The United States has opened negotiations to create a free trade agreement with five Central American countries -- Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. The planned agreement, known as CAFTA, will eliminate tariffs and other barriers to trade in manufacturing, agriculture, services, and investment between the U.S. and Central America.
CAFTA will also advance Central America's political development. In the words of U.S. Trade Representative Robert Zoellick, "CAFTA is a key part of America's regional and global efforts to promote free trade. It will promote the indispensable building-blocks of a free society -- such as respect for the rule of law, private property rights, competition, and accountable institutions."
Mexico knows the value of expanded free trade. In 1992, Mexico signed the North American Free Trade Agreement with the U.S. and Canada. The benefits of NAFTA to the people of Mexico have been enormous. Since NAFTA's inception in 1994, Mexico's imports to the U.S. have increased nearly one-hundred-fifty percent. Over half of the three-and-a-half million new jobs created in Mexico since then are connected to trade. And NAFTA has contributed to Mexico's political modernization and its resilience in the world economy.
Chile also knows the value of expanded free trade. As a result of economic reforms and trade liberalization, poverty in Chile was cut in half between 1987 and 2000. The U.S. concluded a free trade agreement with Chile last year. Both sides agree that the accord will further reduce poverty in Chile while strengthening its democratic institutions.
It is hoped that these trade agreements will pave the way for the ultimate goal: the Free Trade Area of the Americas. The F-T-A-A will bring together thirty-four nations in the Western hemisphere with a combined gross domestic product of more than ten-trillion dollars and a market of over three-quarters of a billion people. It will promote economic integration throughout the hemisphere by removing barriers to investment and trade. The U.S. hopes to conclude negotiations for the Free Trade Area of the Americas by 2005.
As President George W. Bush has said, free trade "is not just an economic opportunity, it is a moral imperative." The benefits of open trade, as Mr. Bush said, "are measured not only in dollars and cents, but in human freedom, human dignity, human rights and progress."