GT Media Coverage

International Roundtable: Free Trade Area of the Americas

Panelists agree that Free Trade Area of Americas pact may not be signed by original deadline of 2005 but it will exist in some form eventually and Miami is still the favorite to be the home to its permanent secretariat

From Miami Today, July 1, 2004

Michael Hayes, Miami Today International Editor, moderated the panel discussion and submitted the following introduction and transcript from the event.

It was April 22, 2001, when 34 heads of government in the Americas met in Canada to endorse a proposal to form the world’s largest trading bloc, the Free Trade Area of the Americas, by 2005.

Since, there have been notable advances and disappointing setbacks in the quest to achieve significant trade liberalization and removal of trade barriers in all the countries of the Western Hemisphere except Cuba. Some stumbling blocks have arisen over what should be the scope of the negotiations, leading to what has appeared to be an intractable impasse. That gave rise to the view that the free-trade area would in fact become an FTAA à la carte or FTAA “Lite” rather than the full-blown agreement originally envisioned and promoted by the US. As a result, the nations of the Americas have been pursuing bilateral and subregional free-trade agreements within the hemisphere and beyond.

While all this has been going on, Miami has been pursuing vigorously a major objective within the FTAA framework – to be chosen as the home of the zone’s permanent secretariat. A number of heads of state have voiced support for Miami’s bid, but competition remains strong – particularly from Panama City, Panama; Port-of-Spain, Trinidad and Tobago; and even some other US cities, notably Atlanta.

Miami Today has been following these developments closely in recent months and last week sponsored an International Roundtable, the last of the 2003-04 season, to review where things stand and the outlook for the FTAA.

The event, co-sponsored by Bank United, was held before an invited audience at the JW Marriott Hotel on Brickell Avenue.

Ambler Moss

The panelists were Dominique Virchaux, a trustee for Florida FTAA Inc. and managing partner of executive search consultant Virchaux & Partners; Ambler H. Moss Jr. a member of the board of advisors of Florida FTAA Inc., of counsel at law firm Greenberg Traurig, a former US ambassador to Panama and director of the University of Miami’s Dante B. Fascell North-South Center; Harold E. “Ed” Patricoff Jr., who represents the Miami-Dade County mayor and Board of County Commissioners on the Jay Malina International Trade Consortium and is chairman of the international dispute resolution group at law firm Shutts & Bowen LLP; and Manuel A. “Manny” Mencia, senior vice president and chief operating officer of the International Trade and Business Development unit of Enterprise Florida Inc., the non-profit government and business partnership established to guide the development of Florida’s economy, and former vice president of world marketing at the Beacon Council.

Moderator of the roundtable was Michael Hayes, Miami Today international editor.

Q: Mr. Virchaux what is the current state of negotiations leading toward the proposed Free Trade Area of the Americas and the effort to land its permanent secretariat here in Miami, and what are the factors in play?

Mr. Virchaux: It has been a long journey, and we still have a lot to do. Where are we today in terms of the negotiations? The August meeting in Brazil, which was scheduled to take place in June, has again been postponed, to December. We don’t have an exact date yet – it looks like it will be the end of November/early December. One reason is perhaps the November election in the US, but Brazil and Argentina have reduced their efforts in terms of reaching a full agreement by 2005.

That has an impact on the total agreement eventually. However, I would say that even as we have an agreement with fewer countries, maybe 16 to 18 countries, it is a very important start. One has to remember that in Europe, when they started the European Community, there were only six countries and the UK was not part of it. So the important situation to have is to eventually have a full agreement with maybe a smaller number of countries but a full agreement.

Who would have thought 15 years ago that 10 countries from the Eastern European bloc, Communist countries, today would be part of the European Community? So I think free trade will happen, and we have to be optimistic. We may not have a full agreement by 2005, but we will have a very important start.

Regardless of the fact that we may have a full agreement or maybe a lesser agreement at first, a Phase 1 agreement, we still will need a secretariat and Miami is a strong competitor for it.

How does Miami stand today? So far, we have five formal votes, most of them from Central America. Honduras, Nicaragua, El Salvador as well as Uruguay and Guatemala will formally announce very soon. There was a mission in Guatemala last week, and the official announcement will take place within a couple of weeks. We also have Costa Rica, who has said it will support on the first round Port of Spain but in case Port of Spain doesn’t get it, they will support on the second run Miami. That was actually a deal made by Costa Rica with the Caribbean countries in exchange for their support to have Miguel Rodríguez (of Costa Rica) elected as secretary general of the OAS (Organization of American States).

I think all of those are very positive news for Miami and for our community.

Our strongest competitor we recognize as Panama. That has to do with the question: Is the secretariat going to be in the United States or in the region? In that regard, I think Panama is definitely our strongest competitor. However, there are many other cities that are still in the running, and we take all of them very seriously. We’ve made sure, through visits to each of those countries with the political, private and civil sectors, that they understand how Miami could help them in developing free trade within each of their countries.

I would say that free trade is really not only about tariffs, it’s about democracy, it’s about middle class. You do not build middle class without democracy, and you do not build democracy without free trade.

For the Florida business community, it is very important that we continue to support all the efforts for the free-trade agreement. I think it’s fair to say that we are recognized as the cultural center for the region and as the business center of the region, and our ambition is to become the political center of the region. And all our efforts in achieving that goal will be extremely beneficial not only for Miami but really for the Americas. And that goes for free trade.

Q: There have been a number of incoming trade missions from Latin American countries, most recently Colombia, and more are scheduled. Are members of those missions showing any readiness to support the Miami secretariat bid?

Mr. Virchaux: I think particularly the interest of the country you just mentioned is very strong. If they had to vote with their head, all 34 countries would vote for Miami without any discussion. When it comes to voting with their heart – and that’s where the political comes into play – it may be not that much of a straight answer. But clearly, particularly in the case of Colombia, most of the countries in South America, and actually in most of the countries in the Andean region – we were in Quito three weeks ago at the OAS annual meeting when it was announced that Fort Lauderdale will be the location for next year’s annual meeting, which is another feather in South Florida’s cap – the support is pretty general, and definitely the support from the private sector is very strong.

Q: You mentioned a further postponement until later this year of the negotiation meeting. What has that been due to?

Mr. Virchaux: It’s the most complex agreement ever to be signed in the world, involving 34 countries, and that takes time. There is in the case of Brazil and Argentina probably discussion in terms of what they really want to have – a Free Trade Area of the Americas or a Mercosur and alliance with Europe and China. I think we will have a Free Trade Area of the Americas, but clearly at this stage, we are in long negotiation. The first negotiation took place in 1998 in Santiago, Chile, and we’ve made great progress. But we’ve made a lot of great progress over four years on maybe many items that are not so critical. Now we are down to the last few that are the absolutely critical ones.

I think it’s fair to say that each of the countries is looking at it very seriously and Brazil has taken a very important role in that situation.

Q: Ambassador Moss, how do you rate Panama’s chances of securing the FTAA secretariat?

Mr. Moss: Panama actually is an excellent candidate. It is not the candidate favored by most Latin American executives – the Economist Intelligence Unit, for instance, just came out with a study of 200 business executives around Latin America and fully 50% of them preferred Miami as the headquarters site. Panama was not second – São Paulo (Brazil) was, which is not even a candidate, with 16%.

So clearly the business executives and people like that in study after study and poll after poll favor Miami. I think Dominique Virchaux is absolutely right: If a free vote were taken, Miami would have it hands-down. On the other hand, if a free vote of countries had been taken, Trinidad would be it by now because it had the votes. However, it was decided – as our gringos usually decide things – that this would be done by consensus. You know what that means – deal-making behind the scenes, threats, promises, everything else until one gets it one’s own way. That’s why I would predict that Miami will be successful in the outcome even though Panama does have several advantages – not only geographic location but something has happened while we weren’t noticing. You can get anywhere from Miami airport, that’s true, but you also can now from Panama. If you look at the outreach of Copa Airlines, you can get to any Latin American capital today from Panama City.

I’m a great promoter of Miami. I’m on the board of Florida FTAA, but let me tell you something: Until we straighten out the way people are greeted at our airport, you can forget it. I’m not talking about the airport people – Angela Gittens and her team are marvelous – but the feds. This is the biggest turn-off, the biggest put-off, that I can imagine. It’s open and notorious how the Príncipe de Asturias was treated with his novia right before their royal wedding. The minister of Chile, an elegant lady, coming up here to sign the US-Chile free-trade agreement, was harassed and practically strip-searched. This is not funny. This happens over and over again. The consular corps has met on this, and they are livid.

Straighten out the airport, please, or else people are going to be so put off that they’re not going to come. That means federal attention from the top. It’s not the airport’s fault – it’s not even the State Department’s fault, although in the case of the Príncipe de Asturias, it definitely was. The absolutely absurd excuse was, “Oh gosh, we only had 48 hours’ notice!” Por favor, what are we, the Fourth World? No, we can do better than that. And we’d better do better than that because the Panamanians do.

I go to Panama quite a lot, and when you go there, you go sailing through the airport. There’s no problem, they don’t hassle you, they greet you. They have their security concerns as well, but they don’t hold everything up on account of them.

So let’s get our act straightened out and send the right message to the right people or else we have some serious problems.

When will the FTAA be decided? Maybe at the next trade ministers meeting, which could be, as Dominique Virchaux said, by the end of 2004. However, it may not be until early 2005 because there are still some big issues.

What are the big issues? Let’s backtrack all the way back to 9½ years ago in Miami, when this whole thing was launched at the Miami Summit of the Americas. At that time, there was sort of a disconnect in that there was never any common blueprint or common plan about what an FTAA should look like. Actually, if the truth be known, the year 2005 was plucked out of the air, mainly because APEC (the Asia Pacific Economic Cooperation) had the year 2010 and we couldn’t be beaten, and it was decided not on any econometric or political-economic evaluation of anything. But it stuck – 2005 is still there.

There never was a common blueprint of what the FTAA should look like. US and Canada said, “Obviously it’s NAFTA (the North American Free Trade Agreement) rolling south and absorbing everything in its track, isn’t it?” Meanwhile, Brazil said, “No, no, no, on the contrary, let’s build a SAFTA (South American free-trade agreement) and level up the playing field a bit and then deal with the north on a more even-handed basis. Those two concepts are still out there.

Nonetheless, there has been a convergence – the two sides are slowly getting together, and through the process, which is going on 9½ years, slowly it can be got together.

I would disagree with Dominique on one point: The FTAA is not the most complicated thing in the world. It could be the simplest thing in the world because it’s not a common market, it’s not a customs union, it’s not a common external tariff. It’s only a free-trade agreement – which can be whatever you want to put into it. That’s where the expression “FTAA Lite” comes up. It can have a thin content or a heavy content. For my book, it’s worth signing even an FTAA Lite to begin with because then one can always add to the substance later. After all, the European Common Market only began with six members, and now look at it.

Don’t be discouraged by what people say about slow speed. When one thinks of the European Coal and Steel Community, which was the beginning in 1952 of the European Union of today, and then came the Treaty of Rome, I think the Western Hemisphere in 9½ years has made astonishing speed. We shouldn’t be so impatient. It takes time to do these things and to do it right.

Q: What is the outlook for the CAFTA (Central America Free Trade Agreement) and other subregional and bilateral trade agreements that the US has been working toward?

Mr. Moss: It is one of the things that US Trade Representative Bob Zoellick has been pushing very hard and with very good results. I will give credit to him for being the biggest zealot in favor of free trade that I’ve ever known in any administration. He pushes as hard as he can, and he gets away with plenty by pushing the envelope mightily. We now have signed the Central America Free Trade Agreement. I certainly would not expect that to go to Congress before the elections are over – that would be foolish, it wouldn’t make it. But I think thereafter it will. We’re negotiating actively with the Andean countries, with Panama. Chile is done, and it’s already a success.

The fact is that Brazil is holding back but other countries are coming in with great enthusiasm to sign regional, subregional and bilateral agreements with the US because they see this as a tremendously interesting thing.

A big hangup is agricultural subsidies. Don’t believe all the bumper stickers you read – the US is a highly protectionist country. In agricultural subsidies, the latest farm bill propels us up into – using European football terms – the first division of protectionist countries in the world. Not as bad as the European Union, but a player in the first division certainly. That has to be done away with. That’s going to take place in very serious conversations in the WTO in July. Mercosur and Latin America are pushing the US and the European Union very hard to do something about their agricultural subsidies. The big “S” word in there – sugar – in both the EU and US cases is a prime example of extraordinary protectionist measures.

If progress can be made in breaking down the barriers of Europe and the United States in agricultural subsidies and protectionism, then I would bet the Brazilians will open up a bit on intellectual property, market access, trade in services and some of the other sticky points that we care about in moving the FTAA forward. Then it may not be such a light FTAA.

When will it happen? People are beginning to say around the hemisphere that it may not be right at the beginning of 2005, as originally envisaged. Richard Bernal, the chief Caribbean negotiator, has sort of hinted at that. So has Martín Redrado, lately the Argentine trade minister. But each has said that if it isn’t, it’s not the end of the world. Don’t worry, Europe wasn’t built in a day. This doesn’t have to be built in a day, and the year 2005 was not written in stone on Mount Sinai.

So if there’s a little bit of give and take, it’s not the end of the world. That may happen because it’s important to sort out some of these main differences in both forums – in the trade negotiating-committee forum of the FTAA process and in the WTO, particularly with respect to agricultural subsidies, in order to move the process forward.

In the medium term, we have cause to be optimistic about both things – an FTAA and, in the meantime, meaningful, workable subregional and bilateral agreements, also about capturing the headquarters site for Miami.

Q: Do you feel it is a given that there must be a full FTAA before there is an FTAA permanent secretariat? Can there be a virtualsec4 secretariat, for example?

Mr. Moss: I’ve heard it said, and I don’t doubt it, that if you really probe them deeply, USTR (the US Trade Representative) in Washington probably doesn’t want an FTAA secretariat at all. They’d rather have a virtual FTAA. However, Latin Americans are not buying that because they know perfectly well that if there’s a virtual FTAA, that means Washington. So I think there ultimately will be a secretariat somewhere. However, we could have almost workable FTAA arrangements through this network of agreements without any headquarters before there is ever any headquarters to an FTAA.

Q: Mr. Patricoff, where do we stand today in terms of subregional and bilateral free-trade agreements?

Mr. Patricoff: We have the North American Free Trade Agreement, we have a bilateral treaty in place with Chile. We have just signed an agreement with several Central American countries, the Central American Free Trade Agreement, that has not yet been ratified by Congress. We’re in negotiations with members of the Andean bloc – not all of them, but Colombia, Peru and Ecuador. Those negotiations are moving along very well, and the parties are very hopeful that we would have an agreement soon. There are also agreements that have been reached with the Dominican Republic, Australia, Morocco and Bahrain. Those treaties have not yet been ratified and are currently up for consideration with Congress.

There are also very strong discussions and negotiations going on with Colombia

So there are several free-trade agreements on the burner that would go a long way to making it easier to get the Free Trade Area of the Americas agreement ironed out. If you take it step-by-step, as the Europeans did, you iron out and resolve the differences among the countries by groups, and then it becomes easier to resolve the overall regional agreement, which is the target of the FTAA.

Q: In addition to your law practice, you are very much involved in international trade matters.

Mr. Patricoff: I’m on the board of the Jay Malina International Trade Consortium. This is an organization that was created by (Miami-Dade County Mayor) Alex Penelas about five years ago. It was formerly known as the Trade Mission Center of Miami. About two years ago, the county commission passed an ordinance creating it as a subdivision of Miami-Dade County and renamed it the Jay Malina International Trade Consortium.

The board is currently comprised of about 32 members. We host inbound and outbound trade missions. We also are lobbying for passage of the FTAA and for locating the permanent secretariat here in Miami. Our chairman, Commissioner Pepe Díaz, has been going on trade missions and cheerleading missions to different countries to obtain support for the FTAA and location in Miami of the secretariat for the FTAA.

I went on one of those missions, to Colombia last year. We met with President Uribe, and interestingly, his first question was not “Where are we going to locate the secretariat?” but “When are we going to pass a bilateral trade agreement between Colombia and the United States?”

I did some research on this point after the fact and talked to some people and found that Uribe is actually on the money. We spend hundreds of millions of dollars a year fighting drugs and the importation of drugs into this country from Colombia, yet at the same time, we’re taxing by way of tariffs Colombian products that come into the US. This seems to be very counterproductive. We should dissolve the trade barriers and, in fact, give them favored trading protection so that the legitimate businesses in Colombia can flourish and, hopefully, drive out the overwhelming prevalence of the narcotraficantes.

What do I see over the next year? I see more bilateral and regional trade agreements being passed and continued progress with the FTAA. I see my board continuing to host inbound and outbound missions. In the past 24 months, we have sponsored outbound missions to China, Morocco, Uruguay, South Africa and Belgium. These trade missions have all been very successful, resulting in several companies from abroad considering locating their offices here in Florida. We have also hosted incoming missions from the Dominican Republic, South Africa, Jamaica and Uruguay.

The Jay Malina board is also in the process of creating a trade database that would allow local businesses to go online and research imports or products that could be imported from other countries and also would allow people coming in from outside the South Florida area to locate potential sources of supply and exports to take back to their country.

Regarding the legal implications of these regional trade agreements, my law firm has just completed a study of 11 target countries in Latin America regarding the sales of services, specifically securities and insurance products. You’d be amazed at the differences among the laws of those countries and the effect that these regional trade agreements can have. For example, with the NAFTA in place, Mexico was one of the target countries that we analyzed, and it is a lot easier for people from South Florida who want to go into Mexico and sell either insurance or securities than it would be in other countries such as Colombia, Brazil or Argentina. In fact, some of the laws in place in Argentina right now make it very difficult for South Florida businesspeople to go to Argentina and sell insurance or securities.

So it’s actually a very good business advantage for South Florida businesses to have these regional trade agreements passed and, hopefully, ultimately to have the FTAA passed because that would allow our businesses that depend heavily on trade and interaction with foreigners to be able to penetrate markets they previously have not been able to penetrate.

What is the political future for the FTAA? It’s obviously a very difficult issue politically because of agricultural subsidies. Over time, we’ve seen our economy evolve from a manufacturing-based, heavy-industry type, which was the bread and butter of the US economy in the 1940s, ’50s and ’60s and into the late ’90s and the early 2000s, when we became more of a service-based industry.

While there are some people digging their heels in, particularly in the agricultural industry and among the unions who want to hold onto jobs – for example, the assembly line jobs and the jobs that are labor-intensive – the economic evolution is going to simply make it unprofitable for Americans to do those jobs. So we really need to focus our efforts on the service-based industries and the technologically based industries, where we can compete and where there is a richer market for Americans.

Once that evolution is complete, then the free-trade agreements will be a lot easier to pass and to realize.

Q: What are you hearing from members of inbound missions and those contacted by the outbound missions about doing international business and Miami’s role with or without an FTAA?

Mr. Patricoff: President Uribe of Colombia was very interested in a bilateral agreement. He said that he ultimately would support the FTAA but that it seemed to him that there was much greater chance that the bilateral treaty would pass. Based on history thus far, that’s probably correct.

The outbound mission to China was a fabulous, smashing success. The Chinese were tremendously interested in South Florida as a place to do business. In fact, one of the companies that the trade mission met with has already talked to some people about locating their headquarters here in Florida.

The incoming missions are interested to continue to do business here. Our law firm just sponsored one about three weeks ago, and the activity was brisk, there was a lot of interest, and we’re actually seeing some seeds of some of these companies already starting to open up offices and businesses here.

Q: Mr. Mencía, as someone at the sharp end of seeking support for Miami’s bid to be the location of the FTAA secretariat, how do you see the effort progressing?

Mr. Mencía: It’s unfortunate that in the discourse of the FTAA that the business community’s voice oftentimes isn’t heard as much as that of the opponents who cite some of the disadvantages of having free-trade agreements and opening your economy to competition, etc. It has always been the case that those who oppose have historically in this process been more organized, more vocal and more willing to be heard and exercise their political muscle. So this kind of pro-business forum is excellent, and we thank Miami Today.

Let’s put it in simple perspective: Enterprise Florida, along with Tony Villamil and the Washington Economics Group, the Beacon Council, the Greater Miami Chamber of Commerce, the Greater Miami Convention & Visitors Bureau and other partners in the community did an analysis some time ago in terms of the economic impact of a full-blown FTAA on the state of Florida if the permanent secretariat were also established in Miami – in other words, the synergy of the two.

The fact is the impact could be as high as $80 billion to $90 billion over the long run in the services, trade, etc. aspects in our state, and a lot of that impact would be down here. Gross domestic product growth for the state could be as much as $13 billion annually over the first 10 years after that agreement is signed – a tremendous impact in terms of the tax base of the state of Florida.

All that said, more than anything, particularly with the secretariat, you have a prestige value that you can’t put a dollar figure to. So from the standpoint of Florida and of the Miami community, whether it’s FTAA Lite, a series of bilateral agreements or a full FTAA, the one thing that’s important is that we make every effort for that secretariat, for that mechanism to manage the process, to be here in Miami.

Where are we? I am as optimistic as I’ve been since we began this effort seven years ago. Before Florida FTAA, Enterprise Florida was very much a part and very instrumental in the attraction of the temporary secretariat for the first three years to our community. But I’ve never been more optimistic than I am today that the Miami bid is actually gaining traction.

I would say just that today, we probably are sitting there with support, either committed or expected, from at least seven or eight countries. You can’t possibly underestimate the value of walking into this final negotiating process, this consensus-building process, with a considerable base of support. Yes, it won’t be one country-one vote, but it’s important that when this decision takes place, there be a vocal contingent of countries participating in that negotiation who think that Miami is the logical choice for the permanent secretariat of the FTAA.

It’s important also that no country walk in there with an overwhelming majority of support because whether it’s a consensus process or not, my opinion has always been that if Panama or Trinidad and Tobago or Miami would walk in there with 20 countries supporting it, you really can’t deny that prize. So to me, Miami having enough support to ensure that there isn’t a majority someplace else – whether you have a consensus process or whatever the process is – is extremely important.

I think we’re finally seeing the benefit. Enterprise Florida recently organized (Gov. Jeb Bush’s) visit to Honduras, where we obtained the commitment of President Maduro in support of Miami. That was, in fact, doubly important because the governor had been at the inauguration of President Saca in El Salvador, and he has been very proactive in asking for Saca’s vote. I think that’s one we will certainly get. Saca is a businessman – he knows a business location when he sees one, and he knows Miami is the best choice. But it was doubly important because (Georgia Gov.) Sonny Purdue was also there promoting the Atlanta bid for the permanent secretariat of the FTAA, and he was going on to Honduras to meet with President Maduro the following day, and it fell to the trade minister of Honduras to say to him, “You’re welcome to come to Tegucigalpa, but President Maduro is going to commit to Miami today after he meets with Gov. Jeb Bush.”

Like that, I think some of the things that are happening in the hemisphere – for example, the election of Torrijos in Panama – from the standpoint of the Miami bid are positive. President Moscoso had staked a great degree of prestige and effort as president of Panama on the pursuit of the permanent secretariat. I am sure President Torrijos would like to see it in Panama, but I think he has other agenda priorities, and I don’t think you’ll see the effort as intense as it has been.

So I think things are happening slowly. We’ll be hearing positive stuff coming from the Andean region. There was an election in the Dominican Republic where you had a country that was basically committed in writing by the previous administration to Panama. As in the United States, those mandates tend to exist just as long as somebody’s in power. We have a new president, Leonel Fernández, an unabashed lover of Miami. He has in fact worked closely with Florida International University and other institutions in Florida on economic development-related issues. So we have now someone there who I feel positive may take a second look at that commitment.

In short, I think we’re gaining traction. Florida FTAA’s Jorge Arrizurieta and Ambassador Chuck Cobb have done a tremendous job of positioning us, of focusing the energy on the right places. It’s a fun moment for us. It’s still a challenge. We’ve got to make sure that when all is said and done, we don’t come out with Colorado Springs as the site of the permanent secretariat or what have you. I’m truly and sincerely optimistic.

Q: You mentioned the opposition to the FTAA is well-organized. Where is the most significant opposition coming from?

Mr. Mencía: It’s a loose, fairly broad coalition. I would say the primary agents are labor, agriculture, some of the environmentalist elements. That’s where the highest volume of resistance is coming from.

In the case of agriculture, there are some legitimate issues out there. For example, the Florida citrus industry has a great deal of concern in terms of Brazil’s potential for monopolizing the citrus industry worldwide. By the same token, they have been fairly flexible in terms of the CAFTA agreement. We’ve been told by the president of Citrus Mutual that he would certainly not oppose and would probably be willing to support the CAFTA agreement as proof that their issues are basically legitimate and not simply protectionism but something that they feel is integral.

I think it behooves the state of Florida to work with the United States to get the best possible deal for our state. Believe me, our Brazilian, Argentine and Andean-region neighbors will be doing the same for their industry sectors. This is a negotiation, so everyone will go in with their best game and try to get the best possible deal.

In terms of the CAFTA agreement, the main opposing force is the sugar industry. It’s interesting that if you analyze the production patterns in the CAFTA region, the impact on the US sugar industry would be minimal. Now, the Dominican Republic, granted, is a bit of a separate story. But from Central America, it’s minimal.

It’s a matter of their having drawn a line in the sand, and they’re going to make every effort to stop the proliferation of these free-trade agreements in the Americas. But the concern is that they’re well-organized and that we, the business community, have not done a good-enough job of explaining to the citizenry, even of this community, the importance of free trade. I would bet you that if we were to go to the employees of the major manufacturing and exporting companies in this community and ask them, “Would a free-trade agreement be good for you or bad for you?” a big percentage of those people, if not a majority, would say that it would be bad for them even if their livelihood is directly tied to that process of trade.

Q: Is it possible there could be a compromise FTAA under which there could be substantial trade, anyway, though certain issues remained to be resolved?

Mr. Mencía: Absolutely. This is an extremely complex process because of the asymmetries that we have in this hemisphere. Let’s face it: Germany and Greece have a lot more in common economically than the United States and Haiti. So the asymmetries in the Western Hemisphere make this an extremely challenging effort from the standpoint that you have to take into consideration the interests of smaller nations where the swing of a few million dollars in one commodity one way or the other can be literally the difference between boom and bust.

I would say that whatever agreement is reached by 2005, it will probably require additional grounds of negotiations on those issues that are more complex. I’ve heard some say that probably what we will have by 2005 is an agreement basically on all the easy stuff, what everybody agrees to, and then the harder stuff will take a number of years to smooth out.

I don’t discard that the president may have to eventually go back to Congress for negotiating authority extended – it expires at the end of 2005, but you can get a two-year extension, if I’m not mistaken. I’m hoping that we get the full monty, shall we say, by the end of next year. But if not, I think it’s very worthwhile to have an agreement that we continue to smooth through the years, as the European Union and so many others have done.

Q: Mr. Virchaux, how do you see that latter point?

Mr. Virchaux: I think when we talk abut FTAA Lite or any other version, the real thrust of it is phases, and the best way of looking at it on a long-term basis is that we’re going to get a Phase 1 in 2005, and as we move on building those phases, we will get an agreement. It will take time. With Phase 1 and then phases 2 and 3, we will need a secretariat. It is so important for our community, for our state, that we all understand those phases, and even if it’s a Phase 1 Reduced, we will need a secretariat, and we want to have it here.

Q: Mr. Patricoff, do you have a further comment?

Mr. Patricoff: There’s currently pending up in Tallahassee a bill that would allow local insurance representatives to sell insurance products in Latin America. That bill will come up for consideration in the fall, and that, we think, would significantly enhance the ability of South Florida businesses to penetrate the Latin American market.

Q: Mr. Mencía?

Mr. Mencía: I would just like to exhort the Miami business community to keep its eye on the ball. If you look at the patterns of world trade and foreign direct investment, there’s a lot of trends that are ultimately very favorable for Miami – for example, the world patterns of foreign direct investment from manufacturing to service-oriented-type investment, the growth of value added where Miami would have a competitive advantage as opposed to some of the heavier manufactured products.

Q: A member of the audience, Ms. Carol Ellis-Cutler of Abood Wood-Fay Real Estate Group, asks what is being done to directly market Miami for the permanent secretariat, Mr. Mencía?

Mr. Mencía: Let’s give a great deal of credit to Chuck and Jorge Arrizurieta and Florida FTAA and their partners here in Miami – the Beacon Council, the Convention & Visitors Bureau, the Greater Miami chamber. All have worked very closely with my own organization, Enterprise Florida, to put together what I thought was by far the best bid proposal for the permanent secretariat and get it into the hands of the right people in the Americas. It was delivered not only to the heads of state, trade ministers and foreign ministers but also to the leadership of the business communities. It’s an interactive presentation.

The governor has been in 11 countries in Latin America and the Caribbean promoting this effort. Then there are the efforts of the local elected leadership in Miami-Dade, the mayor of Miami-Dade and the mayor of Miami. If you put that together with the efforts of the community, you come up with an extremely cohesive and effective effort.

Q: Mr. Hobi Linhares of Beame Architectural Partnership asks where might an FTAA permanent secretariat building here be located and what would be the process of choosing the site, Mr. Virchaux?

Mr. Virchaux: The location is not decided, but there is a drawing by Spillis Candela of a building. The process is to first get the secretariat. So let’s work on getting it, and then we’ll get to the building.

Q: Mr. Marcos Alcayaga of the Southwest Eighth Street Business and Managers Association asks what has happened to a longstanding proposal to seek to bring part of the structure of the Organization of American States to Miami, Ambassador Moss?

Mr. Moss: I’ve spoken through the years with (former Miami mayor) Maurice Ferré, a very visionary person who has this wonderful dream of moving the entire headquarters site of the Organization of American States from Washington to Miami. Good idea, hard to do. But he’s right in concept – the reason is Miami’s such a culturally unique and diverse place.

There’s an old story that runs around in the US foreign service about a visa officer in Kingston, Jamaica: A man comes in and asks for a visa one day, and the officer is looking over the situation and figures that this is not a person he wants to give a visa to because he’s not likely to come back home again. So he says in his best consular presence, “I’m very sorry, sir, but you do not qualify for a visa to the United States.” Whereupon the man says, “Man, I didn’t say I was going to the United States. I’m only going to Miami.”

I think that underscores the fact that we’re a Latin American city, we’re a Caribbean city, we’re an increasingly Brazilian city, we’re increasingly a European city, and we’re increasingly an Asian city. So Miami is quite possibly, in an integrated way, the most culturally diverse place in this country. And that is a tremendous strength of Miami.

Now, will it become the headquarters of the Organization of American States? Probably not. However, there are certain parts of it, to follow Maurice Ferré’s vision, which might be hived off and brought to Miami. For instance, the OAS Special Trade Unit, which follows – and quite well – this entire FTAA process. The similar part of the Inter-American Development Bank and of the UN Economic Commission for Latin America, those kinds of functions, could begin here.

That’s a way to build because, after all, we’re not interested in the sort of boring high diplomacy that the ambassadors sitting around the OAS Council talk about. We’re interested in business, commerce, trade, dispute resolution and practical things in life, and those things could possibly be located here.

If we are able to capture the FTAA headquarters site, I think that’s the next step, that’s a real possibility, and we ought to be thinking ahead and pushing for that next.

Copyright Miami Today 2004. Reprinted with permission.