Trade Background: The Americas

The 2016 Statistical Yearbook for Latin America and the Caribbean
February 2017

Remarks at the 20th Anniversary of the Summit of the Americas

(December 10, 2014) “Twenty years ago this week, President Clinton – hard to believe it’s 20 years already – brought together 34 democratically elected leaders in Miami for the first Summit of the Americas. And the President was unequivocal about the mission. He called on leaders from across the region to open new markets and to create new free trade zones, to strengthen the movement towards democracy, and to improve the quality of life for all our people. He said simply, “If we’re successful, the summit will lead to more jobs, opportunity and prosperity for our children and for generations to come.”

Today, as we gear up for next April’s Summit of the Americas in Panama, we find ourselves really closer than ever to realizing that vision.

The progress hasn’t always been steady. It hasn’t always been even. It hasn’t always been forward. But progress has been hard won.”John Kerry, featured in U.S. State Department, December 10, 2014

September 2014 – “The four presidents of Latin America’s $2.1 trillion Pacific Alliance bloc said integration is a tool for fighting inequality and they will seek a common agenda with the Mercosur group, led by Brazil and Argentina.”

“The leaders of Mexico, Colombia, Peru and Chile said closer ties will boost growth that can reduce poverty in what Chilean President Michelle Bachelet called the most unequal region of the world. Pacific Alliance officials plan to meet with Mercosur counterparts in November to discuss areas of agreement, she said yesterday at the Bloomberg Latin America Forum in New York.”

“Costa Rica is in the process of becoming the fifth member of the bloc, while Panamanian President Juan Carlos Varela said yesterday in an interview that he discussed joining the alliance with Bachelet.”

Bloomberg, September 23, 2014


June 2012 – Chile, Colombia, Mexico, and Peru now have an accord aimed at developing closer economic ties and boosting trade with Asia-Pacific countries, leaders from the four countries, which have a combined GDP of more than US$2 trillion and over 200 million consumers, and make up 40 percent Latin America’s GDP and 55 percent of the its total exports.

Hemisphere-Wide Agreement

On December 11, 1994, at the Summit of the Americas held in Miami, leaders of the 34 Western Hemisphere nations (excluding Cuba) agreed to establish the world’s largest free trade bloc. A Free Trade Area of the Americas (FTAA) would unite the economies of the Americas into a single free trade area and progressively eliminate barriers to trade and investment.

The FTAA is still under negotiation, but is no longer the agreement originally envisioned in 1994. The new framework agreed to at a Ministerial meeting in 2003 called for the creation of a “common set of rights and obligations” applicable to all FTAA nations, while also permitting countries to pursue additional commitments through multilateral agreements under the umbrella of the FTAA. Following the fourth Summit of the Americas in November 2005, which was attended by President George Bush and other leaders of the region, Assistant Secretary of State for Western Hemisphere Affairs, Thomas Shannon, commented, ” While 29 of the 34 regional democracies are prepared to move forward immediately toward the creation of an FTAA, Brazil, Argentina, Uruguay, Paraguay, and Venezuela are not.” Talks are currently on hold.

The Free Trade Area of the Americas (FTAA) would be a nearly $21 trillion economic area with over 955 million consumers. Free Trade Area of the Americas (FTAA/ALCA)

Other Trade Agreements

The Americas are well developed as markets for regional trade and investment. The United States has signed and implemented multiple Free Trade Agreements with Latin American nations, and is currently negotiating with others, including Colombia and Panama.

The Common Market of the Southern Cone (MERCOSUR) was established in 1991 to encourage economic cooperation among the countries of South America. Products put together in the MERCOSUR can circulate without tariffs if no more than 40 percent of the export value of the final good is made of materials originating in a fellow MERCOSUR country. The organization was originally made up of Brazil, Argentina, Uruguay, and Paraguay, with Chile and Bolivia as associate members. Venezuela became a full member in 2006. Other associate members now include Mexico, Peru, Colombia and Ecuador. The MERCOSUR is also negotiating agreements with India and more than 30 other nations.

Mexican trade policy is among the most open in the world, with 43 total Free Trade Agreements including those with the United States, Canada, the EU, and Israel. Mexico’s emphasis on foreign trade has made it one of the world’s top 20 importers and exporters. The United States remains Mexico’s principal trading partner and investor, with the European Union and Japan following in second and third place. Mexico is the only country besides Israel which has Free Trade Agreements with the two largest markets in the world – Europe and North America.

Bolivarian Alliance for the Americas

The Bolivarian Alliance for the Peoples of Our America (ALBA) is an international cooperation organization based on the idea of social, political, and economic integration between the countries of Latin America and the Caribbean. The member nations are Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines and Venezuela. The agreement was initially proposed as an alternative to the Free Trade Area of the Americas (FTAA).