Free Area Trade of the Americas

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Free Area Trade of the Americas

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of initiation of Free Trade of the Americas (FTAA)

negotiations; request for pubic comment on initial U.S. objectives for

the nine negotiating groups.

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SUMMARY: The Trade Staff Committee (TPSC) is providing notice of the

United States' participation in trade negotiations with the 33

countries in the Western Hemisphere participating in the Summit of the

Americas \1\ and of the

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principles and objectives for the negotiations to which the 34

countries have agreed. The TPSC invites public comment on initial U.S.

objectives for each of the nine FTAA negotiating groups.

\1\ Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize,

Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica,

Dominican Republic, Ecuador, El Salador, Grenada, Guatemala, Guyana,

Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru,

St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines,

Suriname, Trinidad and Tobago, Uruguay, United States, and

Venezuela.

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FOR FURTHER INFORMATION CONTACT:

For procedural questions concerning public comments contact Gloria

Blue, Executive Secretary, Trade Policy Staff Committee, Office of the

United States Trade Representative, (202) 395-3475. All questions

concerning the negotiations should be directed to Karen M. Lezny,

Director for the Free Trade Area of the Americas, Office of the Western

Hemisphere, Office of the United States Trade Representative, (202)

395-5190.

SUPPLEMENTARY INFORMATION: On December 11, 1994, President Clinton and

the 33 other democratically-elected leaders in the Western Hemisphere

met in Miami, Florida for the first Summit of the Americas. They agreed

to conclude negotiations on a Free Trade Area of the Americas (FTAA) by

the year 2005, and to achieve concrete progress toward that objective

by the end of the century. The 34 leaders agreed to negotiate a

balanced and comprehensive agreement covering the following areas,

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. The 34 Western Hemisphere ministers

responsible for grade met four times; in June 1995 in Denver, Colorado;

in March 1996 in Cartagena, Colombia; in May 1997 in Belo Horizonte,

Brazil; and, in March 1998 in San Jose, Costa Rica, in order to prepare

for the negotiation of the FTAA Agreement. The trade ministers created

11 working groups that collected and analyzed information on existing

trade-related measures in each area to assist them in their

preparations.

At the San Jose meeting in March 1998, the trade ministers

recommended that the Western Hemisphere leaders initiate the

negotiations and provided them recommendations on the structure,

objectives, principles, and venues of the negotiations. The trade

ministers reaffirmed the principles and objectives that have guided

work on the FTAA since Miami, including that the agreement will be

balanced, comprehensive, and WTO-consistent. They also reaffirmed that

the agreement will constitute a single undertaking; will take into

account the needs, economic conditions and opportunities of the smaller

economies; and, will not raise additional barriers to the trade of

other countries. The ministers pledged to continue to avoid to the

greatest extent possible the adoption of policies that adversely affect

trade in the hemisphere. They also reiterated that the negotiation of

the FTAA will 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.

On April 18-19, 1998, President Clinton and his 33 counterparts in

the Western Hemisphere initiated the Free Trade Area of the Americas

negotiations at the Summit of the Americas meeting in Santiago, Chile.

The leaders agreed to the general framework proposed by the 34 trade

ministers, which include the establishment initially of nine

negotiating groups to be guided by general principles and objectives

and specified objectives as agreed by the ministers in March 1998. The

leaders also agreed to the establishment of a Trade Negotiation

Committee (TNC) composed of the 34 vice ministers responsible for trade

to oversee the negotiation. The TNC held its first meeting on June 17-

19 in Buenos Aires. Three other entities also were established: a

Committee of Government Representatives on Civil Society, a joint

public-private sector Experts Committee on Electronic Commerce, and a

Consultative Group on Smaller Economies.

The nine negotiating groups are for: Market Access,\2\ Agriculture;

Investment; Services; Government Procurement; Dispute Settlement;

Intellectual Property Rights; Subsidies, Antidumping and Countervailing

Duties; and Competition Policy. They will begin their work no later

than September 30, 1998 and will meet in Miami, Florida. The

negotiating groups will be guided in their work by the general

principles and objectives as well as the specific objectives agreed by

the ministers, as set out in Annex I and Annex II of the San Jose

Declaration, reproduced below.

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\2\ The market access negotiating group will cover tariffs, non-

tariff measures, standards and technical barriers to trade (for both

agricultural and industrial products), customs procedures (for both

agricultural and industrial products), rules of origin (for both

agricultural and industrial products), and safeguards (for both

agricultural and industrial products). The agriculture negotiating

group will cover tariff, non-tariff measures, sanitary and

phytosanitary measure (for both agricultural and industrial

products), and export subsidies and other trade-distorting practices

affecting agricultural products in the Hemisphere.

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The establishment of nine negotiating groups is an initial

structure for the negotiations. This structure is flexible and is

expected to be modified over time as required to assist the

negotiations.

Since the Santiago Summit, USTR has held informal consultations

with various sectors of civil society, including consumer, labor,

business and environmental interests, which have expressed views and an

interest in commenting on U.S. positions and objectives for the nine

negotiating groups.

Public Comments

To prepare for the initial meetings of the nine negotiating groups

starting in September 1998, the TPSC invites written comment on what

should be the U.S. positions and objectives with respect to each of the

negotiating groups. U.S. negotiators seek input beyond the general

principles and objectives and specific objectives agreed to in San Jose

by the United States as one of the 34-countries.

USTR will seek additional public comment separately on other issues

related to the FTAA, including the Committee of Government

Representatives on Civil Society and concerning the economic effects of

the removal of duties and nontariff barriers to trade among FTAA

participating countries.

Those persons wishing to submit written comments should provide

twenty (20) typed copies (in English) no later than Wednesday, July 29,

1998, to Gloria Blue, Executive Secretary, Trade Policy Staff

Committee, Office of the U.S. Trade Representative, Room 501, 600 17th

Street, NW, Washington, D.C., 20508. Comments should state clearly the

position taken and should describe the specific information supporting

that position.

If the submission contains business confidential information,

twenty copies of a non-confidential version must also be submitted. A

justification as to why the information contained in the submission

should be treated confidentially must be included in the submission. In

addition, any submissions containing business confidential information

must be clearly marked ``Confidential'' at the top and bottom of the

cover page (or letter) and of each succeeding page of the

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submission. The version that does not contain confidential information

should also be clearly marked, at the top and bottom of each page,

``public version'' or ``non-confidential.''

Written comments submitted in connection with this request, except

for information granted ``business confidential'' status pursuant to 15

CFR 2003.6, will be available for public inspection in the USTR Reading

Room, Room 101, Office of the United States Trade Representative, 600

17th. St., N.W., Washington, D.C. An appointment to review the file may

be made by calling Brenda Webb (202) 395-6186. The Reading Room is open

to the public from 9:30 a.m. to 12 noon, and from 1 p.m. to 4 p.m.

Monday through Friday.

Frederick L. Montgomery,

Chairman, Trade Policy Staff Committee.

San Jose Declaration

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

(a) Decisions in the FTAA negotiating process will be made by

consensus.

(b) Negotiations will be conducted in a transparent manner to

ensure mutual advantage and increased benefits to all participants

of the FTAA.

(c) 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).

(d) 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.

(e) 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.

(f) 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.

(g) Countries may negotiate and accept the obligations of the

FTAA individually or as members of a sub-regional integration group

negotiating as a unit.

(h) 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.

(i) 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.

(j) 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.

(k) All countries shall ensure that their laws, regulations and

administrative procedures conform to their obligations under the

FTAA agreement.

(l) 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

(a) 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.

(b) 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.

(c) To maximize market openness through high levels of

disciplines through a balanced and comprehensive agreement.

(d) 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.

(e) To strive to make our trade liberalization and environmental

policies mutually supportive, taking into account work undertaken by

the WTO and other international organizations.

(f) 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--Objectives 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

(a) 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.

(b) All tariffs will be subject to negotiation.

(c) Different trade liberalization timetables may be negotiated.

(d) To facilitate the integration of smaller economies and their

full participation in the FTAA negotiations.

Agriculture

(a) 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.

(b) 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.

(c) To eliminate agricultural export subsidies affecting trade

in the Hemisphere.

(d) 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.

(e) Agricultural products covered are the goods referred to in

Annex I of the WTO Agriculture Agreement.

(f) 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

(a) 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

(a) To simplify customs procedures, in order to facilitate trade

and reduce administrative costs.

(b) To create and implement mechanisms to exchange information

in customs issues among FTAA countries.

(c) To design effective systems to detect and combat fraud and

other illicit customs activities, without creating unnecessary

obstacles to foreign trade.

(d) To promote customs mechanisms and measures that ensure

operations be conducted with transparency, efficiency, integrity and

responsibility.

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Investment

(a) To establish a fair and transparent legal framework to

promote 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

(a) 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

(a) 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.

(b) 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

(a) 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:

(a) 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;

(b) To ensure non-discrimination in government procurement

within a scope to be negotiated;

(c) 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

(a) 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

(a) 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;

(b) Ensure the integration of smaller economies into the FTAA

process.

Competition Policy

The objectives of the negotiations are:

(a) General Objectives:

To guarantee that the benefits of the FTAA

liberalization process not be undermined by anti-competitive

business practices.

(b) Specific Objectives:

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;

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

(a) 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.

(b) 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.

[FR Doc. 98-17723 Filed 7-2-98; 8:45 am]

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