Transcript Comprehensive Cooperation Agenda

FreeTrade Agreement Betwen Central America and the United States
and Comprehensive Cooperation Agenda
The CA-U.S. FTA:
“A growth opportunity for Central
American Countries”
Gabriela Llobet
August 2003
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Index
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Background
Causes and Reasons for the Negotiation
Overall Goals of the Negotiation
Features and Structure of the Negotiation
Content of the FTA
Comprehensive Cooperation Agenda
Progress in the Negotiation
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Background
The CBERA
• • Caribbean Basin Economic Recovery
Act (1984)
• •
Reforms to the Caribbean Basin
Economic Recovery Act (1990)
• •
Reforms to the Caribbean Basin Trade
Partnership Act (2000)
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Antecedentes
La ICC
Limitations of the Caribbean Basin Economic
Recovery Act
Access restrictions for certain products
» Unilateral character
» Lack of mechanism for solving controversies
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The FTA is a Unique Opportunity for the
Region
• Principal reasons:
• » Vital instrument for promoting the appropriate development
and growth of the region’s economies.
• » The Agreement guarantees predictable and sure access to the
world’s biggest market.
• » It promotes the establishment of an appropriate business
environment, by establishing a framework of transparent rules that
favor not only trade but investment.
• » Increase in sources of employment and generation of job
opportunities that improve Central Americans’ standard of living.
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Trade Statistics
Balance of Trade United States
Trade with Central America 1997-2002 ¹
United States
Trade with Central America 1997-2002 ¹
14,000
Exports
Imports
Balance
12,000
Millones US$
10,000
8,000
6,000
4,000
2,000
0
-2,000
-4,000
1997
1998
1999
2000
2001
2002
Fuente: USITC.
1/ 2002: datos preliminares acumulados a Noviembre.
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United States: Structure of Exports to
Central America 2002
Honduras
26%
Nicaragua
4%
Guatemala
21%
Costa Rica
32%
El Salvador
17%
Source: USITC
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United States: Structure of Imports from
Central America 2002
Nicaragua
6%
Honduras
29%
Guatemala
20%
Costa Rica
28%
El Salvador
17%
Source: USITC
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United States Trade With Central America, per
country
November 2002, in millions of USD
Exports
Imports
Costa Rica
3131.6
3141.7
El Salvador
1664.9
1982.4
Guatemala
2041.9
2799.8
Honduras
2564.6
3 264.0
Nicaragua
439.6
679.2
Fuente: USITC
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Investment Statistics
IUS investment in each Central American country,
2001
300
250
200
150
100
50
0
Millones US$
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
264.1
91.6
77.0
87.8
54.2
Fuente: USTIC
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Why the United States?
• •
United States is the region’s main trading
partner with a total of 285.3 million potential
consumers
•
Inhabitants with a per capital purchasing
capacity of $ 34,280
•
A Gross Domestic Product of $ 10,644
billions
Source: World Bank
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Causes and Reasons for the Negotiation
FOR CENTRAL AMERICA
» Increase its exports to U.S.
»
Diversify its imports.
»
Increase Foreign Direct Investment.
»
Reduce illegal emigration to U.S.
»
Strengthen democratic regimes.
»
Reap benefits of free trade without waiting for
FTAA.
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What would be achieved?
» Higher productivity (incorporation of new
technologies).
» Greater competition (opening and integration of
markets and consequent increase in exports and
imports).
» Increase in the pace of growth.
» Increase in employment.
» Improvement in the population’s living conditions.
» More security, more democracy, more
development.
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What would be achieved?
FOR THE U.S.
» Increase its exports to Central America.
» Increase its imports.
» Improve the conditions for that country’s direct foreign
investment in the region.
» Take a step forward in building the FTAA.
» Give a real demonstration of commitment to free trade.
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What would be achieved?
FOR THE U.S
» Promote the protection of the environment and
compliance with labor rights.
» Improve control over drug traffic.
» Prevent terrorism.
» Mitigate illegal immigration.
» Promote political stability and the strengthening of
democracy.
» Guarantee peace in the Caribbean Sea.
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What would be achieved?
» It is preferable to have neighbors who are poor but on
the road to frank development, than stagnating
economically and socially.
» It would reaffirm President Bush’s position that
democracy, security and development constitute an
inseparable whole.
» It would be clear evidence of the U.S. trade strategy
of advancing on several fronts simultaneously.
Promote the international leadership of the U.S.
» Demonstrate U.S. interest in poor countries.
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Goals of the Negotiation
• Consolidate, expand and improve our exports’ access to
the U.S. market.
• Eliminate non-tariff barriers to trade and other unjustified
measures that distort trade, and facilitate the circulation of
goods and services among the Parties.
• Establish and implement a Comprehensive Agenda of
Cooperation with the Government of the U.S. and
international organizations for the purpose of contributing
to the country’s development.
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Features and Structure of the
Negotiation
• Joint Central America-US negotiation.
• Structure of the negotiation:
• 5 Negotiating Groups
• Environmental and Labor Desk
• Market Access Desk
• Services and Investment Desk
• Solution of Controversies and Institutional Affairs Desk
• Intellectual Property and Public Sector Purchases Desk
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Features and Structure of the
Negotiation
• •
2 Working groups
• Group of Negotiating Chiefs
• Cooperation Committee
» •
Timetable
• 9 negotiating rounds
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Content of the FTA
• Market Access
• Rules of Origin and Customs Procedures
• Safeguards
• Public Sector Purchases
• Investment
• Services
• Intellectual Property
• Solution of Controversies
• Administration of the Treaty and General Exceptions
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Content of the FTA
• Labor
• Environment
• Cooperation
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Comprehensive Cooperation Agenda
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What is the Comprehensive
Cooperation Agenda?
• •
Articulated and comprehensive response to the
country’s standpoints on cooperation and technical
assistance.
• •
Concept: to serve as an instrument for taking maximize
advantage of the opportunities derived from the FTA for
the country’s diverse sectors.
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How to take maximum advantage of the
benefits to be provided by the FTA?
» Through:
» Improvement of the conditions allowing effective use to
be made of the Agreement.
» Expansion of the productive base that will benefit from
it, including options for facing the challenges of greater
competition on the marketplace.
» Speedy promotion of the skills, instruments and
techniques needed to accelerate enjoyment of the
Agreement’s benefits.
» acelerar el disfrute de los beneficios del acuerdo.
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What has hitherto been done?
» Establishment of two paths of cooperation: joint committee
United States Government
•
•
Special office within USTR in charge of coordinating over thirty agencies
Creation of a specific desk to deal with the subject of cooperation in parallel
with the negotiation
»
•
•
•
•
•
Committee of donor organizations
IDB
World Bank
ECLAC»
OAS
CABEI
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What’s next?
• Donors’ response to the cooperation projects presented on the basis
of the demand of the interested parties.
• Follow-up of the projects presented.
• Execution of the approved projects.
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Progress in the Negotiation
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CURRENT STATUS
Advance to the VI round of negotiation
• Analysis of the chapter proposals and counterproposals tabled in the V round.
• On the issue of market access, closure was
achieved of the chapter on customs procedures
and trade facilitation. Agreement was reached on
46% of the specific rules of origin excluding
textiles.
• The chapters on services, investment and public
sector purchases, presented in the V round, were
analyzed.
• The chapter on electronic commerce was closed.
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OUTLOOK
(August-September)
• Continuation of negotiation on chapters
» Possible substantial progress on several chapters
» Closure of several chapters
» Negotiation of certain issues becomes more complex
• Continuation of negotiation on market access
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OUTLOOK
(August-September)
» Progress in the discussion on access:
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General accommodation of products
Priority products
Sensitive products
Deadlines
Origin
• Discussion on sanitation and phytosanitation problems
• Deepening of the Comprehensive Cooperation Agenda
» Startup of Comprehensive Cooperation Agenda and handling of first
projects.
» Establishment of an Institute for the Creation of Commercial Capacities
between Central America and the Office of the Mayor of New Orleans
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NEXT CHALLENGES
• In relation to the negotiation
» Achieve increasing progress making it possible to enter the
third stage of the negotiation as of September
» Maintain the pace of the process
» Channel rising tension positively
• At national level
» Maintain active participation and involvement of the private
sector and groups interested in the process
» Continue and increase efforts on information and its
dissemination
» Continue strengthening the basis of support for FTA
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• In relation to CA
» Continue joint technical work
» Avoid moves that weaken the negotiating position
» Manage the challenge posed by the election processes in some countries
• In relation to U.S.
» Maintain the Administration’s “focus” on this process
» Expand the basis of support for FTA
• Post-negotiation: Legislative approval
• Post-approval: Making use of the agreement!
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Foreign Trade Ministry
http://www.comex.go.cr
[email protected]
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