W The Obama administration, which is negotiating separate free trade deals with Asian and European countries, is “exploring” a regional trade plan for the Americas that would be the most ambitious hemispheric initiative in years.
U.S. Secretary of State John Kerry said in an interview that he would like to first seek an agreement to deepen the existing North American Free Trade Agreement (NAFTA) with Mexico and Canada, and to expand it afterward to the rest of Latin America.
“It’s something I actually have asked some folks here to explore, and I’ve had conversations with a couple of people outside of here who were very knowledgeable about hemispheric relationships,” Kerry said. “And they’re very encouraging about it, so we’re going to try to do our due diligence on this, and I’m really hopeful.”
NAFTA will turn 20 years old in 2014, and has lost much of its earlier impetus in recent years. U.S. officials say next year’s anniversary will be a golden opportunity to re-launch it.
In the rare interview on Latin American affairs that he gave me for the Miami Herald and “Oppenheimer Presenta” on CNN en Español last week, Kerry suggested that the idea of strengthening NAFTA is more than a theoretical aspiration. He said he has been discussing it with former U.S. ambassadors and trade representatives, and that he plans to put it on the table.
The United States, Mexico and Canada would be “the major block of it, reaching out to the rest of Central America, the Caribbean, Latin America,” Kerry said. He added that the plan would be to start in North America, because several South American nations are not yet willing to forge closer commercial ties with the United States.
“We ought to be able to forge an even stronger set of partnerships,” he said, referring to his plan to strengthen NAFTA. “We will push forward with it.”
Asked when he would do that, Kerry noted that he has only been on the job for eight months, and that he has another three years ahead of him. “We’re not finished, unless I screw up,” he said, laughing.
Top aides to Kerry say the plan to relaunch NAFTA could come as early as February, when President Barack Obama is scheduled to meet with his Mexican and Canadian counterparts at a North American Leaders’ Summit in Mexico. That summit is supposed to be a regular annual meeting, but it did not take place this year.
The United States has not proposed a new trade bloc in the Americas since negotiations for the Free Trade Area of the Americas collapsed in 2005, when Brazil, Argentina and Venezuela effectively killed the idea at a summit in Mar del Plata, Argentina, attended by then President George W. Bush.
Since then, the United States has signed separate trade deals with Peru, Colombia and Panama, but has not tried to resurrect plans for a regional free trade deal in the Western Hemisphere.
Instead, the Obama administration has launched a Trans-Pacific Partnership (TPP) negotiation with 11 Pacific rim countries — mostly Asian countries such as Japan and Malaysia, but also including some Latin American Pacific Coast countries, such as Mexico — and a separate Transatlantic Trade and Investment Partnership (TTIP) with 28 European Union nations.
If Washington signs the proposed trans-Pacific and trans-Atlantic trade agreements, several major Latin American countries not included in the TPP — such as Brazil, Argentina and Venezuela — would be left outside the two biggest global trading blocs.
Kerry’s remarks about his intentions to explore a relaunching of NAFTA came in the context of a question of why the Obama administration has been the first one in many years that has not proposed a hemispheric trade agreement, and why he has personally spent so little time in Latin America.
Since Kerry’s appointment as secretary of state in February, he has made 20 foreign trips, but only two to Latin America. He has visited 36 countries, but has yet to visit Mexico, one of the most important nations in terms of U.S. relationships. He left late last week for the Middle East, where he has been working on a peace deal between the Israelis and Palestinians, before heading to Asia.
Kerry said a planned trip to Mexico was postponed because of an emergency, and that he plans to go there soon. Other U.S. officials told me that he may participate in a U.S.-Mexico-Canada foreign ministers meeting in January, to prepare for the North American presidents’ summit in February.
According to top Kerry aides, the three NAFTA countries are planning to discuss, among other things, a regional energy agreement. Last week, Mexico’s Congress passed a historic bill that will change the constitution to end 75 years of total government control over its oil reserves, allowing foreign investors to help develop unexplored oil fields.
The rapid increase in trade between the United States, Mexico and Canada slowed down in recent years in part because of stiffer border controls in the aftermath of the 2001 terrorist attacks in New York and Washington, and also because anti-Mexican sentiment fueled by Fox News anchors and other U.S. anti-immigration zealots has inhibited U.S. policy-makers from pushing for deeper economic ties with Mexico.
But a recent poll by American University’s Center for North American studies showed that 32 percent of U.S. citizens would prefer Washington to prioritize trade agreements with Canada and Mexico, while smaller percentages would prefer to do that with Asia or Europe.
“The public is much more interested than our leaders in moving forward on collaboration with a North American strategy,” the Center’s director Robert Pastor told me when he released the poll on Nov. 1 “Americans believe that it would be wiser for us to turn to North America as a priority for tactical and strategic reasons before we negotiate with Europe or Asia.”
My opinion: There is nothing wrong with the Obama administration’s initiatives to create U.S.-Asia and U.S.-European economic blocs, but it doesn’t make sense to do that without U.S. partners in the Americas. If the United States wants to effectively compete with China and other emerging economic powers, it needs to build manufacturing and services supply chains in Mexico and other Latin American countries.
In that sense, Kerry’s revelation about a possible relaunching of the NAFTA deal is welcome news. And judging from the latest American University poll, there is no excuse for not doing it immediately, at the upcoming three-country summit in Mexico.