42.0% from ‘MERCOSUR’. In practice, what ‘MERCOSUR’ euphemistically calls agreements aimed at adjustment of the historic patrimony of the ALADI countries has already resulted in total political association and advanced commercial association with Chile and Bolivia, constituting a sub-continental expansion of ‘MERCOSUR’ towards a species of South American economic integration.ALCSA, which constitutes the idea of a network of commercial agreements linking Brazil with the rest of the sub-continent (with Brazil clearly looking during that time to secure an alternative to ‘MERCOSUR’ while augmenting its maneuverability in slowing down the rhythm of negotiations with the ‘MERCOSUR’ partners), has already rendered 90% to 99%, if confronted from the point of view of exports and imports by Brazil in the region. On the whole, for Brazil, ‘MERCOSUR’ trading results were especially positive, since the country’s exports to Argentina, Paraguay and Uruguay went up from US$ 1.3 billion in 1990, to US$ 7.3 billion in 1996.

Talks began in late 1994 to expand NAFTA to include all Latin American nations—with the exception of Cuba, the only country in the region with a Communist government. These talks include plans to create a free-trade zone throughout the Americas in the 21st century, but including more countries in NAFTA is expected to be difficult and it is also interesting to call attention to three obstacles to integration of the Americas on the pattern of NAFTA, as pointed out by Professor José Augusto GUILHON DE ALBUQUERQUE(14): In the first place, NAFTA involves, through the so-called ‘side agreements’, the co-ordination of domestic socio-economic policies that can only be justified in extremely marked situations of interdependence between countries. An example of a ‘side agreement’ that would be difficult for the great majority of American countries to accept, are the agreements on labour regulations which could result in the creation of new trade barriers, like the famous ‘social dumping’ clause. Besides, the difficulties encountered by the United States and Chile with regard to including the ‘side agreements’ in discussions on access to NAFTA are a good indicator of this limitation. If Chile, a model of economic homework in the eyes of the United States, cannot accept the link between trade and labour practices, how can the other countries manage it? In second place, NAFTA involves extremely complicated institutional arrangements as is the case of working parties to resolve disputes, which force the 34 countries on the continent to sit down at a table to consider each complaint from companies or individuals from any one of them. It is hardly possible that the USA would participate in a working party with all the other countries on the Continent to review its own domestic legislation, or that the North American Congress would accept the interruption of the process of legislation just to satisfy this requirement. In third place, NAFTA involves a series of agreements outside the WTO (World Trade Organisation) which, in some areas, might be brought about, but would encounter great difficulties in relation to financial services or government purchases, to give two examples. In fact, for the other countries on the Continent, including Brazil, it would be better to discuss the eventual increase of liberalisation within the realm of the WTO, in which the weight of a super-power like the USA meets some counter-weight in other partners of the size of the European Union and Japan. The other obstacle is of an institutional nature. Institutions are understood as supranational organisms and, in this case, not ‘MERCOSUR’, nor ‘NAFTA’, nor a future Area of Free Trade are institutions. But if we take into consideration other aspects of institutionalization in international relations, there exists an obstacle between, for example, ‘NAFTA’ and ‘MERCOSUR’. While the first has many permanent rules and no political body, ‘MERCOSUR’ consists of various permanent political bodies and few rules. ‘MERCOSUR’ is characterized as a permanent forum of negotiation, more than a supranational or intergovernmental structure. When heads of state and of government meet regularly they need to make decisions and it’s not seen all of the presidents and their economic and commerce ministers in the Americas meeting semi-annually to make new decisions. This mechanism, extremely efficient in the case of ‘MERCOSUR’, substituting for the rigidity and extended rules of ‘NAFTA’, might be dysfunctional in the case of ‘FTAA’. In addition to this, the rule of consensus, which has been the only viable one in the case of ‘MERCOSUR’, probably would become a recipe for immobility. One little considered aspect of ‘MERCOSUR’ is in its flexibility. ‘MERCOSUR’ is an open model. Whether by the path of least resistance or not, the truth is that the fact does not correspond to a rigid pre-defined model permitting ‘MERCOSUR’ to augment or diminish its rhythm and correct the course of integration with these comings and goings appearing as fragility or shortcoming to the Northerners. ‘MERCOSUR’ can relax or heat up the Common External Tariff. It can extinguish or augment special regimens and their exceptions. It can deepen the themes of integration, politicize or bureaucratize its instances of negotiation and decision. None of this is a given today, nor, in the event that it does takes place, will be entirely surprising nor deceptive. In addition to the nucleus of member states, ‘MERCOSUR’ is being extended under the form of tailor-made associates. Negotiated separately, each accord, though obedient to a naturally common structure, is unique. This might afford an expansion which, to the contrary of what might be expected in the United Kingdom, does not prejudice nor is prejudiced by a deepening of inter-MERCOSUR integration. For all of these reasons, ‘MERCOSUR’ is today the principal instrument of economic integration and political solidarity in South America. Given the complexity and the increasingly sensitive character which today mark the FTAA conversations, ‘MERCOSUR’ might, exercise a constructive leadership in the sub continent and in all of Latin America in order to successfully meet all these potential opportunities and challenges consolidating its own position by strengthening its weak spots and becoming a real integrated common market in all its sense towards to FTAA.

(*) In gratitude for, I offer this article to Mr. RYAN, Mike Joseph, an australian-brazilian english teacher, who encouraged me to begin writting in the english language.

(1) Text extracted from "Brasil: Conjuntura Econômica" – edition 1998 – is published once a year by Office of the Under-Secretary General for Integration, Economic Affairs and Foreign Trade – SGIE, under the executive coordination of the Technical Studies Group – GETEC.

(2) The Treaty of Asunción, signed by Brazil, Argentina, Paraguay and Uruguay on March 26th, 1991 is the legal document that forms the basis of MERCOSUR. It is a framework agreement that does not create a common market but defines the objectives of the integration process and the mechanisms required to achieve them. The Treaty records the decision of the four countries to extend the bounds of their own national markets as a way of achieving better penetration within the international economic order, increasingly coloured by globalization and regionalization. Its main objective is the structuring of a large economically integrated area, of which the first stage is the formation of a customs union, to be progressively consolidated until reaching more advanced stages of economic integration. For the constitution of Mercosul, the Treaty of Assunción envisaged the following steps: a) the carrying out of a trade liberalization programme, with progressive tariff reductions, both linear and automatic, together with the removal of non-tariff restrictions or measures of a similar effect; b) the establishing of a Common Foreign Tariff,capable of promoting foreign competition from the State partners; c) the harmonization of macro-economic and sectoral policies, wherever appropriate.

(3) In order to administer the customs union, MERCOSUR adopted an organizational structure of an inter-governmental kind, sufficiently broad-based to permit forums of negotiation for the most diverse subject ranges and sufficiently flexible to adapt to the dynamics of the integration process as it developed. That structure was agreed upon in the Ouro Preto Protocol in December 1994, that created MERCOSUR in its present form and defined the basic organizational features of the bloc: a) decision-making bodies of an inter-governmental nature; b) a consensual system of decision-making; c) an arbitration system for disputes. The acknowledgement, in the Ouro Preto Protocol, of the international juridical personality of MERCOSUR, endowed the economic bloc with the economic responsibility to negotiate, on its own behalf, agreements with third party countries, groups of countries and international organizations.

(4) Montevideo, September 11, 1998.- The Representatives of the MERCOSUR and of the Andean Community met in Montevideo at the Headquarters of the Administrative Secretariat of the MERCOSUR, on September 9, 10, and 11, of 1998, for the purpose of moving ahead with the negotiation of the Tariff Preferences Agreement, as the first stage toward the celebration of a Free Trade Agreement between the two trade blocs.The Andean Community and the MERCOSUR submitted the lists of priority products of both parties to an intense scrutiny in order to move closer together in their positions and to make headway toward the proposed objective.The lists of the other products of interest, which are a part of the universe of lists exchanged by the two groups, will be analyzed at the next meeting. Both delegations reiterated their commitment to conclude the negotiations for a Preferential Trade Agreement in time for it to enter in force on October 1, 1998, in accordance with the deadline established under the Framework Agreement for a Free Trade Area signed on April 16, 1998. The Andean Community and Mercosur evaluated various methodologies for the negotiation of preferential tariff margins, and exchanged lists of products for which they requested priority reconsideration, without prejudice to the importance of the other products of interest that make up the complete lists exchanged between the Andean Community and MERCOSUR.

(5) Joint Declaration on Political Dialogue between the European Union and MERCOSUR. Preamble. The European Union and the Mercosur Party States, conscious of their historical, political and economic ties, their common cultural heritage and the bonds of friendship between their peoples, mindful that political and economic freedoms are fundamental to society in the European Union and the Mercosur countries, reaffirming human dignity and the promotion of human rights as cornerstones of a democratic society, in accordance with the United Nations Charter, reaffirming the essential role of the principles and democratic institutions based on the rule of law, respect for which governs the internal and external policies of the parties, desiring to strengthen international peace and security in accordance with the principles of the United Nations Charter, sharing an interest in regional integration as a means of enabling their citizens to achieve sustainable and harmonious development predicated upon social progress and solidarity between their members, building upon the preferential relations formalized by the Framework Cooperation Agreements which the European Community has signed with each of the Mercosur Party States, recalling the principles set out in the Solemn Joint Declaration signed by the parties on 22 December 1994, have decided to develop relations on a long-term basis. Objectives: Mercosur and the European Union solemnly reaffirm their commitment to progressing towards the establishment of an interregional association and to establishing greater political dialogue for that purpose. Regional integration is one means of achieving sustainable and socially harmonious development, and a tool for ensuring competitiveness in the world economy.

(6) SECOND SUMMIT OF THE AMERICAS SANTIAGO DECLARATION. THE FOLLOWING DOCUMENT IS THE COMPLETE TEXT OF THE DECLARATION OF SANTIAGO SIGNED BY THE HEADS OF STATE AND GOVERNMENT PARTICIPATING IN THE SECOND SUMMIT OF THE AMERICAS. We, the democratically-elected Heads of State and Government of the countries of the Americas, have met in Santiago, Chile, in order to continue the dialogue and strengthen the cooperation we began in Miami in December 1994. Since that time, significant progress has been made in the formulation and execution of joint plans and programs in order to take advantage of the great opportunities before us. We reaffirm our will to continue this most important undertaking, which requires sustained national efforts and dynamic international cooperation. The strengthening of democracy, political dialogue, economic stability, progress towards social justice, the extent to which our trade liberalization policies coincide, and the will to expedite a process of ongoing Hemispheric integration have made our relations more mature. We will redouble our efforts to continue reforms designed to improve the living conditions of the peoples of the Americas and to achieve a mutually supportive community. For this reason, we have decided that education is a key theme and is of particular importance in our deliberations. We approve the attached Plan of Action and undertake to carry out its initiatives. Since our meeting in Miami, we have seen real economic benefits in the Americas resulting from more open trade, transparency in economic regulations, sound, market-based economic policies, as well as efforts by the private sector to increase its competitiveness. Even as countries in our region have been tested by financial and other economic pressures, and as countries in other regions have experienced serious economic setbacks, the overall course in the Americas has been one of faster economic growth, lower inflation, expanded opportunities, and confidence in facing the global marketplace. A major reason for this positive record has been our countries´ steadfast and cooperative efforts to promote prosperity through increased economic integration and more open economies. New partnerships have been formed and existing ones strengthened and expanded. A positive role is being played by sub-regional and bilateral integration and free trade agreements. We are confident that the Free Trade Area of the Americas (FTAA) will improve the well-being of all our people, including economically disadvantaged populations within our respective countries. Hemispheric integration is a necessary complement to national policies aimed at overcoming lingering problems and obtaining a higher level of development. In its broadest sense, a process of integration based on respect for cultural identities will make it possible to shape a common, interwoven set of values and interests that helps us in these objectives. Globalization offers great opportunities for progress to our countries and opens up new areas of cooperation for the hemispheric community. However, it can also heighten the differences among countries and within our societies. With steadfast determination to reap its benefits and to face its challenges, we will give special attention to the most vulnerable countries and social groups in the Hemisphere. Education is the determining factor for the political, social, cultural, and economic development of our peoples. We undertake to facilitate access of all inhabitants of the Americas to preschool, primary, secondary, and higher education, and we will make learning a lifelong process.We will put science and technology at the service of education to assure growing levels of knowledge and so that educators may develop their skills to the highest level. The Plan of Action that accompanies this Declaration defines the objectives and goals we intend to achieve and the actions that will make them a reality. In order to meet our goals within the agreed timeframes, we reaffirm our commitment to invest greater resources in this important area, and to encourage civil society to participate in developing education. The decisions adopted by our Ministers of Education at the Conference held in Mérida, Mexico, last February, reflect our desire to promote specific joint initiatives designed to improve access to education, with fairness, quality, relevancy, and effectiveness. In order to consolidate and lend continuity to our decisions, we have instructed that another Conference be held in Brasilia, Brazil, in July of this year. Today, we direct our Ministers Responsible for Trade to begin negotiations for the FTAA, in accordance with the March 1998 Ministerial Declaration of San José. We reaffirm our determination to conclude the negotiation of the FTAA no later than 2005, and to make concrete progress by the end of the century. The FTAA agreement will be balanced, comprehensive, WTO-consistent and constitute a single undertaking. We note with satisfaction the preparatory work by the Ministers Responsible for Trade over the past three years which has strengthened our trade policies, fostered understanding of our economic objectives and facilitated dialogue among all participating countries. We appreciate the significant contribution 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), acting as the Tripartite Committee. The FTAA 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 create the opportunities for the full participation by all countries. We encourage all segments of civil society to participate in and contribute to the process in a constructive manner, through our respective mechanisms of dialogue and consultation and by presenting their views through the mechanism created in the FTAA negotiating process. We believe that economic integration, investment, and free trade are key factors for raising

standards of living, improving the working conditions of the people of the Americas and better protecting the environment. These issues will be taken into account as we proceed with the economic integration process in the Americas. The region has made significant advances in both monetary and fiscal policy as well as in price stability and liberalizing our economies. The volatility of capital markets vindicates our decision to strengthen banking supervision in the Hemisphere and to establish regulations relating to disclosure and reporting of banking information. The strength and meaning of representative democracy lie in the active participation of individuals at all levels of civic life. The democratic culture must encompass our entire population. We will strengthen education for democracy and promote the necessary actions for government institutions to become more participatory structures. We undertake to strengthen the capabilities of regional and local governments, when appropriate, and to foster more active participation in civil society.Respect for and promotion of human rights and the fundamental freedoms of all individuals is a primary concern of our governments. In commemorating the fiftieth anniversary of the American Declaration of the Rights and Duties of Man and the Universal Declaration of Human Rights, we agree on the need to promote the ratification and implementation of the international agreements aimed at preserving them and to continue strengthening the pertinent national and international institutions. We agree that a free press plays a fundamental role in this area and we reaffirm the importance of guaranteeing freedom of expression, information, and opinion. We commend the recent appointment of a Special Rapporteur for Freedom of Expression, within the framework of the Organization of American States. Confident that an independent, efficient, and effective administration of justice plays an essential role in the process of consolidating democracy, strengthens its institutions, guarantees the equality of all its citizens, and contributes to economic development, we will enhance our policies relating to justice and encourage the reforms necessary to promote legal and judicial cooperation. To that end, we will strengthen national entities involved in the study of the administration of justice and expedite the establishment of a hemispheric center for studies on this subject. We will combat all forms of discrimination in the Hemisphere. Equal rights and opportunities between men and women and the objective of ensuring active participation of women in all areas of national endeavor are priority tasks. We will continue to promote the full integration of indigenous populations and other vulnerable groups into political and economic life, with due respect for the characteristics and expressions that affirm their cultural identity. We will make a special effort to guarantee the human rights of all migrants, including migrant workers and their families. Overcoming poverty continues to be the greatest challenge

confronted by our Hemisphere. We are conscious that the positive growth shown in the Americas in past years has yet to resolve the problems of inequity and social exclusion. We are determined to remove the barriers that deny the poor access to proper nutrition, social services, a healthy environment, credit, and legal title to their property. We will provide greater support to micro and small enterprises, promote core labor standards recognized by the International Labor Organization (ILO), and use new technologies to improve the health conditions of every family in the Americas, with the technical support of the Pan-American Health Organization (PAHO), achieving greater levels of equity and sustainable development. With deep satisfaction, we note that peace, an essential value for human coexistence, is a reality in the Hemisphere. We underscore that Central America has become a zone of peace, democracy, and development and we recognize efforts to eliminate antipersonnel mines and to rehabilitate their victims. We will continue to foster confidence and security among our countries through such measures as those mentioned in the Santiago and San Salvador Declarations on Confidence- and Security-Building Measures. We encourage the pacific settlement of disputes. We will lend new impetus to the struggle against corruption, money laundering, terrorism, weapons trafficking, and the drug problem, including illicit use, and work together to ensure that criminals do not find safe haven anywhere in the Hemisphere. We are determined to persevere in this direction. In forging an alliance against drugs and applying the Hemispheric Anti-Drug Strategy, we welcome the start of formal negotiations at the May 4 meeting of Inter-American Drug Abuse Control Commission (CICAD) to be held in Washington within the framework of the Organization of American States (OAS), to establish an objective procedure for the multilateral evaluation of actions and cooperation to prevent and combat all aspects of the drug problem and related crimes, based on

the principles of sovereignty, territorial integrity of States, shared responsibility, and with a comprehensive and balanced approach. We will strengthen national, hemispheric, and international efforts aimed at environmental protection as a basis for sustainable development that provides human beings a healthy and productive life in harmony with nature. The commitments undertaken at the Miami Summit and the Summit on Sustainable Development held in Santa Cruz de la Sierra, Bolivia, provide a solid basis for strengthening our actions. As parties to the United

Nations Framework Convention on Climate Change, we underscore the importance of working together to further fulfillment of the agreement reached at the Conference in Kyoto, Japan, and to promote its ratification in our countries. Moreover, we will work closely to make preparations for a Conference of the Parties to be held in November of this year in Buenos Aires, Argentina. We acknowledge that the development of energy links between our countries and the intensification of trade in the energy sector strengthen and foster the integration of the Americas. Energy integration, based on competitive and transparent activities, and in compliance with national conditions and objectives, contributes to the sustainable development of our nations and to the improvement of the quality of life of our people with minimum impact on the environment. Recognizing the importance of, and positive role played by hemispheric institutions, particularly the Organization of American States(OAS), we instruct our Ministers to examine the strengthening and modernizing of these institutions. We reaffirm our will to continue strengthening intra-hemispheric dialogue and cooperation within the framework of friendship and solidarity that inspires our nations. Done in Santiago, Chile, on this the 19th day of April, 1998, in the Spanish, French, English and Portuguese languages.

(7) SUMMIT OF THE AMERICAS DECLARATION OF PRINCIPLES.Partnership for Development and Prosperity: Democracy, Free Trade and Sustainable Development in the Americas. The elected Heads of State and Government of the Americas are committed to advance the prosperity, democratic values and institutions, and security of our Hemisphere. For the first time in history, the Americas are a community of democratic societies. Although faced with differing development challenges, the Americas are united in pursuing prosperity through open markets, hemispheric integration, and sustainable development. We are determined to consolidate and advance closer bonds of cooperation and to transform our aspirations into concrete realities. We reiterate our firm adherence to the principles of international law and the purposes and principles enshrined in the United Nations Charter and in the Charter of the Organization of American States (OAS), including the principles of the sovereign equality of states, non-intervention, self-determination, and the peaceful resolution of disputes. We recognize the heterogeneity and diversity of our resources and cultures, just as we are convinced that we can advance our shared interests and values by building strong partnerships. To Preserve and Strengthen the Community of Democracies of the Americas.The Charter of the OAS establishes that representative democracy is indispensable for the stability, peace and development of the region. It is the sole political system which guarantees respect for human rights and the rule of law; it safeguards cultural diversity, pluralism, respect for the rights of minorities, and peace within and among nations. Democracy is based, among other fundamentals, on free and transparent elections and includes the right of all citizens to participate in government. Democracy and development reinforce one another. We reaffirm our commitment to preserve and strengthen our democratic systems for the benefit of all people of the Hemisphere. We will work through the appropriate bodies of the OAS to strengthen democratic institutions and promote and defend constitutional democratic rule, in accordance with the OAS Charter. We endorse OAS efforts to enhance peace and the democratic, social, and economic stability of the region. We recognize that our people earnestly seek greater responsiveness and efficiency from our respective governments. Democracy is strengthened by the modernization of the state, including reforms that streamline operations, reduce and simplify government rules and procedures, and make democratic institutions more transparent and accountable. Deeming it essential that justice should be accessible in an efficient and expeditious way to all sectors of society, we affirm that an independent judiciary is a critical element of an effective legal system and lasting democracy. Our ultimate goal is to better meet the needs of the population, especially the needs of women and the most vulnerable groups, including indigenous people, the disabled, children, the aged, and minorities. Effective democracy requires a comprehensive attack on corruption as a factor of social disintegration and distortion of the economic system that undermines the legitimacy of political institutions. Recognizing the pernicious effects of organized crime and illegal narcotics on our economies, ethical values, public health, and the social fabric, we will join the battle against the consumption, production, trafficking and distribution of illegal drugs, as well as against money laundering and the illicit trafficking in arms and chemical precursors. We will also cooperate to create viable alternative development strategies in those countries in which illicit crops are grown. Cooperation should be extended to international and national programs aimed at curbing the production, use and trafficking of illicit drugs and the rehabilitation of addicts. We condemn terrorism in all its forms, and we will, using all legal means, combat terrorist acts anywhere in the Americas with unity and vigor. Recognizing the important contribution of individuals and associations in effective democratic government and in the enhancement of cooperation among the people of the Hemisphere, we will facilitate fuller participation of our people in political, economic and social activity, in accordance with national legislation. To Promote Prosperity Through Economic Integration and Free Trade. Our continued economic progress depends on sound economic policies, sustainable development, and dynamic private sectors. A key to prosperity is trade without barriers, without subsidies, without unfair practices, and with an increasing stream of productive investments. Eliminating impediments to market access for goods and services among our countries will foster our economic growth. A growing world economy will also enhance our domestic prosperity. Free trade and increased economic integration are key factors for raising standards of living, improving the working conditions of people in the Americas and better protecting the environment. We, therefore, resolve to begin immediately to construct the "Free Trade Area of the Americas" (FTAA), in which barriers to trade and investment will be progressively eliminated. We further resolve to conclude the negotiation of the "Free Trade Area of the Americas" no later than 2005, and agree that concrete progress toward the attainment of this objective will be made by the end of this century. We recognize the progress that already has been realized through the unilateral undertakings of each of our nations and the subregional trade arrangements in our Hemisphere. We will build on existing subregional and bilateral arrangements in order to broaden and deepen hemispheric economic integration and to bring the agreements together. Aware that investment is the main engine for growth in the Hemisphere, we will encourage such investment by cooperating to build more open, transparent and integrated markets. In this regard, we are committed to create strengthened mechanisms that promote and protect the flow of productive investment in the Hemisphere, and to promote the development and progressive integration of capital markets. To advance economic integration and free trade, we will work, with cooperation and financing from the private sector and international financial institutions, to create a hemispheric infrastructure. This process requires a cooperative effort in fields such as telecommunications, energy and transportation, which will permit the efficient movement of the goods, services, capital, information and technology that are the foundations of prosperity. We recognize that despite the substantial progress in dealing with debt problems in the Hemisphere, high foreign debt burdens still hinder the development of some of our countries. We recognize that economic integration and the creation of a free trade area will be complex endeavors, particularly in view of the wide differences in the levels of development and size of economies existing in our Hemisphere. We will remain cognizant of these differences as we work toward economic integration in the Hemisphere. We look to our own resources, ingenuity, and individual capacities as well as to the international community to help us achieve our goals.To Eradicate Poverty And Discrimination In Our Hemisphere. It is politically intolerable and morally unacceptable that some segments of our populations are marginalized and do not share fully in the benefits of growth. With an aim of attaining greater social justice for all our people, we pledge to work individually and collectively to improve access to quality education and primary health care and to eradicate extreme poverty and illiteracy. The fruits of democratic stability and economic growth must be accessible to all, without discrimination by race, gender, national origin or religious affiliation. In observance of the International Decade of the World’s Indigenous People, we will focus our energies on improving the exercise of democratic rights and the access to social services by indigenous people and their communities. Aware that widely shared prosperity contributes to hemispheric stability, lasting peace and democracy, we acknowledge our common interest in creating employment opportunities that improve the incomes, wages and working conditions of all our people. We will invest in people so that individuals throughout the Hemisphere have the opportunity to realize their full potential. Strengthening the role of women in all aspects of political, social and economic life in our countries is essential to reduce poverty and social inequalities and to enhance democracy and sustainable development. To Guarantee Sustainable Development and Conserve Our Natural Environment for Future Generations. Social progress and economic prosperity can be sustained only if our people live in a healthy environment and our ecosystems and natural resources are managed carefully and responsibly. To advance and implement the commitments made at the 1992 United Nations Conference on Environment and Development, held in Rio de Janeiro, and the 1994 Global Conference on the Sustainable Development of Small Island Developing States, held in Barbados, we will create cooperative partnerships to strengthen our capacity to prevent and control pollution, to protect ecosystems and use our biological resources on a sustainable basis, and to encourage clean, efficient and sustainable energy production and use. To benefit future generations through environmental conservation, including the rational use of our ecosystems, natural resources and biological heritage, we will continue to pursue technological, financial and other forms of cooperation. We will advance our social well-being and economic prosperity in ways that are fully cognizant of our impact on the environment. We agree to support the Central American Alliance for Sustainable Development, which seeks to strengthen those democracies by promoting regional economic and social prosperity and sound environmental management. In this context, we support the convening of other regional meetings on sustainable development. Our Declaration constitutes a comprehensive and mutually reinforcing set of commitments for concrete results. In accord with the appended Plan of Action, and recognizing our different national capabilities and our different legal systems, we pledge to implement them without delay. We call upon the OAS and the Inter-American Development Bank to assist countries in implementing our pledges, drawing significantly upon the Pan American Health Organization and the United Nations Economic Commission for Latin America and the Caribbean as well as sub-regional organizations for integration. To give continuity to efforts fostering national political involvement, we will convene specific high-level meetings to address, among others, topics such as trade and commerce, capital markets, labor, energy, education, transportation, telecommunications, counter-narcotics and other anti-crime initiatives, sustainable development, health, and science and technology. To assure public engagement and commitment, we invite the cooperation and participation of the private sector, labor, political parties, academic institutions and other non-governmental actors and organizations in both our national and regional efforts, thus strengthening the partnership between governments and society. Our thirty-four nations share a fervent commitment to democratic practices, economic integration, and social justice. Our people are better able than ever to express their aspirations and to learn from one another. The conditions for hemispheric cooperation are propitious. Therefore, on behalf of all our people, in whose name we affix our signatures to this Declaration, we seize this historic opportunity to create a Partnership for Development and Prosperity in the Americas.

(8) THE SUMMIT OF AMERICAS PLAN OF ACTION.TABLE OF CONTENTS.I.Preserving and strengthening the Community of Democracies of the Americas.

IV. Guaranteeing sustainable development and conserving our natural environment for future

The heads of state and government participating in the 1994 Summit of the Americas in Miami, Florida, desirous of furthering the broad objectives set forth in their Declaration of Principles and mindful of the need for practical progress on the vital tasks of enhancing democracy, promoting development, achieving economic integration and free trade, improving the lives of their people, and protecting the natural environment for future generations, affirm their commitment to this Plan of Action.

1. Strengthening democracy. The strengthening, effective exercise and consolidation of democracy constitute the central political priority of the Americas. The Organization of American States (OAS) is the principal hemispheric body for the defense of democratic values and institutions; among its essential purposes is to promote and consolidate representative democracy, with due respect to the principle of non-intervention. The OAS has adopted multilateral procedures to address the problems created when democratic order has been interrupted unconstitutionally. In order to prevent such crises, the OAS needs to direct more effort toward the promotion of democratic values and practises and to the social and economic strengthening of already-established democratic regimes. Governments will: i)Give expeditious consideration to ratifying the Cartagena, Washington and Managua protocols to the OAS charter, if they have not already done so; ii)Strengthen the dialogue among social groups and foster grass roots participation in problem solving at the local level; iii) Support efforts by the OAS to promote democracy by:encouraging exchanges of election-related technologies and assisting national electoral organizations, at the request of the interested state; strengthening the unit for the promotion of democracy so that it can provide assistance at the request of the interested state on such matters as legislative and judicial processes, government reforms (including administration of

justice, technical modernization of national legislative bodies, simplification of government regulations and promotion of participation by community organizations in local democracy), and other institutional changes, encouraging opportunities for exchange of experiences among member states democratic institutions, particularly legislature-to-legislature and judiciary-to-judiciary.Fostering understanding, dialogue and political reconciliation, at the request of the affected state and bearing in mind that national reconciliation comes from within; Requesting the OAS to promote and follow-up on these commitments. 2. Promoting and protecting human rights. Great progress has been made in the Hemisphere in the development of human rights concepts and norms, but serious gaps in implementation remain. While courts ultimately have the responsability for enforcing legal rights and obligations, reforms in other institutions are needed to contribute to the further development of a climate of respect for human rights. There must also be universal access to justice and effective means to enforce basic rights. A democracy is judged by the rights enjoyed by its least influential members. Governments will: i)Give serious consideration to adherence to international human rights instruments to which they are not already party; ii) Cooperate fully with all United Nations and inter-American human rights bodies;iii) Develop programs for the promotion and observance of human rights, including educational programs to inform people of their legal rights and their responsability to respect the rights of others; iv) Promote policies to ensure that women enjoy full and equal legal rights within their families and societies, and to ensure the removal of constraints to women’s full participation as voters, candidates and elected and appointed officials; v)Review and strengthen laws for the protection of the rights of minority groups and indigenous people and communities to ensure freedom from

discrimination, to guarantee full and equal protection under the law, and to facilitate active civic participation; vi)Support a process to review and enhance the protection of indigenous rights in OAS member states and to develop promptly na effective United Nations declaration on indigenous rights; vii)Review national legislation affecting people wit disabilities, as well as benefits and services for them, and make any changes needed to facilitate the enjoyment by these individuals of the same rights and freedoms as other members of society; viii)Undertake all measures necessary to guarantee the rights of children, and, where they have not already done so, give serious consideration to ratifying the United Nations Convention on the Rights of the Child; ix) Guarantee the protection of the human rights of all migrant workers and their families; x) Take the necessary steps to remedy inhumane conditions in prisons and to minimize the number of pre-trial detainees; xi) Review training curricula for law enforcement agents to ensure that they adequately cover proper treatment of suspects and detainees as well as relations with the community; xii) Exchange experiences on protection of human rights at the national level and, where possible, cooperate in the development of law enforcement and security force training or other programs to reduce the potential for human rights violations;xiii) Call on the OAS and the Inter-American Development Bank (IDB) to establish or to reinforce programs, as appropriate, to support national projects for the promotion and observance of human rights in the Western Hemisphere;xiv) Further strengthen the Inter-American Commission on Human Rights and the Inter-American Court of Human Rights; 3. Invigorating Society/Community participation. A strong and diverse civil society, organized in various ways and sectors, including individuals, the private sector, labor, political parties, academics, and other non-governmental actors and organizations, gives depth and durability to democracy. Similary, a vigorous democracy requires broad participation in public issues. Such activities should be carried out with complete transparency and accountability, and to this end a proper legal and regulatory framework should be established to include the possibility ob obtaining technical and financial support, including from private sources. Governments will: i)review the regulatory framework for non-governmental actors with a view to facilitating their operations and promoting their ability to receive funds. This review will emphasize the management and oversight of resources as well as transparency and the accountability to society of said actors; ii) take steps to improve the participation in social activities and initiatives of groups traditionally marginalized, including women, youth, indigenous people and the extremely poor. iii)exchange progress reports on activities in the civil society area at the 1996 Summit Conference on Sustainable Development in Bolivia; iv) consider the development by the IDB of a new Civil Society Program to encourage responsible and accountable philanthropy and civic engagement in public policy issues. 4.Promoting cultural values. Cultural development is a fundamental and integral component of development in the Americas and has na inherent capability to enrich our societies and to generate greater

understanding among our countries. In order to promote cultural values, governments will: i) encourage more dynamic relations among public and private institutions and organizations, including universities, museums, and centers of art and literature as well as among individual cultural actors. Such exchanges emphasize our cultural diversity, recognize the value of our local cultures and contribute to improving hemispheric understanding; ii)request that the OAS and IDB reinforce their plans and programs to facilitate these cultural exchanges and the flow of cultural and historical information within and among our nations. 5.Combating corruption. The problem of corruption is now an issue of serious interest not only in this Hemisphere, but in all regions of the world. Corruption in both the public and private sectors weakens democracy and undermines the legitimacy of governments and institutions. The modernization of the state, including deregulation, privatization and the simplification of government procedures, reduces the opportunities for corruption. All aspects of public administration in a democracy must be transparent and open to public scrutiny. Governments will: i)Promote open discussion of the most significant problems facing government and develop priorities for reforms needed to make government operations transparent and accountable. ii)Ensure proper oversight of government functions by strengthening internal mechanisms, including investigative and enforcement capacity with respect to acts of corruption, and facilitating public access to information necessary for meaningful outside review. iii)Establish conflict of interest standards for public employees and effective measures against illicit enrichment, including stiff penalties for those who utilize their public position to benefit private interests. iv)Call on the governments of the world to adopt and enforce measures against bribery in all financial or commercial transactions with the Hemisphere; toward this end, invite the OAS to establish liaison with the OECD Working Group on Bribery in International Business Transactions. v)Develop mechanisms of cooperation in the judicial and banking areas to make possible rapid and effective response in the international investigation of corruption cases. vi)Give priority to strengthening government regulations and procurement, tax collection, the administration of justice and the electoral and legislative processes, utilizing the support of the IDB and other international financial institutions where appropriate. vii) Develop within the OAS, with due regard to applicable treaties and national legislation, a hemispheric approach to acts of corruption in both the public and private sectors that would include extradition and prosecution of individuals so charged, through negotiation of a new hemispheric agreement or new arrangements within existing frameworks for international cooperation. 6.Combating the Problem of ilegal Drugs and Related Crimes. The problems of illegal drug and related criminal activities pose grave threats to the societies, free market economies, and democratic institutions of the Hemisphere. Drug use imposes enormous social costs; drug money and income are net drains on economic growth; and drug lords and criminal organizations endanger the security of our people through corruption, intimidation, and violence. While drug trafficking continues to be a significant source of illegal funds, the money laundering industry increasingly deals with the proceeds of all types of criminal activity. An integrated and balanced approach that includes respect for national sovereignty is essential to confront all aspects of these problems. For these reasons, a broad coordinated hemispheric strategy to reduce drug use and production, including new enforcement methods that can disrupt drug trafficking and money laundering networks and prosecute those engaged in such activities, is required. In this context, governments note the work of the 1992 San Antonio Summit, endorse the efforts of the Inter-American Commission on Drug Abuse Control, and agree to work together to formulate a counter-narcotics strategy for the 21st Century. Governments will: i)Ratify the 1988 United Nations Convention Against the Illicit Traffic of Narcotics and Psychotropic Substances and make it a criminal offense to launder the proceeds of all serious crimes. ii)Enact legislation to permit the freezing and forfeiture of the proceeds of money laundering and consider the sharing of forfeited assets among governments. As agreed by ministers and representatives of Caribbean and Latin American governments in the Kingston Declaration, November 5-6, 1992, implement the recommendations of the Caribbean Financial Action Task Force on Money Laundering and work to adopt the Model Regulations of the Inter-American Commission on Drug Abuse Control (CICAD). a)Encourage financial institutions to report large and suspicious transactions to appropriate authorities and develop effective procedures that would allow the collection of relevant information from financial institutions. b)Work individually and collectively to identify the region’s narcotics trafficking and money laundering networks, prosecute their leaders, and seize assets derived from these criminal activities. c)Adopt programs to prevent and reduce the demand for and the consumption of illicit drugs. d)Adopt effective and environmentally-sound national strategies to prevent or reduce substantially the cultivation and processing of crops used for the illegal drug trade, paying particular attention to national and international support for development programs that create viable economic alternatives to drug production. e)Pay particular attention to the control of precursor chemicals and support comprehensive drug interdiction strategies. f)Strengthen efforts to control firearms, ammunition, and explosives to avoid their diversion to drug traffickers and criminal organizations. g)Hold a working-level conference, to be followed by a ministerial conference, to study and agree on a coordinated hemispheric response, including consideration of an inter-American convention, to combat money laundering. h)Convene a hemispheric-wide conference of donors, including multilateral development banks and UN agencies, to seek resources for alternative development programs aimed at curbing the production, trafficking, and use of illicit drugs, and the rehabilitation of addicts. i)Support the discussion the OAS has initiated with the European Union on measures to control precursor chemicals. j)Support the convening of a global counter-narcotics conference.7.Eliminating the Threat of National and International Terrorism. National and international terrorism constitute a systematic and deliberate violation of the rights of individuals and an assault on democracy itself. Recent attacks that some of our countries have suffered have demonstrated the serious threat that terrorism poses to security in the Americas. Actions by governments to combat and eliminate this threat are essential elements in guaranteeing law and order and maintaining confidence in government, both nationally and internationally. Within this context, those who sponsor terrorist acts or assist in their planning or execution through the abuse of diplomatic privileges and immunities or other means will be held responsible by the international community. Governments will: i)Promote bilateral and subregional agreements with the aim of prosecuting terrorists and penalizing terrorist activities within the context of the protection of human rights and fundamental freedoms. ii)Convene a special conference of the OAS on the prevention of terrorism. iii)Reaffirm the importance of the extradition treaties ratified by the states of the Hemisphere, and note that these treaties will be strictly complied with as an expression of the political will of governments, in accordance with international law and domestic legislation. 8.Building Mutual Confidence. The expansion and consolidation of democracy in the Americas provide an opportunity to build upon the peaceful traditions and the cooperative relationships that have prevailed among the countries of the Western Hemisphere. Our aim is to strengthen the mutual confidence that contributes to the economic and social integration of our peoples. Governments will: i)Support actions to encourage a regional dialogue to promote the strengthening of mutual confidence, preparing the way for a regional conference on confidence-building measures in 1995, which Chile has offered to host. II. PROMOTING PROSPERITY THROUGH ECONOMIC INTEGRATION AND FREE TRADE. 9.Free Trade in the Americas. 1) While pursuing economic integration and free trade in the Hemisphere, we reinforce our strong commitment to multilateral rules and disciplines. We endorse full and rapid implementation of the Uruguay Round, active multilateral negotiations in the World Trade Organization, bilateral and subregional trade agreements, and other trade arrangements that are consistent with the provisions of the GATT/WTO and that do not raise barriers to other nations. 2) Extraordinary achievements have been made by countries of the Hemisphere in trade liberalization and subregional integration. Free trade and increased economic integration are key factors for sustainable development. This will be furthered as we strive to make our trade liberalization and environmental policies mutually supportive, taking into account efforts undertaken by the GATT/WTO and other international organizations. As economic integration in the Hemisphere proceeds, we will further secure the observance and promotion of worker rights, as defined by appropriate international conventions. We will avoid disguised restrictions on trade, in accordance with the GATT/WTO and other international obligations. 3) We will strive to maximize market openness through high levels of discipline as we build upon existing agreements in the Hemisphere. We also will strive for balanced and comprehensive agreements, including among others: tariffs and non-tariff barriers affecting trade in goods and services; agriculture; subsidies; investment; intellectual property rights; government procurement; technical barriers to trade; safeguards; rules of origin; antidumping and countervailing duties; sanitary and phytosanitary standards and procedures; dispute resolution; and competition policy. 4) We recognize that decisions on trade agreements remain a sovereign right of each nation. In addition, recognizing the importance of effective enforcement of international commitments, each nation will take the necessary action, in accordance with its own legislation and procedures, to implement the agreements in the areas covered by this Plan of Action. 5) As we work to achieve the "Free Trade Area of the Americas," opportunities such as technical assistance will be provided to facilitate the integration of the smaller economies and increase their level of development. Immediate Action Agenda: We direct our ministers responsible for trade to take the following concrete initial steps to achieve the "Free Trade Area of the Americas." 6) With the objective of ensuring full and complete discussion among the parties to the various trade agreements in the Hemisphere, we direct that meetings be held under existing trade and investment fora. Members of these fora will determine areas of commonality and divergence in the particular agreements under review and should consider the means of improving disciplines among them and bringing them together. We further direct that members of these fora inform ministers of the status of their discussions and make recommendations for achieving the "Free Trade Area of the Americas." 7) Transparency in, and a clear understanding of, the subregional and bilateral agreements achieved to date among the nations in the Hemisphere are critical for advancing trade and investment integration in the Americas. We will direct the OAS Special Committee on Trade, with the support of the IDB, ECLAC, and other specialized regional and subregional organizations, to assist in the systematization of data in the region and to continue its work on studying economic integration arrangements in the Hemisphere, including brief comparative descriptions of the obligations in each of the Hemisphere’s existing trade agreements. We will further direct the Special Committee on Trade to prepare a report of its work by June 1995 for

the meeting of ministers. 8) We direct our ministers responsible for trade to: (a)review the progress of work undertaken in the fora noted in paragraphs 6 and 7; (b)provide guidance with respect to further work; and consider areas for immediate attention—such as customs facilitation and product testing and certification with a view to mutual recognition agreements—that could be taken up in the appropriate fora. 9) Therefore, today we launch the "Free Trade Area of the Americas" by initiating the following process. We will direct the OAS to assist the host country in arranging the ministerial meetings. January 1995. Initiation of work programs and establishment of schedules in the fora in paragraph 6 and in the Special Committee on Trade. June 1995. Meeting of Ministers responsible for trade. preliminary report on status of work in the for a described in paragraph 6. preliminary Special Committee on Trade report. areas for immediate consideration. March 1996. Meeting of Ministers responsible for trade. final report to ministers by the Special Committee on Trade. final reports to ministers from the fora described in paragraph 6. timetable for further work. 10.Capital Markets Development and Liberalization. The availability of capital at competitive rates is essential to finance private sector investment - a vital ingredient in economic development. Developing, liberalizing and integrating financial markets domestically and internationally, increasing transparency, and establishing sound, comparable supervision and regulation of banking and securities markets will help to reduce the cost of capital by enhancing investor and depositor confidence. Governments will:i) Form a Committee on Hemispheric Financial Issues to examine steps to promote the liberalization of capital movements and the progressive integration of capital markets, including, if deemed appropriate, the negotiation of common guidelines on capital movements that would provide for their progressive liberalization. ii) Prepare, in cooperation with the Inter-American Development Bank, a comprehensive list of national capital regulations in order to promote transparency and support the discussions in the Committee on Hemispheric Financial Issues. iii)Support the cooperative endeavors of the Association of Latin American and Caribbean Bank Supervisors and the Council of Securities Regulators of the Americas to provide sound supervision and regulation that support the development and progressive integration of markets. The Committee on Hemispheric Financial Issues should also review problems of debt in the Hemisphere, taking account of ongoing work and drawing, as appropriate, on a broad range of expertise. 11.Hemispheric Infrastructure.Development in this Hemisphere depends on urgent infrastructure measures, including the priority allocation of financial resources, in accordance with national legislation and with the participation of both the public and private sectors. Strengthening the flow of private productive capital to economically and environmentally sound projects has become increasingly vital to countries throughout the Hemisphere as the growth of official sources of capital has failed to keep pace with the area’s needs. Governments will: i) Charge multilateral development banks to work with governments and, as appropriate, private concerns, to develop mechanisms to deal with lending and investment issues. ii) Draw on other regional and sub-regional experiences within the Hemisphere to support infrastructure development. Governments that so wish will develop suitable mechanisms, including multilateral and bilateral commitments on regulatory and legal rules and practices, to encourage private investment, both domestic and foreign, in national and transboundary infrastructure projects. 12.Energy Cooperation* The nations of the Hemisphere have begun a new era of economic growth. This new era is based on greater economic cooperation, freer trade, and open markets. Sustainable economic development requires hemispheric cooperation in the field of energy. Governments will: i) Convene a follow-up hemispheric officials’ meeting in the first semester of 1995 to encourage cooperation to study ways to develop the energy industry within the Hemisphere, consistent with the least cost national energy strategies and the activities described in the "Partnership for Sustainable Energy use" in the following areas:a) Consideration of ways to use the energy sector to promote sustainable economic growth. b) Cooperation to study ways to optimize and facilitate the financing mechanisms of international financial institutions to support the development of projects in the energy sector, especially including those pertaining to the enhancement of efficiency in the use of energy and to non-conventional renewable energy. c) Cooperation to promote capital investment and to foster the use of innovative financial mechanisms to increase investment in the energy sector and the enhancement of efficiency in the use of energy and non-conventional renewable energy, in accordance with each country’s legislation and developmental needs. d) Promotion of the use of efficient and non-polluting energy technologies, both conventional and renewable, leading to a higher degree of knowledge and technical expertise in this area. e) Consideration of the enhancement of ongoing efforts to establish electric and other energy facilities in accordance with domestic regulatory frameworks and, where appropriate, under sub-regional agreements. * This initiative is integrally linked with the Partnership for Sustainable Energy Use item. 13.Telecommunications and Information Infrastructure. A country’s information infrastructure - telecommunications, information technology, and broadcasting - is an essential component of political, economic, social and cultural development.The information infrastructure development needs in the Americas are immense. The governments of the Americas intend to meet these needs

by engaging in multiple actions, where consistent with their respective governing laws, such as: encouraging private sector investment to increase participation in the telecommunications and

information infrastructure sectors; promoting competition; implementing flexible regulatory regimes; stimulating diversity of content, including cultural and linguistic diversity; providing access to information networks for service and information providers; and ensuring universal service, so that the benefits of the information infrastructure will be available to all members of our societies. Governments will: i) Engage in ongoing discussions at the international level of the actions referred to above and endeavor to take those actions in their own countries, taking account of domestic conditions and circumstances. ii) Undertake efforts to make government information more publicly available via electronic means. iii) Review the availability and interoperability of connections to international networks that facilitate trade, improve education and improve access to health care. iv) Encourage major universities, libraries, hospitals and government agencies to have access to these networks, building on the work of the OAS Hemisphere-Wide Inter-University Scientific and Technological Information Network. Via the OAS Inter-American Telecommunications Commission (CITEL), and in coordination with the sub-regional telecommunications organizations, develop and carry out a work program to: v) Evaluate regulatory, technical and legal means to promote liberalization, common standards, interoperability of networks and compatible use of the radio spectrum. vi) Examine ways to promote greater consistency of the certification processes for telecommunications equipment among member countries. vii) Develop regional guidelines for the provision of international value-added network services. viii) Support a meeting by 1996, coordinated by CITEL, of senior telecommunications officials to conduct further discussions of the above actions. 14.Cooperation in Science and Technology. There is a need to re-assess the on-going interaction among the region’s science and technology (S&T) infrastructure and cooperative mechanisms; to provide impetus for improved cooperation; to reduce barriers to collaboration. To augment the demand for technology; and to disseminate information about technological opportunities using new advances in information technology; and generally to improve communications among the key S&T organizations, researchers in the region, and growing technology-based small and medium-sized enterprises. The commitment of the countries of the Americas to non-proliferation has gained new momentum with the acceptance of the international safeguard regime by some of our countries. The outstanding progress achieved in this field is to be commended and should contribute to enhanced opportunities for cooperation in the area of advanced goods and technologies. Governments will: i)Convene a meeting of ministers responsible for science and technology in the Hemisphere within the next year to assess progress and to promote the Bolivar Programme and the OAS Common Market of Scientific and Technological Knowledge (MERCOCYT) program, to provide the necessary support to improve scientific partnerships and technological ventures in the region, and to explore the possibility of establishing a council on science and technology. ii)Use existing multilateral mechanisms in the region to address a wide number of common S&T interests, including enhanced professional technical training, development and implementation of national policies and regional programs, dissemination and standardization of science and technology (including metrology and other technical norms), environmental technology development, and more effective partnerships to promote learning and competitiveness. iii)Stimulate greater S&T interaction in the Hemisphere and support efforts already undertaken in other fora, including the Inter-American Institute for Global Change Research, and the International Research Institute for Climate Prediction. Governments will serve to advance and communicate new initiatives such as the Global Learning and Observations to Benefit the Environment (GLOBE) program. iv) Confirm their interest in participating in new initiatives driven by a demand from private sector and non-government interests in technological opportunities. v) Confirm their national commitments to share S&T information with others in the Hemisphere, in accord with their respective laws, and to expand cooperation in scientific and environmental research. 15.Tourism. Tourism is important to our economies and valuable in promoting understanding among the people of the Americas. Governments will: i)Undertake initiatives to stimulate tourism in the Hemisphere. III. ERADICATING POVERTY AND DISCRIMINATION IN OUR HEMISPHERE. Large segments of society in our Hemisphere, particularly women, minorities, the disabled, indigenous groups, refugees and displaced persons, have not been equipped to participate fully in economic life. Nearly one-half of the Hemisphere’s population still lives in poverty. Expanded participation of the poor in the region’s economies, access to productive resources, appropriate support for social safety nets and increased human capital investments are important mechanisms to help eradicate poverty. In pursuit of these objectives, we reaffirm our support for the strategies contained within the "Commitment on a Partnership for Development and Struggle to Overcome Extreme Poverty" adopted by the OAS General Assembly. The World Summit for Social Development to be held in Copenhagen in March 1995, as well as the United Nations World Conference on Women in Beijing in September 1995, will provide unique opportunities to define strategies to promote social integration, productive employment and the eradication of poverty. 16. Universal Access to Education. Universal literacy and access to education at all levels, without distinction by race, national origin or gender, are an indispensable basis for sustainable social and cultural development, economic growth and democratic stability. Governments will: i) Guarantee universal access to quality primary education, working with public and private sectors and non-governmental actors, and with the support of multinational institutions. In particular, governments will seek to attain by the year 2010 a primary completion rate of 100 per cent and a secondary enrollment rate of at least 75 per cent, and to prepare programs to eradicate illiteracy, prevent truancy and improve human resources training. ii)Promote, with the support of international financial institutions and the private sector, worker professional training as well as adult education, incorporating efforts to make such education more relevant to the needs of the market and employers. iii)Improve human resources training, and technical, professional and teacher training, which are vital for the enhancement of quality and equity of education within the Hemisphere. iv)Increase access to and strengthen the quality of higher education and promote cooperation among such institutions in producing the scientific and technological knowledge that is necessary for sustainable development. v)Support strategies to overcome nutritional deficiencies of primary school children in order to enhance their learning ability.vi)Support decentralization including assurance of adequate financing and broad participation by parents, educators, community leaders and government officials in education decision-making. vii)Review existing regional and hemispheric training programs and make them more responsive to current needs. viii)Create a hemispheric partnership, working through existing organizations, to provide a consultative forum for governments, non-governmental actors, the business community, donors, and international organizations to reform educational policies and focus resources more efficiently. Urge the March 1995 World Summit for Social Development and the September 1995 Fourth World Conference on Women to address the issue of universal access to education. 17. Equitable Access to Basic Health Services. Despite impressive gains in the Hemisphere, limitations on health services access and quality have resulted in persistently high child and maternal mortality, particularly among the rural poor and indigenous groups. Governments will: i) Endorse the maternal and child health objectives of the 1990 World Summit for Children, the 1994 Nariño Accord and the 1994 International Conference on Population and Development, and reaffirm their commitment to reduce child mortality by one-third and maternal mortality by one-half from 1990 levels by the year 2000. ii)Endorse a basic package of clinical, preventive and public health services consistent with World Health Organization, Pan American Health Organization (PAHO) and World Bank recommendations and with the Program of Action agreed to at the 1994 International Conference on Population and Development. The package will address child, maternal and reproductive health interventions, including prenatal, delivery and postnatal care, family planning information and services, and HIV/AIDS prevention, as well as immunizations and programs combating the other major causes of infant mortality. The plans and programs will be developed according to a mechanism to be decided upon by each country. iii) Develop or update country action plans or programs for reforms to achieve child, maternal and reproductive health goals and ensure universal, non-discriminatory access to basic services, including health education and preventive health care programs. The plans and programs will be developed according to a mechanism to be decided upon by each country. Reforms would encompass essential community-based services for the poor, the disabled, and indigenous groups; stronger public health infrastructure; alternative means of financing, managing and providing services; quality assurance; and greater use of non-governmental actors and organizations. iv) Strengthen the existing Inter-American Network on Health Economics and Financing, which serves as an international forum for sharing technical expertise, information and experience, to focus on health reform efforts. The network gathers government officials, representatives of the private sector, non-governmental institutions and actors, donors and scholars for policy discussions, analysis, training and other activities to advance reform; strengthens national capabilities in this critical area; and fosters Hemisphere-wide cooperation. v) Convene a special meeting of hemispheric governments with interested donors and international technical agencies to be hosted by the IDB, the World Bank and PAHO to establish the framework for health reform mechanisms, to define PAHO’s role in monitoring the regional implementation of country plans and programs, and to plan strengthening of the network, including the cosponsors’ contributions to it. vi) Take the opportunity of the annual PAHO Directing Council Meeting of Western Hemisphere Ministers of Health, with participation of the IDB and donors, to develop a program to combat endemic and communicable diseases as well as a program to prevent the spread of HIV/AIDS, and to identify sources of funding. Urge the March 1995 World Summit for Social Development and the September 1995 Fourth World Conference on Women to address the issue of access to health services. 18.Strengthening the Role of Women in Society. The strengthening of the role of women in society is of fundamental importance not only for their own complete fulfillment within a framework of equality and fairness, but to achieve true sustainable development. It is essential to strengthen policies and programs that improve and broaden the participation of women in all spheres of political, social, and economic life and that improve their access to the basic resources needed for the full exercise of their fundamental rights. Attending to the needs of women means, to a great extent, contributing to the reduction of poverty and social inequalities. Governments will: i) Recognize and give full respect for all rights of women as an essential condition for their development as individuals and for the creation of a more just, united and peaceful society. For that purpose, policies to ensure that women enjoy full legal and civil rights protection will be promoted. ii) Include a gender focus in development planning and cooperation projects and promote the fulfillment of women’s potential, enhancing their productivity through education, training, skill development and employment. iii) Promote the participation of women in the decision-making process in all spheres of political, social and economic life. iv)Undertake appropriate measures to address and reduce violence against women. v)Adopt appropriate measures to improve women’s ability to earn income beyond traditional occupations, achieve economic self-reliance, and ensure women’s equal access to the labor market at all employment levels, the social security systems, the credit system, and the acquisition of goods and land. vi) Cooperate fully with the recently-appointed Special Rapporteur on Violence Against Women, its Causes and Consequences, of the United Nations Commission on Human Rights. vii) Support and actively work to secure the success of the United Nations World Conference on Women that will take place in Beijing in September 1995. viii) Encourage, as appropriate, ratification and compliance with the International Convention on the Elimination of all Forms of Discrimination Against Women and the Inter-American Convention on the Prevention, Punishment and Eradication of Violence Against Women. Further strengthen the Inter-American Commission on Women. a) Call upon regional and international financial and technical organizations to intensify their programs in favor of women. Encourage the adoption of follow-up procedures on the national and international measures included in this Plan of Action. 19.Encouraging Microenterprises and Small Businesses. Microenterprises and small businesses account for a large percentage of the employment of the poor, particularly women, and contribute a considerable percentage of the gross domestic product of our countries. Strengthened support for microenterprises and small businesses is a key component of sustainable and equitable development. Governments will: i) Further pursue or initiate programs of deregulation and administrative simplification. ii) Increase efforts to enable enterprises to obtain information on appropriate technologies (especially those that are environmentally sound), markets, processes, raw materials and management systems that will permit them to be more competitive in the global economy. iii) Develop programs of financial deregulation to reduce costs in credit transactions and strengthen the institutional capacity of the financial sector servicing microenterprises and small businesses, and encourage the active participation by multilateral and bilateral agencies, development banks, commercial banks and other intermediary credit organizations, consistent with strict performance standards. iv) Strengthen the institutions and programs that supply services and facilitate access to training and technical assistance to make possible this sector’s participation in the global economy through export of its products and services. v) Encourage cooperation among businesses in this sector to enable them to benefit from the advantages of economies of scale without losing their distinctive characteristics.vi)Promote the strengthening of relations among the public, private and mixed (public/private) institutions that support the microenterprise and small business sector through programs of information, training, technical assistance, financing and association-building, enabling this sector to thrive over the long term. Recommend to the multilateral development organizations, especially the World Bank and the IDB, the establishment or fortification of funds and other mechanisms to support microenterprises and small businesses.20.White Helmets-Emergency and Development Corps. The "White Helmets Initiative" is based on the conviction that a concerted international effort of developing and developed countries can facilitate the eradication of poverty and strengthen the humanitarian rapid response capability of the international community to emergency humanitarian, social and developmental needs. The countries of the Americas could pioneer this initiative through the creation of national corps of volunteers that could respond to calls from other countries in the region. These national corps could eventually be put at the disposal of the United Nations. Governments will on a voluntary basis: i) Establish, organize and finance a corps of volunteers to work at the national level and, at the same time, be at the disposal of other countries of the Hemisphere and, eventually, the United Nations system, on a stand-by basis, for prevention, relief, rehabilitation, technical, social and development cooperation, with the aim to reduce the effects of natural disasters, social and developmental needs and emergencies. Through the creation of a national corps of volunteers, be responsible for the following: Selection and training of its national volunteer corps; a) Financing of its national corps of volunteers, encouraging the involvement of the private sector; b)Preparedness to send specialized volunteers, on short notice and at the request of the United Nations, to scope with situations generated by or to prevent the effects of natural disasters and humanitarian emergencies. c) Contribute to the formation of this corps and invite private enterprises, foundations and regional financial institutions to do so. d) Contribute to the development of an international roster of volunteers to be maintained in a master plan in the United Nations to be drawn upon to complement the activities of existing UN mechanisms. The IDB,OAS, and PAHO should be invited to participate and assist in developing this corps.IV.GUARANTEEING SUSTAINABLE DEVELOPMENT AND CONSERVING OUR NATURAL ENVIRONMENT FOR FUTURE GENERATIONS 21.Partnership for Sustainable Energy Use.* Consistent with Agenda 21 and the Framework Convention on Climate Change, sustainable energy development and use promote economic development and address environmental concerns. Governments and the private sector should promote increased access to reliable, clean, and least cost energy services through activities and projects that meet economic, social, and environmental requirements within the context of national sustainable development goals and national legal frameworks. Governments will: i) Pursue, in accordance with national legislation, least cost national energy strategies that consider all options, including energy efficiency, non-conventional renewable energy (i.e., solar, wind, geothermal, small hydro, and biomass), and conventional energy resources. ii) Emphasize market-oriented pricing, which discourages wasteful energy use. iii) Identify for priority financing and development at least one economically viable project in each of the following areas: non-conventional renewable energy, energy efficiency, and clean conventional energy. iv) Promote, in cooperation with the private sector and rural and isolated communities, rural electrification programs which take into account where appropriate the utilization of renewable energy sources, in accordance with the domestic regulatory framework. v) Seek to ratify and begin implementation of the provisions of the Framework Convention on Climate Change which entered into force on March 21, 1994. vi) Encourage the World Bank and IDB to increase promptly and substantially, as a portion ofenergy lending, financing of projects in energy efficiency and renewable energy and financing to improve the environmental sustainability of conventional energy sources, in accordance with economic rationality. vii) Call on the multilateral financial institutions and other public and private financial institutions to finance regional and national programs in support of this action plan, such as training and exchange programs as well as technology cooperation, in accordance with the needs and conditions of receiving countries. viii) Assist with coordination and technical cooperation between countries, using existing regional organizations, including project identification and implementation, training programs, and personnel and information exchanges to increase capacity.ix) Promote the identification and implementation of private sector projects that reduce greenhouse gas emissions. x) Convene a Sustainable Energy Symposium in the first half of 1995 to discuss follow-up activities relative to this initiative. In the spirit of cooperation countries will share their experiences and discuss progress on implementing this action plan. *This initiative

is integrally linked with the Energy Cooperation item. 22.Partnership for Biodiversity. Our Hemisphere contains over half the world’s biodiversity. To sustain the Hemisphere’s social and economic development, we must intensify efforts to understand, assess, and sustainably use this living resource base. We must act now to increase the technical and management capacity and public awareness of national and international efforts in this area. Agenda 2l, the Convention on Biological Diversity, and other related international instruments recognize these needs and call for the conservation and sustainable use of biodiversity resources. Governments will: i) Seek to ensure that strategies for the conservation and sustainable use of biodiversity are integrated into relevant economic development activities including forestry, agriculture, and coastal zone management, taking into account the social dimension and impact of these activities. ii) Develop and implement the policies, techniques, and programs to assess, conserve, and sustainably use terrestrial, marine, and coastal biodiversity resources. iii) Seek to ratify the Convention on Biological Diversity and pursue opportunities for collaboration under it, and, as appropriate, other international and regional environmental instruments. iv) Support democratic governmental mechanisms to engage public participation, particularly including members of indigenous communities and other affected groups, in the development of policy involving conservation and sustainable use of natural environments. The forms of this participation should be defined by each individual country. v) Develop national plans and programs to establish and strengthen the management of parks and reserves, seeking links to economic, social, and ecological benefits for local people. vi) Build capacity for the conservation and sustainable use of biodiversity, through programs on management of parks and protected areas, forests and wetlands management, the Small Islands Developing States Action Plan, the Coral Reef Initiative, CITES support projects, and the Caribbean Regional Marine Pollution Action Plan, among others. vii) Launch a "Decade of Discovery" to promote hemispheric technical and scientific cooperation and to facilitate the exchange of information relevant to the conservation and sustainable use of biological diversity.viii) Increase support of training and education initiatives addressing sustainable use of biodiversity resources and foster activities by universities, non-governmental actors and organizations and the private sector to assist in the training of managers and to empower local communities. ix) Call on multilateral financial institutions, including the IDB and the Global Environment Facility, to support eligible regional and national projects. x) Discuss progress on implementation of national and international activities described above at the 1996 Summit Conference on Sustainable Development in Bolivia, and at subsequent annual sustainable development ministerials. 23.Partnership for Pollution Prevention. As recognized in Agenda 21, sound environmental management is an essential element of sustainable development. Cooperative efforts are needed to develop or improve, in accordance with national legislation and relevant international instruments: (1) frameworks for environment protection; and (2) mechanisms for implementing and enforcing environmental regulations. To achieve this goal, a new partnership will promote cooperative activities for developing environmental policies, laws, and institutions; increasing technical capacity; promoting public awareness and public participation; continuing to pursue technological,financial and other forms of cooperation; and facilitating information exchange, including on environmentally sound technologies. The activities of the partnership will build on and advance the implementation of international agreements and principles including those agreed to at the 1992 United Nations Conference on Environment and Development and the 1994 Global Conference on the Sustainable Development of Small Island Developing States, in areas identified as priorities by countries of the Hemisphere. Governments will: i) Strengthen and build technical and institutional capacity to address environmental priorities such as pesticides, lead contamination, pollution prevention, risk reduction, waste and sanitation issues, improved water and air quality, access to safe drinking water, urban environmental problems, and to promote public participation and awareness. ii) Develop and implement national action plans to phase out lead in gasoline. iii) Strengthen national environmental protection frameworks and mechanisms for implementation and enforcement, and include sustainability criteria and objectives in national and other development strategies. iv) Undertake national consultations to identify priorities for possible international collaboration. v) Support democratic governmental mechanisms to engage public participation, particularly from members of indigenous and other affected communities, in the consideration of policies regarding the environmental impact of development projects and the design and

enforcement of environmental laws. vi) Convene a meeting of technical experts, designated by each interested country, to develop a framework for cooperative partnership, building on existing institutions and networks to identify priority projects. These projects will initially focus on (1) the health and environmental problems associated with the misuse of pesticides, and (2) the impacts of lead contamination from gasoline and other sources. Subsequent activities could address waste, air, water quality, marine pollution from ships and other sources, and problems associated with urbanization. vii) Promote the participation of organizations, such as the IDB, MIF, the World Bank, PAHO, the OAS, and non-governmental actors and organizations, as appropriate, to finance, develop and implement priority projects. viii) Develop environmental policies and laws with the goal of ensuring that economic integration of the region occurs in an environmentally sustainable manner. ix) Establish mechanisms for cooperation among government agencies, including in the legal and enforcement areas, to facilitate environmental information exchange, technology cooperation and capacity-building. x) Develop compatible environmental laws and regulations, at high levels of environmental protection, and promote the implementation of international environmental agreements. xi) Discuss progress on implementation of international and national activities described above at the 1996 Summit Conference on Sustainable Development in Bolivia and at subsequent annual sustainable development ministerials. Appendix. The primary responsibility for implementing this Plan of Action falls to governments, individually and collectively, with participation of all elements of our civil societies. Existing organizations or institutions are called upon to implement the package of initiatives that has emerged from this Summit of the Americas. In many instances we have proposed that specific issues be examined by meetings of ministers, senior officials or experts. We are also proposing that some of these initiatives be carried out in partnerships between the public and private sector. Wanting to benefit from existing hemispheric mechanisms, and considering the various proposals included in this Plan of Action, we offer the following recommendations, which shall not impede any government from approaching other institutions not cited herein, as appropriate. I.Principal Initiatives in Which International Organizations and Institutions Will Be Involved. A)The OAS will have a paramount role in following up on the various decisions of this Summit meeting. Regarding the Plan of Action, the OAS has a particularly important supporting role in connection with the following: i) Strengthening Democracy; ii) Promoting and Protecting Human Rights; iii) Combating Corruption; iv) Eliminating the Threat of National and International Terrorism; v) Building Mutual Confidence; vi) Free Trade in the Americas; vii) Telecommunications and Information Infrastructure. The Action Plan also envisages roles for the OAS in the following areas: i) Promoting Cultural Values; ii) Combating the Problem of Illegal Drugs and Related Crimes; iii) Cooperation in Science and Technology; iv) Strengthening the Role of Women in Society; v) Partnership for Pollution Prevention. B) We call on the Inter-American Development Bank to support the activities specified in this Plan of Action. The policies agreed in the recently completed augmentation of its capital and replenishment of the Fund for Special Operations already move in the directions identified and should receive special emphasis. The IDB has a particularly important role in connection with the following: i) Universal Access to Education; ii) Equitable Access to Basic Health Services; iii) Encouraging Microenterprises and Small Businesses; iv) Partnership for Sustainable Energy Use; v) Partnership for Biodiversity; vi) Partnership for Pollution Prevention. In addition, the Action Plan envisages roles for the IDB and its affiliates in the following areas: i) Promoting and Protecting Human Rights; ii) Invigorating Society/Community Participation; iii) Promoting Cultural Values; iv) Combating Corruption; v) Combating the Problem of illegal Drugs and Related Crimes; vi) Free Trade in the Americas; vii) Capital Markets Development and Liberalization; viii) Hemispheric Infrastructure; ix) Cooperation in Science and Technology; x) White Helmets-Emergency and Development Corps. C) Other international organizations, notably ECLAC and PAHO in the Hemisphere, as well as the World Bank and all agencies of the UN system active in the Hemisphere, are called upon to assist in the implementation of the action items where appropriate. II. High-Level Meetings. The following high level meetings and conferences are called for to carry out the mandates emanating from the Summit: Summit Conference on Sustainable Development (Bolivia, 1996) with follow-on Annual Ministerials; Ministerial Conference on Combating Money Laundering (preceded by working level meeting); Conference of Donors for Alternative Development Programs to Curb Narcotics Trafficking;Global Counter-Narcotics Conference; Special OAS Conference on Combating Terrorism; Regional Conference on Confidence-Building Measures (Chile, 1995); Meetings of Ministers Responsible for Trade (June 1995, March 1996); Meeting of Committee on Hemispheric Financial Issues; Hemispheric Meeting on Development of Energy Industries (first semester 1995); Meeting of Ministers Responsible for Science and Technology (1995); Meeting Between Governments and Donors; Technical Agencies to Establish Health Reform Mechanisms; Sustainable Energy Symposium (first half of 1995). III.Initiatives in Which Public and Private Sector Partnerships Play an Important Role. Strengthening Democracy; Promoting and Protecting Human Rights; Invigorating Society; Community Participation; Promoting Cultural Values; Combating Corruption; Partnership for Sustainable Energy Use; Hemispheric Infrastructure; Partnership for Biodiversity; Cooperation in Science and Technology; Universal Access to Education; Partnership for Pollution Prevention; Equitable Access to Basic Health Services; Encouraging Microenterprises and Small Businesses; White Helmets-Emergency and Development Corps.

(9) THE DENVER MINISTERIAL DECLARATION. SUMMIT OF THE AMERICAS TRADE MINISTERIAL. DENVER, COLORADO. JUNE 30, 1995. INTRODUCTION. 1.We, the Ministers responsible for trade representing the 34 nations which participated in the Summit of the Americas (SOA) (i), met in Denver for the first Trade Ministerial meeting mandated by our Heads of State and Government. We agreed to begin immediately al work program to prepare for the initiation of negotiations of the Free Trade Area of the Americas (FTAA) in which barriers to trade and investment will be progressively eliminated. Negotiations will be concluded no later than 2005. 2.We examined approaches for constructing the FTAA which will build one existing subregional and bilateral arrangements in order to broaden and deepend hemispheric economic integration and to bring the agreements together. We will strive to maximize market openness through high levels of discipline as we build upon existing agreements in the Hemisphere.We agreed to ensure that the FTAA will: be fully consistent with the provisions of the Agreement Establishing the World Trade Organization (WTO Agreement); be balanced and comprehensive in scope, covering among others, all areas included in the SOA Plan of Action; not raise barriers to other countries; and represent a single undertaking comprising mutual rights and obligations. 3.In view of the wide differences in levels of development and size of economies, we will actively look for ways to provide opportunities to facilitate the integration of the smaller economies and increase their level of development. 4.We recognized the importance to our nations of achieving macroeconomic stability and the efforts being made by countries in our Hemisphere to achieve such stability.INITIAL WORK PROGRAM. 5.Based on decisions made at the Summit of the Americas, we decided to initiate preparation for active negotiations. In order to meet our Heads’ of State and Government commitments for constructing the FTAA, we recognized the need for immediate preparatory work in the Hemisphere and therefore are establishing working groups in the following areas: Market Access; Customs Procedures and Rules of Origin; Investment; Standards and Technical Barriers to Trade; Sanitary and Phytosanitary Measures; Subsidies, Antidumping and Countervailing Duties; and the working group on the Smaller Economies. 6.The overall program of each working group should include the identification and examination of existing trade-related measures in each area, with a view to identifying possible approaches to negotiations. We are providing overall guidance, including a beginning timetable and initial coordinators, for each working group in the Annex. We will receive reports and determine at the March 1996 Trade Ministerial meeting the next steps to be taken in each area, including an appropriate timetable for further work. 7.At the March 1996 Trade Ministerial, we will establish working groups and their terms of reference in the following areas: Government Procurement; Intellectual Property Rights; Services; and Competition Policy. 8.All Working Groups will be open to the participation of all nations. We direct our Vice Ministers to meet, as needed, before the March 1996 Trade Ministerial to coordinate the work and to review progress of the working groups, and ask that the host of the March 1996 Trade Ministerial chair such meetings. We ask the tripartite committee—the OAS, the IDB and ECLAC (ii) to provide analytical support, technical assistance, and relevant studies within their respective areas of competence, as may be requested by the working groups.REPORTS ON WORK UNDERWAY.9.We received reports on the status of work undertaken in the various trade and investment fora and noted the entry into force of the MERCOSUR Customs Union on January 1, 1995; the entry into force of the common external tariff among the Andean Group countries on February 1, 1995; the entry into force of free trade agreements between Mexico and Costa Rica on January 1, 1995, Mexico and Bolivia on January 1, 1995, Chile and Ecuador on January 1, 1995, and the Group of Three (Mexico, Colombia, and Venezuela) on January 1, 1995; the scheduled accession of Suriname to the Caribbean Community on July 4, 1995; and the discussions within other subregional groups on strengthening and broadening economic integration in the Hemisphere. 10.The Special Committee on Trade (SCT) of the OAS submitted an initial report on its activities. We commended the SCT, which last convened in Montevideo on June 14-15,

1995, for completing the first stage of a compendium and a comparative analysis of integration agreements in the Hemisphere, and the preliminary study on tariffs and rules of origin. We look forward to receiving the full report of the SCT at the March 1996 Trade Ministerial. We stressed the importance of the SCT’s analyses in the preparatory phase of constructing the FTAA and of work by the tripartite committee—the OAS, IDB, and ECLAC—in providing information for our subsequent decisions on future work for our governments.OTHER MATTERS. 11.We are committed to transparency in the FTAA process. As economic integration in the Hemisphere proceeds, we welcome the contribution of the private sector and appropriate processes to address the protection of the environment and the further observance and promotion of worker rights, through our respective governments.FUTURE MINISTERIAL MEETINGS. 12.We accepted the invitation of the Government of Colombia to host the next Trade Ministerial to be held in March 1996. On that occasion, we will establish the date and venue of the third Trade Ministerial.ANNEX I. ACTION PLAN FOR NEW WORKING GROUPS:We instruct each working group below to complete a report for presentation to the March 1996 Trade Ministerial, including recommendations for subsequent action.I. THE WORKING GROUP ON MARKET ACCESS WILL:1.Construct and organize in the most efficient manner possible a comprehensive data base on market access barriers (tariffs and nontariff measures as required for the WTO Integrated Data Base) in the Hemisphere covering all industrial and agricultural products, using the format of the WTO Integrated Data Base; 2.Make specific recommendations for conducting market access negotiations.II. THE WORKING GROUP ON CUSTOMS PROCEDURES AND RULES OF ORIGIN WILL: 1.Compile in the most efficient manner possible a comprehensive inventory of Hemisphere customs procedures and determine the feasibility of publishing a Hemisphere Guide to Customs Procedures; develop features that are fundamental to an efficient and transparent system of rules of origin, including nomenclature and certificates of origin; 2.Identify areas for technical cooperation in customs operation, such as connections among computerized systems and the prevention of fraud; 3.Recommend a specific approach for Hemisphere-wide simplification of customs procedures; 4.Make specific recommendations for conducting negotiations on rules of origin. In view of the different expertise required to work on Customs Procedures on the one hand, and Rules of Origin on the other, the members of this Working Group should consider the most efficient way to ensure participation of the appropriate experts.III. THE WORKING GROUP ON INVESTMENT WILL:1.Create an inventory of investment agreements and treaties, and the protection therein, that exist in the region; 2.Compile in the most efficient manner possible an inventory of investment regimes in the region and, on the basis of this information, determine areas of commonality and divergence and make specific recommendations.IV.THE WORKING GROUP ON STANDARDS AND TECHNICAL BARRIERS TO TRADE WILL: 1.Recommend specific ways to enhance transparency, especially in standards development; 2.Compile information on the bodies that exist which are charged with conformity assessment to technical regulations in the Hemisphere, and those organizations that accredit such bodies; 3.Recommend methods to promote understanding of the WTO Agreement on Standards and Technical Barriers to Trade, including through technical assistance; 4.Make recommendations on product testing and certification, with a view to mutual recognition agreements.V.THE WORKING GROUP ON SANITARY AND PHYTOSANITARY (SPS) MEASURES WILL: 1.Create an inventory of all agreements on SPS in the Hemisphere and compile in the most efficient manner possible an inventory of SPS regimes in the region; 2.Recommend specific ways to enhance transparency and information-sharing and improve understanding of laws and regulations that affect trade flows in the region; 3.Identify practices that may need improvement, and make recommendations for their improvement; 4.Promote understanding of the WTO Agreement on Sanitary and Phytosanitary Measures, including through technical assistance, and recommend measures for the effective implementation of this Agreement. 5.Enhance mutual understanding of the scientific basis for SPS certification procedures, with a view to recommend ways to promote recognition of certificates among countries of the Hemisphere. 6.Compile by the most efficient means possible the methods used for risk assessment in the Hemisphere, with a view to work toward common approaches.VI.THE WORKING GROUP ON SUBSIDIES, ANTIDUMPING AND COUNTERVAILING DUTIES WILL: 1.Identify agricultural export subsidies and other export practices with similar effects on Hemispheric trade; 2.Recommend ways to address all trade-distorting export practices for agricultural products that are traded in or with the Hemisphere; 3.Promote understanding of WTO obligations in the area of subsidies, and begin to compile an inventory of subsidies practices in the Hemisphere. 4.Review information on the dumping and subsidies laws of countries in the Hemisphere; 5.Exchange views on the application and operation of trade remedy laws regarding subsidies and dumping and develop recommendations for further work.VII. THE WORKING GROUP ON SMALLER ECONOMIES WILL: 1.Identify and assess the factors affecting the participation of smaller economies in the FTAA and the expansion of trade and investment stimulated therefrom; 2.Identify and examine ways to facilitate the adjustment of the smaller economies to the FTAA process, including the promotion and expansion of their trade, and provide recommendations on measures to be taken and issues to be taken into account in the negotiations of the FTAA; 3.Request the IDB, ECLAC, the OAS and other relevant institutions to provide pertinent information on their activities to facilitate integration of the smaller economies in the Hemisphere.INITIAL WORKING GROUP COORDINATORS. We have agreed that the first meeting of each Working Group will be arranged by the following coordinators, which will inform all countries in the Hemisphere of the proposed initial meeting:

(i)Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Vincent and the Grenadines, St. Lucia, St. Kitts and Nevis, Suriname, Trinidad and Tobago, Uruguay, the United States of America, and Venezuela. (ii)Representatives of the Organization of American States, the Inter-American Development Bank (IDB), and the UN Economic Commission for Latin America and the Caribbean (ECLAC) were invited as observers.

(10) THE CARTAGENA MINISTERIAL DECLARATION. SUMMIT OF THE AMERICAS SECOND MINISTERIAL TRADE MEETING. CARTAGENA, COLOMBIA. MARCH 21, 1996. JOINT DECLARATION.INTRODUCTION. 1.We, the Ministers responsible for trade, representing the thirty-four nations that participated in the Summit of the Americas, met in Cartagena for the Second Trade Ministerial Meeting, according to the mandate issued by our Heads of State and Government during the Summit of the Americas, held in Miami. We continued the work program, to which we unanimously agreed at the First Trade Ministerial Meeting in Denver, to prepare for initiation of negotiations on the Free Trade Area of the Americas (FTAA). We strengthened our commitment to conclude negotiations no later than 2005, and to make concrete progress towards the attainment of this objective by the end of this century. 2.The principles previously adopted for constructing the FTAA include: maximizing market openess through high levels of discipline as we build upon existing agreements in the Hemisphere; full consistency with the provisions of the World Trade Organization (WTO); be balanced and comprehensive in scope, covering among others, all areas included in the Summit of the Americas Plan of Action; not raise barriers to other countries and represent a single undertaking comprising mutual rights and obligations. 3.We examined approaches for constructing the FTAA which will build on existing subregional and bilateral arrangements in order to broaden and deepen Hemispheric economic integration and to bring the agreements together. The approaches are varied and complex and must include consistency with Article XXIV of GATT 1994 and its Uruguay Round Understanding and Article V of the GATS. We instruct our Vice Ministers to discuss such approaches and to make specific recommendations before the 1997 Trade Ministerial Meeting. 4.We also considered the timing and means of launching negotiations

to establish the FTAA. We agreed that substantial and additional preparatory work is necessary for productive negotiations. We also agreed that concrete progress must be achieved by the end of the century. Taking this into account as well as the progress achieved in the working groups, we direct our Vice Ministers to make an assessment of when and how to launch the FTAA negotiations and to make recommendations to us on these issues before the 1997 Trade Ministerial meeting. 5.We reiterate our commitment to actively continue seeking ways to provide opportunities to facilitate integration of the smaller economies and increase their level of development. We call upon all working groups in their deliberations to take into account this commitment as well as specific suggestions of the Working Group on Smaller Economies. Acknowledging the differences in levels of economic development among countries in the Hemisphere, we recognize the need for technical assistance in order to facilitate the full participation of the smaller economies in the entire process leading to the FTAA.

WORKING GROUPS:6.In light of the decisions taken at the Miami Summit and at the Denver Trade Ministerial meeting and in the process of continuing preparations for negotiations, we received the reports from the chairpersons of the seven working groups established in Denver as well as the working groups specific recommendations for subsequent action.On the basis of each group’s report, we are convinced that substantial progress on preparing for

negotiations has been achieved and that the initial work program is well underway. We take note of the work programs proposed by the seven existing working groups and direct them to carry out the tasks identified with a view to presenting conclusions and recommendations for our consideration in 1997. To facilitate achieving this objective, we ask that chairpersons of all working groups, in consultation with all participating countries, arrange to meet to coordinate the work so as to: avoid duplication of effort, while at the same time ensuring that there are no gaps in their preparatory work, as well as to ensure the most effective use of available resources, including those of the Tripartite Committee. In order to promote the participation of all countries in all aspects of the preparatory work, chairpersons of working groups should endeavor to coordinate the scheduling and venues of the meeting of the working groups, ensuring that best efforts be made to limit the dispersion of venues of the working groups. 7.We direct Vice-Ministers to direct, evaluate and coordinate the work of all working groups, so as to ensure significant progress in advance to our 1997 meeting. To this end, Vice-Ministers should meet on at least three occasions in advance of our next meeting. We ask the host of the 1997 Trade Ministerial Meeting to chair these meetings. 8.We thank the chairpersons for the work they have done during their tenure between the Denver Trade Ministerial and the Cartagena Trade Ministerial meetings. We also thank the countries for their collaboration in gathering information and their proposals for future work. 9.To comply with the commitments that we acquired in Denver, we are establishing additional working groups in the following areas: Government Procurements, Intellectual Property Rights, Services and Competition Policy. We are providing overall guidance, including individual terms of reference for each of these new groups (Annex I). At the same time, we agreed to establish a Working Group and the terms of reference for dispute settlement procedures at the Third Trade Ministerial Meeting. We request the OAS to start compiling information on the dispute settlement mechanisms being used in bilateral and subregional trade agreements in the Hemisphere. 10.We approved the list of countries that were nominated to chair the eleven working groups (Annex II). These countries are responsible until the next Trade Ministerial Meeting for coordinating the schedule of meetings, in consultation with representatives of member countries, and for ensuring that all terms of reference are achieved. 11.Each working group should identify and examine trade-related measures in its respective area, in order to determine possible approaches to negotiations. We direct each of the working groups to submit to Vice-ministers, for their approval, concrete proposals on areas for immediate attention in advance of the 1997 Trade Ministerial Meeting, within the agreed mandate. At the Third Trade Ministerial Meeting, we will receive reports and decide on subsequent steps to be taken in each area. Today we agree on the immediate actions in the areas listed in Annex III. 12.We recognize and appreciate the important analytical and technical work done by the Tripartite Committee in support of existing working groups as well as the contributions from other specialized regional, subregional and multilateral organizations. We ask that the Tripartite Committee continue to provide such analytical support, technical assistance and relevant studies, as may be requested by the working groups.In support of this work, we encourage further contributions, within their areas of expertise, from relevant regional and subregional institutions as may be requested by the working groups.OTHER REPORTS AND CONTRIBUTIONS TO ECONOMIC INTEGRATION.13.In accordance with the Summit of the Americas’ Plan of Action, we noted the significant developments that have been taking place in the various trade and investment fora in the Hemisphere. 14.The Chairman of the Special Committee on Trade (SCT), of the OAS reported on the progress achieved on the tasks assigned to the SCT by Leaders at the Miami Summit. We thanked the SCT for its preliminary version of the analytical Compendium of Trade and Integration Accords in the Hemisphere. This compendium will be regularly updated in order to ensure that it remains complete, accurate and up-to-date. We agree that the Compendium is an important instrument for the understanding and comparison of regional trade agreements and therefore urged the OAS to publish the Compendium once the final version has been approved.

We also thanked the IDB for its report to the SCT on "Rules of Origin in Preferential Trade Agreements in the Americas," which has been forwarded to the FTAA Working Group on Customs Procedures and Rules on Origin for their consideration. 15.We received with great interest the conclusions the business sector reached regarding the 13 topics developed at the Americas Business Forum. We recognize the importance of the role of the private sector and its participation in the FTAA process. We have also agreed on the importance of Governments consulting their private sectors in preparation for the Trade Ministerial Meeting to be held in 1997. We reaffirm our commitment to transparency in the FTAA process. We direct our Vice Ministers to consider appropriate processes to address the protection of the environment. After having received the report of the committee that will be presented a the WTO Ministerial Meeting in Singapore, we will consider creating a study group on this issue based upon recommendations from our Vice Ministers. To this end, we and our Vice Ministers will consider how to proceed in the construction of the FTAA in this area. We received with appreciation the Declaration of the Tenth Inter-American Conference of Ministers of Labor. We recognize the importance of the further observance and promotion of worker rights and the need to consider appropriate processes in this area, through our respective governments. We will keep this matter under consideration and have asked our Vice Ministers to keep us informed.OTHER MATTERS - FUTURE MINISTERIAL MEETINGS:16.In view of the mandate of our Heads of State and Government, and in accordance with the decision adopted at the Denver meeting, we agree to hold the Third Ministerial and the Business Forum Meetings in the second quarter of 1997. We accept, with appreciation, the invitation of the Government of Brazil to host these meetings. The Fourth Trade Ministerial and Business Forum meetings are to be held in 1998 in Costa Rica.ANNEX I - ACTION PLAN FOR NEW WORKING GROUPS: I.THE WORKING GROUP ON GOVERNMENT PROCUREMENT WILL:1.Collect, systematize and create an inventory of the legislation, regulations, and procedures in the countries of the Hemisphere regarding government procurement, starting at the central government level, including, among other, state-owned enterprises. On the basis of that inventory, undertake a study of barries to access to procurement by the public sector. 2.Create an inventory and analysis of regulations on government procurement included in integration schemes and other existing agreements to which countries in the Hemisphere are signatories. 3.Compile available data on purchases of goods and services by central governments, including, among others, state-owned enterprises, in the Hemisphere. 4.Identify areas of commonality and divergence among government procurement systems in countries of the Hemisphere. 5.Recommend methods to promote understanding of the WTO Government Procurement Agreement. 6.Recommend methods to promote transparency in government procurement. 7.Make specific recommendations on how to proceed in the construction of the FTAA in this area.II. THE WORKING GROUP ON INTELLECTUAL PROPERTY RIGHTS WILL:1.Create an inventory of the intellectual property agreements, treaties and arrangements that exist in the Hemisphere, including all international conventions to which countries are parties. 2.Compile, in the most efficient manner, an inventory of intellectual property protection laws, regulations and enforcement measures in the Hemisphere and, on the basis of this information, identify areas of commonality and divergence. 3.Recommend methods to promote the understanding and effective implementation of the WTO Agreement on Trade-Related Aspects of intellectual Property Rights (TRIPs). 4.Identify possible areas for technical assistance, which countries may request, involving both the administration and enforcement of intellectual property rights. 5.Analyze the implications of emerging technologies for intellectual property rights protection in the FTAA. 6.Make specific recommendations on how to proceed in the construction of the FTAA in this area.III. THE WORKING GROUP ON TRADE ON SERVICES WILL: 1.Undertake conceptual background work on the nature of trade in services, including the relationship to other working groups, including investment. 2.Compile a comprehensive inventory of agreements accords and other arrangements covering trade services in the Hemisphere and determine areas of commonality and divergence. 3.Create a comprehensive inventory of measures affecting trade in services within the Hemisphere and identify steps to enhance transparency and facilitate trade. 4.Create a statistical database of trade flows in services in the Hemisphere. 5.Recommend methods to promote undebrstanding and effective implementation of the WTO General Agreement on Trade in Services (GATS), including technical assistance.6.Make specific recommendations on how to proceed in the construction of the FTAA in this area.IV. THE WORKING GROUP ON COMPETITION POLICY WILL: 1.Promote understanding of the objectives and operation of competition policy. 2.Compile an inventory of domestic laws and regulations that exist in the Hemisphere that deal with anti-competition conduct and, on the basis of that information, identify areas of commonality and divergence. 3.Create an inventory of the competition policy agreements, treaties and arrangements existing in the Hemisphere. 4.Identify cooperation mechanisms among governments in the Hemisphere aiming at ensuring the effective implementation of competition policy laws. 5.Recommend ways to assist members to establish or improve their domestic competition policy regimes, as they may request. 6.Exchange views on the application and operation of competition policy regimes in the countries of the Hemisphere and their relationship to trade in a free trade area. 7.Make specific recommendations on how to proceed in the construction of the FTAA in this area.ANNEX II - CHAIRPERSONS OF THE WORKING GROUPS. We have agreed that the following countries will assume the chairs of each of the respective working groups until the next Trade Ministerial Meeting.

ANNEX III - PROGRESS REPORTS FROM THE WORKING GROUPS CREATED IN DENVER AND RECOMMENDATIONS FOR FUTURE WORK:In addition to the guidance provided elsewhere in this document, we request that the relevant working groups implement the following areas for immediate action:

Keep data bases current; make them public, once its contents have been approved by

Develop and improve the complete inventory of customs procedures in the hemisphere and

publish the Customs Procedures Manual for its use by the private sector. Make recommendations

Publish a guidebook on investment regimes in the Hemisphere; Promote accession to existing

arbitral conventions; Publish the inventory of investment agreement and treaties in the region.

Develop proposals on mutual accreditation of testing facilities; Prepare an inventory of standards

Release the compendium of the Hemispheric trade laws and procedures being compiled by the

Develop proposals on ways to promote the recognition of sanitary and phytosanitary certificates

Make recommendations on measures, including technical assistance, to facilitate the integration of

PROPOSALS FOR EXPANDING TERMS OF REFERENCE WORKING GROUP ON SUBSIDIES, ANTIDUMPING AND COUNTERVAILING DUTIES. We take note of the "Report and Recommendations of the Working Group on Subsidies, Antidumping, and countervailing Duties", and urge the Working Group to identify other practices that can be shown to have trade distorting effects on agricultural trade in or with the hemisphere, with an aim to make specific recommendations on the subject.

(11) SUMMIT OF THE AMERICAS FOURTH TRADE MINISTERIAL.SAN JOSE, COSTA RICA MARCH 19th, 1998. JOINT DECLARATION. INTRODUCTION. 1.We, the Ministers Responsible for Trade, representing the 34 countries which participated in the Summit of the Americas, in Miami, in December 1994, met at the IV Ministerial Meeting on Trade in San José, Costa Rica to review the results of the preparatory work for the negotiations of the Free Trade Area of the Americas (FTAA) with the intent to recommend to our Heads of State and Government the initiation of the negotiations. 2.We note the progress achieved in trade liberalization in this Hemisphere since the Miami Summit of the Americas as a result of the implementation of the obligations assumed by our Governments in the context of the Uruguay Round of Multilateral Trade Negotiations and of the World Trade Organization (WTO); the widening and deepening of existing sub-regional and bilateral integration and free trade agreements; the signing of new agreements; and the unilateral trade liberalization measures adopted by some countries. Even as countries in our region have been tested by financial and other economic pressures, the overall course in the Americas has been one of faster economic growth, lower inflation, expanded opportunities, and confidence in participating in the global marketplace. A major reason for this positive record has been our countries’ steadfast and cooperative efforts to promote prosperity through increased economic integration and more open economies. We are confident, therefore, that the FTAA will improve the well being of all our people. 3.With the intent of contributing to the expansion of world trade, we reaffirm our commitment that the FTAA shall not raise additional barriers to other countries, and we will continue to avoid to the greatest extent possible the adoption of policies that adversely affect trade in the hemisphere. 4.Furthermore, we reiterate that the negotiation of the FTAA shall take into account the broad social and economic agenda contained in the Miami Declaration of Principles and Plan of Action with a view to contributing to raising living standards, to improving the working conditions of all people in the Americas and to better protecting the environment. 5.In designing the FTAA we shall take into account differences in the levels of development and size of the economies in our Hemisphere, to create opportunities for the full participation of the smaller economies and to increase their level of development. 6.We recognize the wide differences in the level of development and size of economies existing in our Hemisphere and we will remain cognizant of these differences as we work to ensure their full participation in the construction of the FTAA. 7.We reviewed and approved the work submitted to us by the Preparatory Committee of Vice-Ministers on how to proceed with the negotiations of the FTAA. Initiation of the Negotiations. 8.We recommend to our Heads of State and Government that they initiate negotiation of the FTAA during the II Summit of the Americas, which will be held in Santiago, Chile, on April 18 and 19, 1998, in accordance with the objectives, principles, structure, venue and other decisions set forth in this Declaration. 9.We reaffirm the principles and objectives that have guided our work since Miami, as set out in Annex I, including inter alia that the agreement will be balanced, comprehensive, WTO-consistent, and will constitute a single undertaking. It will take into account the needs, economic conditions and opportunities of the smaller economies. The negotiations will be transparent and built on consensus decision making. The FTAA can co-exist with bilateral and sub-regional agreements, to the extent that the rights and obligations under these agreements are not covered or go beyond the rights and obligations of the FTAA. We remain committed to concluding the negotiations no later than 2005 and to achieving concrete progress toward the attainment of this objective by the end of the century. Structure and Organization of the Negotiations. 10.We have agreed to an initial structure for the negotiations. This structure is flexible and we expect to modify it over time as required to assist the negotiations. We will exercise the ultimate oversight and management of the negotiations and therefore we will meet as required and no less than every 18 months. We establish the Trade Negotiations Committee (TNC) at the Vice-ministerial level.The TNC will have a Chairman and a Vice-Chairman. The TNC will select the Chairman and Vice Chairman of each negotiating group. The TNC will have the responsibility of guiding the work of the negotiating groups and of deciding on the overall architecture of the agreement and institutional issues. The TNC is to take the overall responsibility of ensuring the full participation of all the countries in the FTAA process. It will also ensure that this issue, in particular the concerns of the smaller economies and concerns related to countries with different levels of development will be dealt with within each negotiating group. The TNC should meet as required and no less than twice a year. It should hold its first meeting no later than the 30th of June, 1998. 11.We establish 9 negotiating groups on : market access; investment; services; government procurement; dispute settlement; agriculture; intellectual property rights; subsidies, antidumping and countervailing duties; and competition policy. The Chairman and Vice-Chairman of each group will be selected taking into account the need to maintain geographic balance among countries. They will serve for a period of 18 months or until the subsequent ministerial meeting. As a general principle, there should not be immediate reelection of the Chair and Vice-chair. This principle establishes a presumption against immediate reelection, but should not be inflexibly applied. The negotiating groups will be guided in their work by the general principles and objectives in Annex I as well as specific objectives in Annex II. We mandate the TNC in its first meeting to develop a work program for the negotiating groups in order to ensure that they begin their work no later than the 30th of September, 1998. We have agreed that the meetings of the negotiating groups will be held in a single venue which will rotate among the following three countries: Miami, USA – From may 1, 1998 to february 28, 2001; Panama City, Panama – From march 1, 2001 to february 29, 2003 and Mexico DF, Mexico – From march 1, 2003 to december 31, 2004.12.The period for which Mexico hosts the venue of the negotiations will be up to the conclusion of the negotiations.The countries that will have the Chair and Vice-Chair of the negotiating groups for the first 18 month period will be the following:

13.Work in different groups may be interrelated, such as agriculture and market access; services and investment; competition policy and subsidies, antidumping and countervailing duties; among others. The TNC shall identify linkages and outline appropriate procedures to ensure timely and effective coordination. We agree to give the mandate to the relevant negotiating groups to study issues relating to: the interaction between trade and competition policy, including antidumping measures; market access and agriculture, in order to identify any areas that may merit further consideration by us. The groups involved will report their results to the TNC no later than December 2000. This is without prejudice to decisions made by the TNC to dissolve, establish or merge groups. Likewise, the negotiating groups may establish ad-hoc working groups.Chairmanship of the FTAA. 14.The Chairmanship of the FTAA process will rotate among different countries at the end of each Ministerial Meeting.The country that will chair the FTAA process will host the Ministerial Meetings and will also chair the TNC. The period in which the United States of America and Brazil exercise the Co-chairmanship will be until the conclusion of the negotiations. In the last period, from November 1st, 2002 to December 31st, 2004, there will be at least two Meetings of Ministers Responsible for Trade, one in each Co-chair country. In the first 18 month period, three meetings of the TNC will be held, one in each of the following countries: Argentina, Suriname and Bolivia. In the second 18 month period, from November 1, 1999 to April 30, 2001, the first meeting will be held in Guatemala will hold the first meeting of the TNC.Consultative Group on Smaller Economies. 15.We have agreed to establish a Consultative Group on Smaller Economies, open to the participation of all the FTAA countries, and reporting to the TNC. For the first period, the Chair will be Jamaica with Guatemala serving as Vice-chair. Succession criteria will be the same as those applying to the negotiating groups. The Consultative Group will have the following functions: follow the FTAA process, keeping under review the concerns and interests of the smaller economies; and will bring to the attention of the TNC the issues of concern to the smaller economies and make recommendations to address these issues.Administrative Secretariat for the Negotiations.16.We have agreed to create an Administrative Secretariat for the negotiations, which will conclude no later than the year 2005. It will report to the TNC and will: provide logistical and administrative support to the negotiations; provide translation services for documents and interpretation during the deliberations; keep the official documents of the negotiation; and publish and distribute documents. This Administrative Secretariat will be located at .the same venue as the meetings of the negotiating groups. It should be funded from local resources and existing resources of the Tripartite Committee Institutions. We recommend our Governments to instruct their representatives in the institutions of the Tripartite Committee –in particular the Inter American Development Bank- to allocate appropriate existing resources within their institutions to support the Administrative Secretariat.The TNC will determine the size and composition of the staff and will appoint the Head of the Secretariat.Tripartite Committee 17.We express our appreciation to the Tripartite Committee for the technical and logistical support given during the preparatory phase of the FTAA negotiation. We request that the respective institutions of the Tripartite Committee continue to provide the appropriate existing resources necessary to respond positively to requests for technical support from FTAA entities, including reallocation for this purpose if necessary. Furthermore, we ask the three institutions to provide technical assistance related to FTAA issues to member countries, particularly smaller economies, at their request, according to the procedures of the respective institutions. 18.We also express our appreciation and reiterate our interest, that the pertinent multilateral, regional and sub-regional institutions continue to offer, in their areas of recognized specialization, additional contributions in response to specific requests from the TNC and the negotiation groups.Other Issues - Participation of Civil Society: 19.We reaffirm our commitment to the principle of transparency of the negotiation process, to facilitate the constructive participation of the different sectors of society. We also reaffirm our commitment to the Belo Horizonte Ministerial Declaration and to paragraph 4 of the Singapore Ministerial Declaration of the WTO. 20.We recognize and welcome the interests and concerns that different sectors of society have expressed in relation to the FTAA. Business and other sectors of production, labor, environmental and academic groups have been particularly active in this matter. We encourage these and other sectors of civil societies to present their views on trade matters in a constructive manner. We have, therefore, established a committee of government representatives, open to all member countries, who shall select a chair. The committee shall receive these inputs, analyze them and present the range of views for our consideration. In this regard, we value the contributions made by the business sector through the Business Fora of the Americas of Denver, Cartagena, Belo Horizonte and San José. Concrete progress by the year 2000. 21.We reaffirm our commitment to make concrete progress by the year 2000. We direct the negotiating groups to achieve considerable progress by that year. We instruct the TNC to agree on specific business facilitation measures to be adopted before the end of the century, taking into account the substantive work that has already emanated from the FTAA process.Electronic Commerce. 22.We noted the rapid expansion of Internet usage and electronic commerce in our Hemisphere. In order to increase and broaden the benefits to be derived from the electronic marketplace, we welcome the offer of Caricom to lead a joint government-private sector committee of experts that will make recommendations to us at our next meeting.Acknowledgement. We wish to express our gratitude to the Government of Costa Rica for its notable contribution to the advance of the FTAA process during the last year, by presiding over the deliberations of the Preparatory Committee of the Negotiations, as well as the IV Meeting of the Ministers Responsible for Trade in the Hemisphere, which concluded the preparations to initiate the FTAA negotiations. Annex I - General Principles and Objectives: The negotiations for the construction of the FTAA will be guided by the following General Principles and Objectives. General Principles. Decisions in the FTAA negotiating process will be made by consensus. Negotiations will be conducted in a transparent manner to ensure mutual advantage and increased benefits to all participants of the FTAA. The FTAA Agreement will be consistent with the rules and disciplines of the WTO. With this purpose, the participating countries reiterate their commitment to multilateral rules and disciplines, in particular Article XXIV of the General Agreement on Tariffs and Trade (GATT) 1994 and its Uruguay Round Understanding, and Article V of the General Agreement on Trade in Services (GATS). The FTAA should improve upon WTO rules and disciplines wherever possible and appropriate, taking into account the full implications of the rights and obligations of countries as members of the WTO. The negotiations will begin simultaneously in all issue areas. The initiation, conduct and outcome of the negotiations of the FTAA shall be treated as parts of a single undertaking which will embody the rights and obligations as mutually agreed upon. The FTAA can co-exist with bilateral and sub-regional agreements, to the extent that the rights and obligations under these agreements are not covered by or go beyond the rights and obligations of the FTAA. Countries may negotiate and accept the obligations of the FTAA individually or as members of a sub-regional integration group negotiating as a unit. Special attention should be given to the needs, economic conditions (including transition costs and possible internal dislocations) and opportunities of smaller economies, to ensure their full participation in the FTAA process. The rights and obligations of the FTAA will be shared by all countries. In the negotiation of the various thematic areas, measures such as technical assistance in specific areas and longer periods for implementing the obligations

could be included on a case by case basis, in order to facilitate the adjustment of smaller economies and the full participation of all countries in the FTAA. The measures agreed upon to facilitate the integration of smaller economies in the FTAA process shall be transparent, simple and easily applicable, recognizing the degree of heterogeneity among them. All countries shall ensure that their laws, regulations and administrative procedures conform to their obligations under the FTAA agreement. In order to ensure the full participation of all countries in the FTAA, the differences in their level of development should be taken into account.General Objectives.To promote prosperity through increased economic integration and free trade among the countries of our Hemisphere, which are key factors for raising standards of living, improving the working conditions of people in the Americas and better protecting the environment. To establish a Free Trade Area, in which barriers to trade in goods and services and investment will be progressively eliminated, concluding negotiations no later than 2005 and achieving concrete progress toward the attainment of this objective by the end of this century. To maximize market openness through high levels of disciplines through a balanced and comprehensive agreement. To provide opportunities to facilitate the integration of the smaller economies in the FTAA process in order to realize their opportunities and increase their level of development. To strive to make our trade liberalization and environmental policies mutually supportive, taking into account work undertaken by the WTO and other international organizations. To further secure, in accordance with our respective laws and regulations, the observance and promotion of worker rights, renewing our commitment to the observance of internationally recognized core labor standards and acknowledging that the International Labor organization is the competent body to set and deal with those core labor standards. Annex II- Objective by Issue Area. We have agreed that the negotiations for the construction of the FTAA,

in the different issue area, will be guided by the following objectives:Market Access. Consistent with the provisions of the WTO, including article XXIV of the General Agreement on Tariffs and Trade (GATT 1994) and its Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade 1994, to

progressively eliminate, tariffs, and non tariff barriers, as well as other measures with equivalent effects, which restrict trade between participating countries. All tariffs will be subject to negotiation. Different trade liberalization timetables may be negotiated. To facilitate the integration of smaller economies and their full participation in the FTAA negotiations.Agriculture. The objectives of the negotiating group on Market Access shall apply to trade in agricultural products. Rules of origin, customs procedures and Technical Barriers to Trade issues will be addressed in the Market Access negotiating group. To ensure that sanitary and phytosanitary measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries or a disguised restriction to international trade, in order to prevent protectionist trade practices and facilitate trade in the hemisphere. Consistent with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), said measures will only be applied to achieve the appropriate level of protection for human, animal or plant life or health, will be based on scientific principles, and will not be maintained without sufficient scientific evidence. Negotiations in this area involve identifying and developing measures needed to facilitate trade, following and examining in depth the provisions set down in the WTO/SPS Agreement. To eliminate agricultural export subsidies affecting trade in the Hemisphere. To identify other trade-distorting practices for agricultural products, including those that have an effect equivalent to agriculture export subsidies, and bring them under greater discipline. Agricultural products covered are the goods referred to in Annex I of the WTO Agriculture Agreement. Incorporate progress made in the multilateral negotiations on agriculture to be held according to Article 20 of the Agreement on Agriculture, as well as the results of the review of the SPS Agreement.Rules of Origin. To develop an efficient and transparent system of rules of origin, including nomenclature and certificates of origin, in order to facilitate the exchange of goods, without creating unnecessary obstacles to trade.

Customs Procedures.To simplify customs procedures, in order to facilitate trade and reduce administrative costs. To create and implement mechanisms to exchange information in customs issues among FTAA countries. To design effective systems to detect and combat fraud and other illicit customs activities, without creating unnecessary obstacles to foreign trade. To promote customs mechanisms and measures that ensure operations be conducted with transparency, efficiency, integrity and responsibility. Investment.To establish a fair and transparent legal framework to promotes investment through the creation of a stable and predictable environment that protects the investor, his investment and related flows, without creating obstacles to investments from outside the hemisphere.Standards and Technical Barriers to Trade. To eliminate and prevent unnecessary technical barriers to trade in the FTAA, based on the proposals contained in the Common Objectives

Paper approved by the Working Group.Subsidies, Antidumping and Countervailing Duties. To examine ways to deepen, if appropriate, existing disciplines provided in the WTO Agreement on Subsidies and Countervailing Measures and enhance compliance with the terms of the WTO Agreement on Subsidies and Countervailing Measures. To achieve a common understanding with a view to improving, where possible, the rules and procedures regarding the operation and application of trade remedy laws in order to not create unjustified barriers to trade in the Hemisphere.Government Procurement. The broad objective of negotiations in government procurement is to expand access to the government procurement markets of the FTAA countries. More specifically, the objectives are: To achieve a normative framework that ensures openness and transparency of government procurement processes, without necessarily implying the establishment of identical government procurement systems in all countries; To ensure non-discrimination in government procurement within a scope to be negotiated; To ensure impartial and fair review for the resolution of procurement complaints and appeals by suppliers and the effective implementation of such resolutions.Intellectual Property Rights.To reduce distortions in trade in the Hemisphere and promote and ensure adequate and effective protection to intellectual property rights. Changes in technology must be considered.Services. Establish disciplines to progressively liberalize trade in services, so as to permit the achievement of a hemispheric free trade area under conditions of certainty and transparency; Ensure the integration of smaller economies into the FTAA process.Competition Policy.The objectives of the negotiations are: General Objectives: To guarantee that the benefits of the FTAA liberalization process not be undermined by anti-competitive business practices. Specific Objectives: i)To advance towards the establishment of juridical and institutional coverage at the national, sub-regional or regional level, that proscribes the carrying out of anti-competitive business practices; i)To develop mechanisms that facilitate and promote the development of competition policy and guarantee the enforcement of regulations on free competition among and within countries of the Hemisphere. Dispute Settlement. To establish a fair, transparent and effective mechanism for dispute settlement among FTAA countries, taking into account inter alia the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes. To design ways to facilitate and promote the use of arbitration and other alternative dispute settlement mechanisms, to solve private trade controversies in the framework of the FTAA. Work in different groups may be interrelated, such as agriculture and market access; services and investment; competition policy and subsidies, antidumping and countervailing duties; among others. The TNC shall identify linkages and outline appropriate procedures to ensure timely and effective coordination. We agree to give the mandate to the relevant negotiating groups to study issues relating to: the interaction between trade and competition policy, including antidumping measures; market access and agriculture, in order to identify any areas that may merit further consideration by us. The groups involved will report their results to the TNC no later than December 2000. This is without prejudice to decisions made by the TNC to dissolve, establish or merge groups. Likewise, the negotiating groups may establish ad-hoc working groups.

(12) GUILHON DE ALBUQUERQUE, José Augusto. The Southern Americas presented at the South American Seminar, promoted by ACS/MRE Secretariat of Social Communication, Itamaraty; CNPq National Council on Scientific and Technologic Development and FINEP – Funding for studies and projects, Rio de Janeiro-RJ, august, 15, 1997.

(14) GUILHON DE ALBUQUERQUE, José Augusto. 1997, Incentivos e Obstáculos à Integração Continental presented at the seminar "ALCA and the Future of US/Brazilian Trade Relations", in the working group "ALCA on the World Stage", promoted by the Fundação Getúlio Vargas, Rio de Janeiro, August, 1997.

ABREU, Sérgio Abreu e FLORÊNCIO, Lima. Área Hemisférica de Livre Comércio: dados para uma reflexão. Boletim de Integração Latino-Americana, n° 5, publicado pelo Ministério das Relações Exteriores.

ALADI. Evaluación del impacto comercial del Tratado de Libre Comercio de America del Norte (Análisis preliminar). 1993.

BANCO MUNDIAL. Global Economic Prospects and the Developing Countries. Washington, 1992.

BARBOSA, Rubens Antônio. Integração Hemisférica. Palestra em Seminário promovido pela Fundação Getúlio Vargas/RJ em 21 de agosto de 1992.

CARDOSO, Fernando Henrique. O Brasil e Clinton in Zero Hora, 28 de fevereiro de 1993, página 4.

COMUNICADO DOS PRESIDENTES DO MERCOSUL in Boletim de Integração Latino-Americana, MRE, n° 8, janeiro-março de 1993.

CORREIA, Victor S. Antunes. Análise jurídico-política do Mercosul, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 11o v., 1997.

DE LA TORRE, Augusto e KELLY, Margaret R. Regional Trade Arrangements. Fundo Monetário Internacional, occasional paper nº 93, março de 1992.

FARIA, Werter R. Defesa da Concorrência no Mercosul, Brasília: Senado Federal, Subsecretaria de Edições Técnicas, 1o volume, 1992.

______________. Disciplina da concorrência e controle das concentrações de empresas no Mercosul, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 5o volume, 1993.

GOVERNOS DOS EUA, CANADÁ E MÉXICO. Description of the proposed North American Free Trade Agreement, agosto de 1992.

HUFBAUER, Gary Clyde e SCHOTT, Jeffrey. NAFTA: a brief assessment. Washington, Institute for International Economics, 1993.

MELTON, Richard (Embaixador dos EUA em Brasília). NAFTA: uma contribuição para um sistema global de comércio mais aberto in O Estado de São Paulo de 01/09/1992.

OLIVAR JIMENEZ, Martha Lucia. A defesa contra as práticas desleais na Europa, um exemplo a seguir?, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 2o volume, 1992.

______________; CALEFFI, Vanessa e BENJAMIN, Daniela. O regime comum de origem no Mercosul, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 3o volume, 1993.

PEREIRA, Luiz Carlos Bresser e THORSTENSEN, Vera. From MERCOSUL to the American Integration, texto apresentado em seminário realizado em Washington em setembro de 1992.

PUCCI, Adriana Noemi. A arbitragem nos países do Mercosul, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 10o volume, 1996.

RESENDE, Luís Fernando de Lara. Reshaping the U.S. foreign policy in the 90s: a view from the periphery, IPEA, texto para discussão nº 275.

SABORIO, Sylvia (organizadora). The premise and the promise: free trade in Americas. Overseas Development Council, Washington, 1992. Os textos mais utilizados foram os de Salazar Xirinachs/Lizano, Erzan/Yeats e Bouzas.

U.S. DEPARTMENT OF COMMERCE. Business America, v. 113, n° 21, 19 de outubro de 1992

VAZ, Alcides Costa.O componente comercial da Iniciativa para as Américas sob a perspectiva latino-americana in Boletim de Integração Latino-Americana nº 07, publicado pelo Ministério das Relações Exteriores.

VIGNALI, Heber Arbuet. O atributo da soberania, Brasília: Senado Federal, Subsecretaria de Edições Técnicas; Porto Alegre: Associação Brasileira de Estudos da Integração, 9o volume, 1995.