The purpose of Mercosur is to promote free trade and the movement of goods, people and foreign exchange. Since its inception, the functions of Mercosur have been updated and modified several times; it is currently limited to a customs union in which there is free trade within the zones and a common commercial policy between the Member States. In 2019, Mercosur generated a nominal gross domestic product (GDP) of about $4.6 trillion, ranking the bloc as the world`s 5th largest economy. The block is at the top of the Human Development Index. It has signed free trade agreements with Israel, Egypt, Japan and the European Union, among others. NAFTA, signed by President George H.W. Bush on December 17, 1992, has been in force since January 1994. It is the largest preferential trade agreement in the world. The agreement eliminated tariffs and other barriers to trade and investment between Canada, Mexico and the United States with a 15-year phase-in period. The transition period ends in 2008. The three countries form the largest market in the Western Hemisphere with 430 million people and a gross domestic product (GDP) of $13.4 trillion. The total exports of the three countries amount to more than a trillion dollars, or 15.4% of the world total.
In 2003, imports amounted to $1.7 trillion, or 23% of the world total. Since the 1990s, Latin American and Caribbean countries have been at the centre of U.S. trade policy, as evidenced by the adoption of the North American Free Trade Agreement (NAFTA), the United States-Chile Free Trade Agreement and, more recently, the Central America-Dominican Republic Free Trade Agreement (DCFTA-DR). The Bush administration has made trade deals important elements of U.S. trade policy. The United States is currently concluding trade negotiations with Andean countries on a free trade agreement (FTA) and restarting negotiations on a free trade agreement between the United States and Panama and a Free Trade Area of America (FTAA). The FTAA is an ongoing regional trade initiative that was first discussed in 1994 and officially launched in 1998. The last meeting of FTAA trade ministers was held in Miami in November 2003, but negotiations are currently at a standstill. On 18 and 19 May 2004, the United States began free trade negotiations with Colombia, Peru and Ecuador.
The first round of negotiations took place in May 2004 with Colombia, Peru and Ecuador (with Bolivia as observer) in Cartagena, Colombia. The last round of negotiations (thirteenth round), in which all countries participated, took place in November 2005 in Washington, D.C. It was expected that this round would be the last, but the talks ended without an agreement. Prior to the November talks, Presidents Alejandro Toledo of Peru, Alvaro Uribe of Colombia and Alfredo Palacio of Ecuador sent a letter to President Bush in October 2005 calling on the United States to „be more flexible in negotiations.” (28) Colombia and Ecuador withdrew from the negotiations because they stated that they could not accept the US position on patent protection and agriculture, while Peru decided to move forward alone in the negotiations with the USA. (29) 7. (back) For more information on the costs and benefits of regional trade agreements, see Cohen, Stephen D., Robert A. Blecker, and Peter D. Whitney, Fundamentals of U.S. Foreign Policy, Westview Press, 2003, pp.
49-79. The Mercosur countries began the transition to a common market in 1994 with the aim of completing internal free trade by the year 2000 and a common market by 2006. The goal of free trade has been delayed due to economic difficulties in member countries. The 2002 crisis, in which Argentina experienced its worst economic downturn in its independent history, was one of the most serious setbacks. Mercosur has a common external tariff (CET) organized in 11 stages with tariffs of 0 to 20% and an average level of 13.5%, which entered into force in 1995. The TEC provides for some exceptions with special customs regulations for the sugar and automotive sectors. Member States have approved common regional rules on trade in services, safeguard measures, anti-dumping measures and dispute settlement, but these have only been partially implemented. Mercosur`s executive body, the Joint Market Council (JCA), has approved a work programme focused on removing remaining barriers to market access. (44) Where the producer country provides specific incentives for production from free trade areas which are incompatible with the relevant guidelines of the General Agreement on Tariffs and Trade (GATT), the Member State may make the necessary adjustments to rebalance the situation. „A reformist desire to deepen trade within the bloc, as well as a veritable horror at Venezuela`s descent into an economically dysfunctional dictatorship, helped awaken the will of the original four members to slowly push Venezuela out of the bloc,” said Matthew M. Taylor, an associate professor at American University and an expert in Latin American political economy.
Since the adoption of NAFTA, the United States, Canada and Mexico have advanced trade liberalization through bilateral, regional and multilateral negotiations. All have participated in multilateral FTAA talks, but have also concluded other bilateral agreements to help them achieve their overall trade integration goals. Many of the negotiations that have resulted in trade agreements have been concluded relatively quickly and have resulted in broader trade liberalization than multilateral trade negotiations. One of the advantages of forming agreements on a bilateral or regional basis is that such agreements can allow for greater liberalization of tariff and non-tariff barriers to trade, as opposed to the multilateral approach, which generally allows for the partial reduction of a limited number of goods. The United States is Panama`s largest trading partner, accounting for about 50% of Panama`s exports and 34% of its imports. Merchandise trade between the United States and Panama is low. ==References=====External links===Exports to Panama amounted to $1.8 billion and U.S. imports to $316 million, resulting in a U.S.
trade surplus of $1.5 billion. Panama finished 48th. == References ===== External links ===* Official website In 2004, the countries of the Andean Community had a combined GDP of $314 billion and a population of 121 million. Exports from these countries amounted to $76 billion, or 0.8 per cent of the world total, while imports amounted to $52 billion, or 0.6 per cent of the world total. The country with the highest number of exports is Venezuela with exports of US$36 billion, and the country with the highest imports is Colombia with imports of US$17 billion. About ten per cent of the Andean Community`s trade is intra-group trade. The United States is the largest trading partner, accounting for about 50% of CAN exports, while the EU ranks second. U.S. imports from the region amounted to $40 billion, while U.S.
exports amounted to $13 billion. The United States had a trade deficit of $27 billion with the Andean Community in 2004. (48) In 1989, CARICOM members agreed on the creation of a CARICOM internal market and a CARICOM economy (CSME), which would involve the removal of barriers to trade in goods and services. allow the free movement of professionals; the removal of restrictions on capital movements; the adoption of a Common External Customs Tariff (CET) and a common commercial policy; and greater coordination in other areas of economic policy. The founding Treaty contains nine protocols of amendment aimed at facilitating the completion of the internal market. These include the institutional framework (Protocol I); establishment, provision of services and capital movements (Protocol II); Industrial policy (Protocol III), commercial policy (Protocol IV), agricultural policy (Protocol V), transport policy (Protocol VI), disadvantaged countries, regions and sectors (Protocol VII), competition policy (Protocol VIII) and dispute settlement (Protocol IX). Some protocols have entered into force, while others are provisionally applied by some Member States. Protocols that have entered into force include I, II, IV and VII. (54) In parallel with the conference, the US Department of Commerce, in cooperation with the Department of State, is organising a cross-sectoral trade mission from 17 to 20 December 2022, providing participants with the optimal place to engage directly in business opportunities in the Caribbean. Some observers are pessimistic about the possibility of a resumption of talks in the short term, but many analysts believe that the continuation of multilateral talks would be beneficial for the region.
Some expressed the hope that the WTO would make progress in the area of agriculture and that the November 2005 Summit of the Americas could help to advance the negotiations. According to a study by the Government Accountability Office (GAO), three factors have hampered progress in the FTAA negotiations: (1) the United States and Brazil have made little progress in resolving fundamental disputes on key negotiating issues; (2) Member State governments have transferred energy and commitment from the FTAA to bilateral and multilateral trade agreements. and (3) two mechanisms designed to facilitate progress, a new negotiating structure and the joint chairmanship of the United States and Brazil, did not do so. (65) The GAO study found that officials from many countries and regional groups in the Western Hemisphere have expressed their continued commitment to creating a mutually beneficial FTAA. (66) The Andean Community is considered to be one of the most institutionalised regional agreements among developing countries. Its institutional structure is modelled on that of the European Community. .