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ofProceedings

Summary
WestemHemisphere
Trade& Commerce
Forum
Denver,Colorado
July1-2,1995

U.S
. DEPARTMENT
OFCOMMERCE
Summaryof Proceedings

Western Hemisphere
Trade & Commerce Forum

Denver, Colorado
July 1-2, 1995

Published by
U.S. DEPARTMENT OF COMMERCE
International Trade Administration

September 1995
THE WHITE HOUSE
WASHINGTON

September 14, 1995

In December 1994 the leaders of the Western Hemisphere came


together in Miami to seize an historic opportunity. We joined
together to build a community of nations committed to the values
of liberty and the promise of prosperity. The many achievements
of the Summit of the Americas included agreement on principles to
help open new markets and to create a free trade area throughout
our hemisphere.

The June 1995 Western Hemisphere Trade and Commerce Forum


advanced the vision of the Summit by bringing together the best
of the hemisphere's business, academic and government leaders.
These men and women from throughout the region identified
challenges to improve commercial ties and discussed ways to
overcome those hurdles. They endorsed the free trade goals set
forth at the Summit of the Americas and committed themselves to
the hard work necessary to achieve success.

I applaud Secretary of Commerce Ronald H. Brown and United States


Trade Representative Ambassador Michael Kantor for their
achievement in organizing this dynamic event. The Western
Hemisphere Trade and Commerce Forum represents a significant step
toward making our region's marketplace more vibrant and open. It
moves us closer to the day when our regional partnership will
make freedom, opportunity and prosperity the common property of
all the people of the Americas.
Santafe de Bogota. D.C .
August 9, 1995

Dear Businessmen of the America s:

An unprecedented encounter of hemisph eric bu s inessmen took


place at the Trade and Comm erce Forum held in Denver Culorado
July 1-2, 1995 . Over 1000 entrepreneur s belon g in g to multiple
cultural settings from Ala ska to Tierra del Fuego gather ed to s peak
a common language: that of private initiative and com merceia I
integration. Their discussions and recommendation s, as cont ained in
the reports released by the United Stat es Departm ent of C omm erce .
constitute a unique legacy in the proce ss of buildin g a F ree Tra d e
Area of the Americas (FTAA).

The partnership between the private se ctor s of th e Am e1 icas , and


between them and their government s, mu st be viewe d as a n
ongoing process which should be con stantly nurtur ed , if we want to
ensure that everyone will profit from economi c int eg rati o n . Our
business communities throughout th e Hemi sph er e play a pi vo l al
role in fostering economic growth and socia] welfare and thei r
contribution to free trade talks is undi sput ed. W itn ess, fo r example ,
the active participation of the Canadian/Mexican a n/U S . pri private
sectors in the NAFTA ne g oti a tions , or th a t of th e
Colombian/Mexican/Venezuelan bu sin ess m e n in the rece ntiy
conclude G-3 agreement. The con stru ction of a FTAA, as envisioned
in the Miami Summit Declaration , should foll ow th is sa me path .

My country is deeply honored by th e un animou s desig nat i e n in


Denver to act as the host of the next Hemi sph eric Tr ade Min is te rial ,
which will take place in Cartagena , in March , 1996. Whil e we ex p ec t
our ministers to agree there on furth er step s to achi eve co mm ercial
integration, such an effort would be lame without a parall e l mee ti ng
of businessmen. This is why Colombia wilJ simultaneously ho st a
Trade and Commerce Forum , which will enabl e ent re pr eneu rs fr om
throughout the Hemisphere both to interact with th eir count e rp a rts
on a common stage, and to assi st our government s by expressing
their authorized views on issues which are crucial to th e i nteg ratio11
arrangements are now under way . and
process. The organizational early to announce an a ge nd a . we do
even though it is still too which will addre ss all areas of
anticipate a comprehensive forum
interest to the private sector.

Colombia is particu_larly suited to be center point of this business


forum. Geographically , our country is located half-way between the
northern top and the southern end of the Hemisphire. our business
culture is founded on the principles of private initiativ e and free
enterprises , which have structured over the year " an ex tr emely
ambitious and open-minded local ent1·eprcneurial c ommun i ty. on
the economic front, Colombia is well known i internationally11 for its
sound macroeconomic management , and our liberaliz ation program
has paved the way for sustained economic growth , financial
stability and investors confidence. We would like to pr esent these
as our credentials to host the 1996 Trade and Commerc e Forum.

In my condition as President of Colombia, and acting a lso as the


spokesman for the Colombian private sector, I would lik e to ex tend
to you our most cordial invitation to attend the 1996 Forum. The
businessmen of the Americas must join their governrnent.; in
pursuing integra _tion, free competition and democratic valu es in the
Hemisphere. It 1s through this longstanding partner ship th at we will
be able to ensure well-being for our workers , our am1·1·ies and our
c 11 ren. o please reserve a space in your agendas for March 1996,
and receive our advanced
Commerce Fo1·um we come to Co101nbia ' s Trade and
, Cartagena/96.

Sincerely,
THE SECRETARY OF COMMERCE
Washington. D.C. 20230

Dear Hemispheric Forum Participant:

By all accounts, the Western Hemisphere Trade and Commerce Forum was a great
success with over 1,100 participants including ministers, private sector leaders, and press from 34
countries in the hemisphere in attendance. Its success was due to the active participation of all
delegations and the constructive exchange among governments and businesses hemisphere-wide .

So that the outcomes of the Forum may be widely understood -- and acted upon we
have prepared the WesternHemisphere Tradeand CommerceForum: A Summary of
Proceedings, 1995. I hope you find it useful and that you will refer to it often as we seek to form
the largest free trade area in the world .

I was particularly impressed by the breadth and depth of the discussions and the
recommendations which flowed from them . Traditionally governments have acted -- both
unilaterally and in concert with one another -- to shape the international trading system without
consulting the people who best understand international trade . July's Denver Forum generated an
important precedent for including the private sector at the beginning of the process of hemispheric
integration and building the Free Trade Area of the Americas, and these discussions and
recommendations will help guide our governments from the outset.

As I noted in Denver, governments acting alone simply are not as effective in promoting
free trade as governments acting in partnership with the private sector. The private sector has
been leading the process of hemispheric commercial integration for many years . With this
conference we have begun to harness our collective knowledge and experience in the service of
free trade throughout the hemisphere. I believe the processes we have set in motion will have
profound and beneficial effects for many years to come . (An addendum in the Summary notes the
suggestion made in Denver that private sector leaders in the hemisphere replicate the Forum at the
national level.) With the solid support of the private sector , hemispheric governments can meet
the schedule for concluding the negotiation of the Free Trade Area of the Amer icas by 2005 .

I encourage you to read carefully the ideas contained in the Summary. Your thoughtful
reflections on this year's forum can be an important contribution to the discussion at the next
Forum in Cartagena de Indias, Colombia and the Forum in 1997 which Brazil has offered to host
in Belo Horizonte. Your active participation will make it all the more successful.

Sincerely ,

Ronald H . Brown
Acknowledgements

The Department of Commerce wishes to thank the following individuals for their efforts in producing the Summary
of Proceedings, 1995:

Th.eWorkshop
• Coordinators
Information Infrastructure Helen Shaw, National Telecommunications and Information Agency
Energy Catherine Vial, International Trade Administration
Transportation C. William Johnson, International Trade Administration
Agribusiness Hayden Boyd, International Trade Administration
Tourism Wanda Barquin, U.S.Travel and Tourism Administration
Health Technology Vicki Kader, International Trade Administration
Environment Kristine Bretl, International Trade Administration
Standards Christopher Lion, International Trade Administration
Legal Systems Ursula Odiaga Iannone, Office of General Counsel
Small/Medium Sized Business Ellen Lenny, International Trade Administration
Information Marketplace John Siegmund, International Trade Administration
Private Sector Financing Pompiliu Verzariu, International Trade Administration
Workforce Jorge Perez Lopez, U.S. Department of Labor

The Department also appreciates the efforts of Jennifer Brown and Scott Logan, interns in the International Trade
Administration's Office of Inter-American Affairs for their assistance in the preparation of this volume .

IX
Table of Contents

Executive Summary xiii

Sectoral Recommendations 1
Telecommunications Sector 3
• Energy Sector 4
• Transportation Sector 5
• Agribusiness Sector 6
• Tourism Sector 8
• Health Care Sector 10
• Environment Sector 10

Workshop Summaries and Recommendations 13


• Building a Foundation for a Hemispheric Information Infrastructure 15
• Meeting the Energy Needs of the Americas 23
• Transportation: Moving the Hemisphere Together 28
• Agribusiness in the Free Trade Area of the Americas 33
• Tourism: Expanding Commercial Horizons 39
• Improving the Hemisphere's Health through Open Markets 45
• Environment and the Economics of Integration 52
• Hemispheric Commerce: Setting the Standards of Integration 61
• Enhancing Integration through Legal Systems 65
• SmaU and Medium Sized Businesses in a Hemispheric Marketplace 69
• Towards a Hemispheric Information Marketplace 75
• Private Sector Financing: Infrastructure and Privatization 81
• Preparing our Workforce for the Age of Commercial Integration and
Hemispheric Free Trade 85

Plenary Remarks 89

• Opening Remarks 91
Hon. Ronald H. Brown, U.S. Secretary of Commerce 93
Hon. Federico Peña, U.S. Secretary of Transportation 95
Ambassador Michael Kantor, U.S. Trade Representative 98

• Luncheon Address 101


Hon. Thomas McClarty, Counselor to the President
of the United States 103

XJ
• Towards a Hemispheric Capital Market 107
William Rhodes, Vice Chairman, Citibank, USA 109
H.E. Marie Michelle Rey, Minister of Finance and Economy, Haiti 111
H.E. Domingo Cavallo, Minister of Economy, Argentina 113
Enrique Iglesias, President, Inter-American Development Bank 114

• The Evolution of Integration: Bringing Regional Agreements Together 119


H.E. Alvaro Garcia, Minister of Economy, Chile 121
H.E. Cesar Gaviria, Secretary General, OAS 123
H.E. Dorothea Wemeck, Minister of Industry,
Commerce and Tourism, Brazil 126

• Toward a Free Trade Area of the Americas 129


Stephen Chesebro', President and CEO, Tenneco Gas, USA 131
Manuel Feliu, President, CEAL, Chile 133
Juan Gallardo, Coordinator, COECE, Mexico 136
Kevin McGrath, President and CEO, Hughes Communications, USA 138

• Concluding Remarks 141


Hon. Ronald H. Brown, U.S. Secretary of Commerce 143

Appendices 145

• Summit of the Americas Trade Ministerial, Final Joint Declaration 147

• Western Hemisphere Trade and Commerce Forum Agenda 153

• National Forums 163

XU
EXECUTIVE SUMMARY

The Western Hemisphere Trade and Commerce Forum -- held over July 1-2, 1995 in Denver , Colorado --
was an unprecedented gathering of the hemisphere's public and private sector leadership . The purpose of the
forum was to integrate the private sector from the outset in the negotiations for the Free Trade Area of the
Americas that leaders have resolved to conclude by 2005 and to solicit advice on how the movement toward
trade integration throughout the region can best benefit commercial growth . There has long been a recognition
that while trade liberalization is important, in and of itself it does not assure enhanced commercial activity .
Barriers to trade exist beyond tariffs. Inadequate infrastructure, particular domestic policies, and differing
legal systems can and do preclude full participation in the international marketplace or make such participation
too expensive for many firms .

The forum addressed many of these issues and provided recommendations on how to achieve greater
commercial relations throughout the region. Enhanced economic activity has enormous implications for the
well being of the hemisphere. The United Nations has estimated that the transaction costs of doing business
internationallycan amount to as much as 6-10 percent of the product cost. Reducing these costs not only will
make firms more competitive regionally, but globally as well. This in turn will lead to more and better paying
jobs. In the United States for example, it has been estimated that export-related jobs pay about 13 percent
more than other, comparable, employment. Additionalstudies also indicate that export-oriented jobs are more
secure, more environmentally friendly, and use more technology.

The more than 1,200 attendees and panelists who participated in the forum reviewed a comprehensive set of
both sectoral and functional issues, all of which in one way or another will have a direct impact on a firm ' s
ability to participate in the global economy. Whether improved access to better health care (and thus greater
worker productivity) or workplace issues, or access to financing, all panels raised issues which will impact
on firms directly. Not only are the countries of the Hemisphere becoming much more integrated globally, they
also are affected to a much greater degree than before by a convergence of "non-traditional" commercial/trade
issues.

Each of the sectoral working groups provided recommendations, not only for the governments to consider but
for international organizations and private sector groups as well. Although the groups were quite diverse ,
there were themes common to many of the recommendations . Naturally, particular work groups in sectors
which have strong regional or international organizations -- such as telecommunications -- provided much
greater detail for Ministers and other members of the public and private sectors to consider . Some of the
major themes developed by the groups included:

• Private sector supportfor commercialintegrationand the Free Trade Area of the Americas was
strong in virtually all work groups. The discussion in many groups and some recommendations
emphasized the importance of private sector involvement in the Free Trade Area of the Americas
process, and the need for the private sector to remain aware of developments and advise governments.

• Reduceand/orharmonizeexistingregulationswhich limit or preclude greater trade and integration.


This view was widespread, especially in areas such as agriculture, energy, transportation, and
telecommunications . Country practices are viewed as a major factor in inhibiting trade and
investment. There seemed to be widespread recognition of the need for regulation , but also a
recognition that greater commercial development, especially for small and medium-sized firms, within
the hemisphere will not be possible without significant improvement in the regulatory environment.

xm
• • • • in many sectors. Consequently, barriers
Technologyand telecommunicationsunderpinintegration . .
to access to technology and telecommunications growth can inhibit mtegranon orts create
competitive disadvantages. . .
• Regw. n m •institutions
· international ons an non-g govemmental organizationsshould
. . . be included
• in the
integration process: Group discussions indicated an interest in including existing regional and 1
AA and integration process, from multilateral lending institutions
international organizations in the FTAA
to business organizations to organizations that are focussed on particular sectors. Groups seemed to
want the process to be inclusive and to reach out beyond government to government discussions

• An emphasis on information exchange, training, health, and education suggests _that the groups
recognized that in order to make the integration process work, the hemisphere will need a better
educated and heatlthyworkforce and management team. Moreover, such efforts will inevitably make
the region more competitive internationally.

• A recognition that there are limited funding resources for a variety of competing objectives and
necessary infrastructure projects . Therefore, the emphasis was placed on what governments can do
to streamline processes, create greater efficiencies, provide greater opportunities for competition, and
find creative ways to enable the private sector to meet some of the demands previously filled by
governments and multilateral institutions.

These recommendations will provide a focal point for the continuing dialogue to which Ministers have
committed, and the likely basis for amplification in future trade and commerce fora.

Plenary speakers on July 1 reviewed the mandate to create the Free Trade Area of the Americas, and efforts
since the Summit of the Americas in December 1994 to move the process forward, including the pivotal event
of the Denver Ministerial and its declaration that were completed the day before the forum. Speakers
emphasized the commitment of the Clinton Administration to open markets and prosperity hemisphere-wide,
the key role of the private sector in pioneer_ing the integration process, in educating the public about why trade
is in its interest, and called on the hemisphere to identify and eliminate barriers to trade. Speakers also
identified the obligation incumbent upon. the hemisphere to build an efficient transportation system and
examined how countnes can raise the financmgnecessary to satisfy the region's substantial infrastructure needs
in the coming decade, enhance transparency and increase savings.

The morning plenary panels on July 2 examined the means to create the Free Trade Area by building on the
World Trade Organization accords'. cooperation among subregional groups based on the experience gained
through existing agree_ments, estabhshmg mutual goals, fostering mutual trust and sharing information, and
reaching out to the pnvate sector.

The closing plenary saw the presentation. of the recommendations from the worksho ps that at a met over e
two days • and heard remarks from
. key. pnvate sector
. leaders from
. throughout the hemisphere
p ere. ese spe ers
emphasized the importance
. of mcludmg the pnvate sector
. m building Free Trad e ea oug usmess
to business transactions, sound governmental fiscal pohcy and consistent laws and . .
• · · regu 1ations. ey issues
were idenufied mcludmg economies at i 1erent levels of development difference
. . . , s o view regar mg 1a or
and environment and the need to deve1op hemisphenc infrastructure. The private secto
· r can e 1p y prov, mo
experience, creative solutions, UJ mg a consensus for and helping to implement the Free Trade Area. o

The forum formally addressed thirteen areas of sectoral and functional interest C . .
• omments were directed with

XlV
a view toward the notion of what must be done in order to facilitate commercial integration by the year 2005
-- the target date for the Free Trade Area.

During the morning of July 1, seven sectoral panels discussed key issues in commercial integration and on the
morning of July 2 developed specific recommendationsto assist policy makers in addressing key questions and
developing solutions which will enhance, and not retard, developments in those sectors.

• At present, the hemispheric telecommunications industry is "marked by impressive technological


advances, sweeping regulatory changes, and rapid moves toward free markets." There remain
however, significant barriers that inhibit market access and growth : including technical barriers,
unauthorized use of the network, lack of network access, competitive disadvantages of developing
nations, trade barriers, "knowledge" barriers, and adequacy of current technologies to create the
global networks of the 21st century. Panelists agreed that critical and timely efforts are needed to find
a way to address these barriers creatively in order to attain hemispheric economic integration by 2005 .

• The booming demand for power generation capacity, the continuous necessity to explore natural
resources in an environmentally-responsible manner, and the urgent need for enormous investments
in the energy sector are creating unprecedented challenges and opportunities for cooperation among
all the countries of the Americas and the private sector. Overall economic expansion, improved
service for energy users, and reduced government funding outlays, which are the three driving forces
behind the restructuring of the energy sectors throughout the Americas, would be the prime
beneficiaries of such regional cooperation. The private sector will be the key player in our integration
in terms of building, providing equipment and services, and investing, while the role of the public
sector will be that of a catalyst and a regulator. The development of a reliable and predictable
hemispheric energy market will inevitably not only benefit local economic growth but also improve
hemispheric trade ties.

• Panelists and members of the audience discussed the benefits from greater integration of and
cooperation relating to the hemisphere's transportation system. They saw substantial benefits
accruing to the region's economies from improved and integrated transportation infrastructure, more
open less regulated trade, harmonized technical and operating procedures, and the increased use of
modern technologies.

• In agribusiness, there are many opportunities for gains to the entire hemisphere from greater
commercial integration. The Uruguay Round agreement, which brings agricultural trade under world
trade disciplines for the first time, forms a sound foundation for this integration. But, participants
identified many other important issues that trade negotiators must resolve before integration can
become a reality. Since these issues are so complex , and given the importance of agriculture ,
participants supported giving agricultural issues priority in negotiations leading to the creation of the
Free Trade Area of the Americas (FT AA).

• Travel and tourism, often overlooked as a source of foreign exchange, also can be a catalyst for
further commercial activity . Therefore, commercial integration will have a profound effect on the
sector and greatly increase opportunities for expansion . Discussions identified impediments to
expanding travel and tourism-related trade and investment and focused on the use of technology for
tourism promotion and the overall development of national tourism policies to encouraging and
expanding private sector investment.

xv
• Health care is an area which can benefit from closer integration, such as telemedicine -- which can
provide lifesaving linkages but it is important to recognize that such medicine would be more clinical
rather than preventive . Thus existing regional organizations such as the Pan Amencan Health
Organization (P AHO) will continue to play an important role in improving the overall health of the
hemisphere . Respect for intellectual property rights also will permit more advanced medicines to be
marketed and it will be important to contain costs as well.

• Increasingly, concern for the environment has become interrelated with other questions of economic
develpment Environmental policies often have been seen as barriers to trade in many naations, and
it 1s 1Il1portant that the private sector participate in the development of pohc1es which will affect It.
Environmental infrastructure should be considered a key component of every country's economic
development strategy since it would ensure the efficiency and competitiveness of production , and the
social and economic well being of all citizens of the region. Policies should , however, be consistent
with the level of development of each country; few countries can afford to dedicate limited resources
and energy on wasteful environmental policies.

There also were six functional workshops that met in the afternoon of July 1: standards ; legal systems ; small
and medium-sized businesses; information; private sector financing; and, the workforce. These pane ls
examined issues that cut across sectors. Although not specifically charged with providing recommendations
to Ministers, each panel sought to develop ideas which would foster the integration process .

• One panel reviewed the commitment concerning standards in the Denver Ministerial Joint State ment
and discussed how the private sector should support this political commitment. The panel also
acknowledged the importance of standards and conformity assessment procedures to international tr ade
and discussed specific recommendations to ensure that the harmonization of standards and conformity
assessment procedures serves the interests of all parties.

• Panelists from the public and private sectors of Brazil, Ecuador, Mexico, Peru, Venezuela and the
United States discussed the role of legal systems in enhancing hemispheric integration . Two panel
discussions focused on integrating commercial law systems and on alternative methods of solving
private international commercial disputes . For example, the harmonization of trade and commercial
laws, regulations , and practices would facilitate the cross border movement of goods , services, and
transactions -- this could reduce the costs of doing business and reduce the potential for corruption.

• Panelists emphasized the importance of small and medium-sized enterprises (SMEs) to the process
of job creation and hemisphere integration the discussion examined the impediments SMEs are
facing in today. s market and _identified potential solutions that could be implemented by both the
private and pubhc sectors , ind1v1duallyand collectively through the Free Trade Area of the Americas
(FT AA). Panelists urged that the Free Trade Area of the Americas offer SMEs the capability to
effectively compete and that governments must create an environment conducive to growth of SMEs .

• The information marketplace panels focussed on intellectual property rights and the access to
information. In the .midst of a technological explosion, it will be very important to establish
international norms for intellectual property protection. It will require a responsible balan cing of the
interests of the creators in exerc1smg the mtellectual property rights of their works as well as the
interests of users in obtaining access to thoseworks. Information infrastructure will be developed only

xvi
in response to creators and service providers on the one side and consumers on the other. The role
of government will be to adopt rules to promote free and open competition .

• The private sector financing workshop focussed on the continuing need for hemispheric governments
to promote privatization and liberalization of trade and investment as critical steps for attracting
foreign private capital and for expediting economic integration of the hemisphere. Some of the
workshop recommendations--such as continued and sectoral diversification of privatization efforts,
development of capital markets through pension and insurance reform, and improved reapponionment
of risk between project developers, multilateral development banks, and regional governments--were
also echoed in other Forum workshops (e.g ., Energy workshop) . Infrastructure funding is critically
dependent on private capital flows and the related requirement of governments to create environments
that can attract private investment.

• The success of the process of Western Hemisphere commercial integration and free trade - that will
culminate with the creation of a Free Trade Area of the Americas by the year 2005 - depends on
workplace issues such as worker skills, labor-management cooperation, and labor standards that
affect the productivity of the workforce . These workplace issues, in turn, have also an important
bearing on how the benefits of commercial integration and hemispheric free trade are distributed
throughout the labor force.

None of the issues raised during the forum will be resolved overnight, and indeed some may never be capable
of resolution. What is critically important, however, is that a process which recognizes the dynamic nature
of private entrepreneurship and the necessity of includingthe private sector in the negotiations from the outset,
has begun. At the end of the day, closer commercial ties will have been established which will reinforce the
political and economic decisions taken to support the Free Trade Area of the Americas. Practical approaches
to practical everyday problems will be the legacy of this forum and hopefully for the fora of the future, starting
with the 1996 forum in Cartagena, Colombia.

xvu
The Sectoral Recommendations

Western Hemisphere Trade and Commerce Forum


Denver, Colorado
July 1-2, 1995
Recommendationsfor the TelecommunicationsSector

Trade Ministers are encouragedto:

Act to improve information infrastructures -- telecommunications, information technology , and


broadcasting -- identified in the Summit of the Americas' Plan of Action as II an essential component
of political, economic, social and cultural development. 11

Liberalize import/export restrictions within the Western Hemisphere in order to allow the unrestricted
flow of all telecommunications products, including those with encryption capabilities .

Support the work being done on regional guidelines for equipment certification procedures and
common guidelines for the provision of value-added services by Western Hemisphere nations and
private companies in the OAS's Inter-American Telecommunications Commission (CITEL).

Ensure that the working group on services established at the Trade Ministerial in Denver includes all
telecommunications services and coordinates with CITEL to take account of CITEL' s work on value-
added services.

CITEL is encm1ragedto:

Accelerate its work in contrasting and comparing the different legal systems impacting each nation ' s
telecommunications environment in order to understand the system's interrelationship to trade and
information infrastructure issues.

Continue collaborative effort with the International Telecommunications Union (ITU) in pursuit of
common regulatory frameworks, technical standards, equipment certification procedures , and
guidelines for basic and value-added services based on the principles of non-discrim ination ,
transparency and objective criteria.

Analyze problems associated with the provision of international satellite services.

Individual Governments are encouraged to:

Ensure universal access to existing and emerging telecommunications technologies, including


alternative technologies , removing all technical and administrative barriers to such access .

Create awareness that the introduction of competition and open markets requires that clear and stable
Jaws, regulations and policies with adequate safeguards must be put in place.

As soon as possible, and not later than 2005, adopt new telecommunications legislation in all countries
of the Western Hemisphere, allowing competition and authorizing free entry into intra-country
markets.

As soon as possible, and not later than 2005, adopt new regulatory structures in all countries of the
Western Hemisphere, separating the regulatory entity from the telecommunications operator and

3
modifying existing regulatory frameworks to allow a smooth transition from curreru controlled
traditional mar el mechanisms ro open. competitiYe markets.

Establisha regulatory frameworkcapable of adjusting to technological change to ensure the protection


of inellectual propeny rights, privacy and security of information.

Plan phased rare-rebalancing in order to to cost-based rates, and seek improvement in the
evolve
international senlemems process .

Review radio spectrum planning and managemeru and current standards-setting processes in order to
increase speed and responsiveness to markets, and reduce discretionary use of authority .

Support a strengthened role for CITEL in fostering cooperative efforts with the ITU to ensure
maximum network and equipment compatibility and interoperability.

Participateas full members in the egotiatiag Group on Basic Telecommunications Services ( GBT)
in the World Trade Organization (WTO), scheduled to complete its talks on trade of basic services
by April 30, 1996.

At the nexr meeting of trade ministers in Colombia, identify telecommunications, information services,
and broadcasting as critical elements for establishing the Free Trade Area of the Americas and for the
achievement of social and economic progress.

The Private Sector is encouraged to:

Establish a private sector working group of Western Hemisphere company representatives to develop
a common regulatory framework for effective introduction of competition, which will be presented
at the 1996 Ministerial Meeting to be planned by CITEL.

Acknowledge that education is the principal tool to spur development, initiate several pilot projects
on distance learning and remote education, and seek support from Western Hemisphere companies.

Seek a wider base of support for the Americas Healthnet and AgriNet Americas Pilot Projects, which
have been initiated by Caribbean/Latin American Action (CLAA), in collaboration with the Pan
American Health Organization (PARO), CITEL, private telecommunications and medical related
companies, the Inter-American Institute for Cooperation on Agriculture, private companies, and other
groups.

Recommendations for the Energy Sector

Governments need to assure monetary stability, if objectives for private investment in infrastructure
are to be met;

Governments must create ~ stable regulatory enviroment for the energy sector that facilitates
investments and that 1s consistent among states and nations;

4
Governments should foster policies that are conducive to the existence of a competitive and transparent
energy sector;

Where countries chose to retain national energy companies, to examine the complex issues related to
participation of state-owned companies along with private ones in a competitive, transparent market;

To encourage governments to emphasize demand-side management, including energy efficiency, in


order to reduce the amount of additional capacity needed;

To promote the parallel development of capital markets and the opening of the energy sector to private
sector participation, through pension and insurance reform among other measures;

To facilitate hemispheric integration through regional grids and pipelines;

To encourage multilateral development banks to develop alternative financial instruments to support


private infrastructure projects;

To pursue the development of multilateral investment treaties to reapportion risks for project
developers and improve the efficiency of project transactions;

To promote information exchange among all participants in the domestic energy sector;

To create a hemispheric forum of utility regulatory commissions to discuss technical, economic, and
policy issues .

To encourage the establishment of regulatory research centers to disseminate research on regulatory


issues pertaining to the energy sector.

To encourage universities to include the public utility field in the curricula for technical, economic,
legal, and public policy studies.

Recommendationsfor the TransportationSector

Support and encourage the convening and work of the proposed Hemispheric Transportation
Ministerial Meeting, which would develop further the concepts articulated at this workshop and the
October 1994 Tampa pre-Summit Transportation Conference . Continued senior level involvement
in cooperative efforts is required to ensure their success.

Governments should keep the economic regulation of transportation and related services to the
minimum necessary to meet public policy objectives, and should rely to the maximum extent possible
on market forces to determine the mix of services and prices to be offered . It was suggested that
multilateral initiatives should be launched to liberalize all modes of transport services, but especially
open skies for air services.

5
Adopt, as a minimum international standards for safety and environment in the construction of
transportation infrastni'cture and equipment, and for operations in all modes of transport, ensuring
minimum costs to communities.

Governments of the hemisphere should jointly explore ways to reduce unnecessary rules and
regulations, and barriers that impede cooperation among transportation firms of different countries
and entry to transport markets.

Raise governments' awareness of the commercial costs of theft, armed boardings, and hijacking and
encourage them to support private sector efforts and to become involved in hemispheric and
international efforts to improve transportation security.

Encourage governments to join international efforts to facilitate the movement of goods and people
across borders by streamlining and harmonizing customs, inspection, and clearance procedures
wherever possible and through the introduction of new technologies, such as electronic data
interchange, and the elimination of unnecessary requirements.

Encourage the exchange of informationon the region's transportation systems and services, including
regulatory regimes, traffic data, and operating requirements.

Encourage the exchange of information between firms so the private sector can develop the mo t
efficient ways to transport goods and people.

Encourage governments to work with international financial organizations, such as the World Bank,
the Inter-American Development Bank (IDB), and the International Finance Corporation (IFC) and
private financing groups to develop innovative ways to finance infra tructure projects vital to the
hemisphere's transportation system.

Examine alternatives for governments and/or the private sector to provide safeguards for long-tenn
private investments m mfrastructure concessions.

Encourage the harmonization of surface transportationlaw with regard to liability for damage to goods
and third parties through the development and use of a uniform truck bill of lading.

Recommendations for the Agribusiness Sector

Agricultural issue_sshould be given priority in negotiations leading to the creation of the Free Trade
Area of the Amencas FTAAAA( Governments should try to resolve these issues early in the ten-year
process, rather than wait until the end.

All countries
. in the. hemisphere
. should move rapidly to implement all Uruguay
uguay R ound agncu ltural
traderequirements,111clud111gthose related to market access• subsidies and sanuary an p hytosarutar
· y
measures.

6
Further discussions of agricultural issues, and the development of appropriate solutions, should take
place in other fora, including the following:
Working groups established by the Western Hemisphere Trade Ministerial, June 29-30 , 1995.
Meetings of the Inter-American Board of Agriculture (IABA). Ministers of Agriculture will
meet as the Board in September, 1995 in Costa Rica .
Second Annual Hemispheric Conference on Agribusiness in the Americas , Miami ,
December 4-6, 1995.
Customs/Trade/Finance: Symposium of the Americas, Miami, February 25-27, 1996.

The following issues should be addressed by the Working Group on Sanitary and Phytosan itary
Measures:
Harmonization of measures, to reduce trade impedimentswhile protecting human, animal and
plant health and safety.
Formal recognition of equivalent measures .
Elimination of sanitary and phytosanitary measures that function as trade barriers but have
no scientific justification.
Improvements in transparency of measures and in enforcement mechanisms .
Quarantine and inspection delays - improvements in procedures, especially for perishables.
Reformed and streamlined approval procedures for adding new products for permissible
import.
Establishment and maintenance of mutually-recognized pest or disease-free zones.

The following issues should be addressed by the Working Group on Subsidies, Anti-Dumping and
Countervailing Duties:
Appropriate disciplines on assistance to low-productivity agriculture.
Reduction or elimination of export subsidies and other trade-distorting subsidies and market
interventions.
Improvements in the administration of antidumping and countervailing duty laws .

The following issues should be addressed by the Working Group on Standards and Technical Barr iers
to Trade:
Harmonization of food product labeling regulations .
Harmonization of agricultural product grades and standards.

The following issue should be addressed by the Working Group on Market Access :
Phasing out of tariffs and other market access barriers .

The following issues should be addressed by the Working Group on Customs Procedures and Rules
of Origin:
Making drug-related inspections less disruptive to legitimate trade, especially for perishables.
Rules of origin and product classification .

The following issues should be addressed by the Working Group on Smaller Economies :
Maintenance of access to U .S. and other markets now enjoyed on a preferential basis by
many smaller countries, e.g., under CBI or GSP .
Possible adjustment assistance or special transitional provisions for smaller economies .

The following issues should be addressed in connection with Agrinet-Americas:

7
Lack of continuity andcross-country communication for private sector input into commercial
integration negotiations; need for instirutionalization of hemispheric-wide private-sector
advice.
Lack of timely, comprehensive agricultural market information that is readily available to
small and medium-size agribusiness enterprises in the Western Hemisphere

Appropriate negotiating fora should be identified to address the following agricultural issue :
- D ispute resolution mechanisms that would cover conflicts arising our of sanitary and
phytosanitary measures, marketing orders, and other agricultural policies.
Environmental and sustainable agricultural issues.

Hemisphere -wide mechanisms should be established for private-sector input to the deliberations of the
Working Groups and other negotiations leading to the creation of the FTAAAA.

E ach country in the hemisphere should adopt appropriate economic policies that will support
hemispheric integration, including the following:
Sound macroeconomic policies leading to economic stability and a predictable framework for
improving trade.
Deregulation, privatization andother economic reforms to improve competitiveness. through
greater productivity and economic efficiency.
Improvements in transportation infrastructure, and reform of domestic and international
transportation regulation, to improve productivity and lower costs.

T he mov e toward greater integration should be accompanied by a convergence of existing trade


agreements, which can impose duplicative or conflicting requirements on agnbusiness enterpri es and
governm ent agencies. A useful first step would be a survey of these agreements on agriculture in the
he misph ere , to assess the need for harmonization or convergence under the FTAA
AA.

Recommendation s for the Tourism Sector

Political/Economic Impartance

That all governmen ts should . recognize that the travel and tourism industry is· a very strong, an , in
some coun tr ies , .the mos t lmportant tool for. providing
. employment expo r gro · 1 an
an regiona
national econorruc .development
. . through foreign, mvestrnent and trade • Pre si ents s ou give pnon·
to travel and toun sm within the governments international trade policy and planning.

That the participat ing countries of The Hemispheric Trade and Co F th


· th · · th Hi mmerce orum e 1evate e
national toun sm au authoritiesto e 1ghest leve l within their go . the
. . . vernments, as reflected m e
Declaration of Orl ando from the Hem1sphenc Tourism Ministerial The .
· · · •
Aires durmg the Exec utive ounc 1l Mee tmg of the United Nations /W
and e Declaration of Buenos
. .
(UN/WTO). or 1d Tounsm Orgaruzauon

Given the instrumental role of the U .S . Travel and Tourism Administration


. . .
coordinator for the hemispher ic tourism fac ilities; and given Administration
(USTT A) as the pnmarY
negative repercussions that could

8
occur at this particular time in the hemispheric negotiation process; we hereby request on behalf of
all private sector tourism representatives that the Secretary of Commerce do whatever possible within
his reach to keep the office of the USTT A funded , as it is instrumental in furthering commercial
integration in the travel and tourism industry throughout the Americas .

That to ensure continual tourism growth and development, governments must preserve and protect the
natural resources of the area (sustainable development).

Policy Coordination

That each country organize a private entity that will unite all the private industries which are Jinked
to travel and tourism. This organization should be in charge of lobbying for the industry with the
different governmental agencies.

That periodic regional meetings of governmental tourism authorities, non-profit organizat ions and
private sector industry representatives be held to discuss the development of a hemispheric tourism
policy, incorporating challenges to be addressed for commercial integration .

Hannonization Measures

That, to facilitate the harmonization for measurement of tourism flows throughout the hemisphe re ,
governments are encouraged to adopt the UN/WTO Definitions and Standards.

That the countries from the Hemisphere should make an effort for harmonizing their foreign
investment legislation. The Guidelines on the Treatment of Foreign Direct Investment developed by
the World Bank Group should serve as the basis for this undertaking.

That countries negotiate bilateral treaties among themselves on the protection of foreign investment
and avoidance of double taxation.

Eliminationof Barriers/Facilitation

That tariff and non-tariff barriers which directly or indirectly prevent the circulation of tourism -related
goods and services be eliminated, including restrictions on promotional and exhibition materials.

That tariff and non-tariff barriers be eliminated which directly or indirectly prev ent the flow of
travelers, such as visas and departure fees .

That governments should emphasize the security of people traveling to their countries as well as the
general stability and security for investment.

That at least some portion of the value added taxes be returned to the travelers purchasing retail goods
exported from the country, in an uncomplicated way .

That governments strongly support a policy of open skies to all airlines that comply with all security
regulations.

9
That governments encourage joint airline traffic programs for more efficient flows of travelers and
encourage the privatization of airports and related services to reduce costs to the travelers and the
airlines involved.

Marketing

That the primary focus of each area's tourism strategic marketing position and promotion should be
the area's culture, inclusive of the people, as well as the local, regional , historic, and geographic
attractions, thus capitalizing on the genuine and unique local flavor of the area .

That each country establish policies that will reinforce the regional tourism exchange .

That governments identify a liaison person/team to be responsible for collaboration with international
organizations, such as Multilateral Investment Guarantee Agency (MIGA) to use technology to share
travel and tourism related information to market investment opportunities in the Americas .

That both tourism providers and consumers throughout the hemisphere be encouraged to use the most
modem information technology. This would effectively unite and enhance the supply and demand of
tourism by increasing the utilization of telecommunication channels and information networks, which
contain large databases of tourism-related information.

Recommendations for the Health Technology Sector

Form international panels to prepare stages and processes for health care technology and services.

Create a profile for each country's needs and requirements for the integration process.

Develop mechanisms for creating partnerships between the private and public sectors in health issues.

Include international agencies, such as the Pan American Health Organization (PAHO) , in the design
of a common strategy to address health integration issues.

Recognize Intellectual Property Rights' (IPRs) social and commercial net benefits.

Harmonize standards for health-related products and services as well as malpractice reform .

Recommendations for the Environment Sector

Recognizing:

That trade, economic and environmental policies are increasingly interrelated .

That environmental regulations as a barrier to trade are a concern to many nations .

10
That environmentalinfrastructureinvesbnent should be considereda key component of every industry
sector and every country's economic development strategy as it will ensure the efficiency and
competitivenessof production, and the social and economicwell-beingof all citizens of the Americas.

That environmentalpolicyshouldbe consistentwith the level of developmentof the country and should
benefit people. Few countries can afford to dedicate energy and resources on wasteful environmental
measures.

That environmentaltraining and capacity building are of great importance.

That environmentalcooperation,education,and technicalassistanceare the best vehicles for expanding


each country's sovereign right to set its own environmentalstandards.

That the participationof the private sector, includingsmall and medium-sizedenterprises (SMEs), and
non-gov.ernmentalorganizations,throughoutthe process is essential.

It is Recommended to Trade Ministers that:

Sustainable development be incorporatedinto the formal working group process, in each of the work
groups,throughoutthe discussions of trade integration. Sustainabilityshould also be made an integral
part of existing multi-lateral institutions and their treabnent of economic, political, and social issues.

Governments incorporate the participation of private sector, includingSMEs, and non-governmental


organizations into the environmentaland trade law makingprocesses.

Governments increasethe enforcementof their own country'senvironmentalregulations and encourage


industries to participate in voluntary environmental management, self-auditing and self-policing
initiatives.

Governments encourage their industry to participate in the ISO 14000 process and other voluntary
pollution prevention and control initiatives thereby reducing the need for command and control
environmental legislation.

Governments act to ensure that environmentalprotection standards and regulations do not represent
unfair and unacceptable barriers to trade.

Governmentsin the hemisphere discuss and identifyappropriate means to encourage industry to adopt
policies of sound environmentalstewardship.

It is Recommended to Appropriate Government Officials that:

Eachcountryidentify, in concert with the private sector and non-governmentalorganizations (NGOs),


its own environmentalprioritiesand presentthoseprioritiesto the meeting of ministers at the Sustainable
DevelopmentConferenceto be held in Bolivia in 1996.

Regional institutions, such as the Commission on Environmental Cooperation (CEC) and OAS, be
strengthened to ensure appropriate collection, analysis and dissemination of basic environmental
information.

11
Environmentbe integratedinto education programs in elementary schools for example, as a wa to help
educate society and as a first step toward required environmental awareness throughout the hemisphere .
Environmental awareness should also be increased through greater dissemination of environmental
information .

A hemispheric conference (perhaps a Specialized Conference of the Organization of American States)


be held on the identification and follow-up policies of environmental concerns of hemispheric nature
(e .g ., how to deal with transboundary environmental issues, continental transportation of toxics ,
management of migratory species and their habitats).

Governments throughout the hemisphere encourage multi-lateral and major government lending
institutions to make environment, particularly institution building (e.g., technical training, information
exchange, technology demonstrations, etc.), a higher priority.

Countries be encouraged to endorse and implement global environmental treaties .

12
The Workshop Summaries

Western Hemisphere Trade and Commerce Forum


Denver, Colorado
July 1-2, 1995
SECTORAL WORKSHOP I:
''BUILDING THE FOUNDATION OF A HEMISPHERIC
INFORMATION INFRASTRUCTURE"

Summaryofof Discussions

There was general agreement that, at present, the telecommunications industry is "marked by impressive
technological advances, sweeping regulatory changes, and rapid moves towards free markets, " in the words
of Ernst Burri, President of CODETEL in the Dominican Republic, and the Moderator of Panel 1. All speakers
presented statistical evidence of the economic growth that has resulted from competition, privatization, and
liberalizationin the tekcommunications sector. Some panelists discussed existing barriers that inhibit market
access and growth, which include technical barriers, unauthorized use of the network, lack of network access,
competitive disadvantages of developing nations, trade barriers, "knowledge" barriers, and adequacy of
current technowgies to create the global networks of the 21st century. Panelists agreed that critical and timely
efforts are needed to find a way to address these barriers creatively in order to attain hemispheric economic
integration by 2005.

SUMMARY OF PANEL 1: "NEW TECHNOLOGIES: SHAPING THE INFORMATION


INFRASTRUCTURE FOR HEMISPHERIC ECONOMIC INTEGRATION"

The first panel was introduced by Secretary of Fourth, access to networks by customers
Commerce Ron Brown, who stressed the must be improved. Alternative methods
fundamental relationship of the information of access (calling centers, cellular) should
infrastructure to sustainable development in the be considered . An adjustment in the
hemisphere as a whole. current accounting/settlement arrangement
should be considered so that developing
Ernst Burri, President of CODETEL in the countries can better finance
Dominican Republic, opened the panel by telecommunications development .
identifying seven challenges to shaping the
Hemispheric Information Infrastructure: Fifth, the full range of telecommunications
applications should be promoted ,
First, technical barriers must be
eliminated to allow many different Sixth, trade barriers must be eliminated .
communications and computing systems to
work together through open network Lastly, Burri identified the need to
architecture and standardization eliminate "knowledge barriers " through
throughout the region; education and training of both workers and
customers .
Second, security measures and intellectual
property protection must be improved to Fernando Borio, Secretary General of
prevent the unauthorized use of networks. TELEFONICA in Argentina, spoke on the
benefits of fiber optics and digital technologies,
Third, capacity constraints must be using Argentina as a case study. He pointed out
overcome for both current demand and the great disparities in telecommunications
future projections. development that currently exist in the
hemisphere. He stated that two different levels of
telecommunications development coexist today,

15
creating a juxtaposition of countries that have Joost van Damme , Vice Pr esident of
reached a very high level of teledensity vis-a-vis TELEBRAS in Brazil, focused on the special
the vast majority of countries , which are still problems facing rural and remote areas . Brazil.
striving for universal service . This juxtaposition in which despite its status as one of the largest
degrees of development requires that the countries in the world has relatively low telephone
regionalization of telecommunications and the pe netration, is experimenting with a number of
effort to incorporate global trends must be solutions to enable ruraJ users to have telephone
analyzed, taking into account the social, economic, service. Cellular, Van Damme said, is primarily
demographic and cultural realities of each country a telecommunications option in urban areas . In
in question, as well as its degree of economic Brazil , expanding cellular to remote areas is too
development. Regional integration must build on costly . Single channel radio and satellite
the common denominators we share, including the communications have been good solutions in some
need to develop the most efficient networks part s of Brazil. Satellite linkages are very
possible. One common denominator today is the expe nsive aJso, but Brazil is making the
move to digital communications and fiber optic investment.
cable. Since privatization in 1990, the two
regional telephone companies in Argentina have Repre senting Celumovil d e Co lombia , Maria
made tremendous progress in upgrading and Cristina de Mejia talked about the advantages of
expanding their networks through the use of fiber cellular technologi es . Business today. she
optics. By 1998, both networks will be completely explained, demands timely and reliable acce ro
digitized. inform ation. Citizens also need access to
information to parti cipate fully in democratic
Borio said that in order for telecommunications processes . De Mej ia reviewed the case of
development to occur, a strong legal framework Colombia , where Celum ovil began operating
must be in place in order to encourage investment exactly one year ago . Subscr ibe r growth has been
of capital to finance network development. The tremendous and man y jobs have been created
following basic principles must be established : through the huge growth of cellular in Colombia .
existence of universal basic service; establishment Colombia' s current goal for the year 2000 is
i to
of an integral legal framework for the sector ; achieve 20 telephone lines for 100 people. De
establishment of a regulatory symmetry principle;
MeJia stressed the need for reoulations that are a
limitation of license concessions in terms of
flexible_ as techn ology in order to promote
claimants' actions; establishment of a reciprocity
mnovat1on and to furth er expand nontraditional
principle; establishment of technical and economic
telecommunic ations techn oloo ie . She clo ed by
terms regarding interconnection; establishment of s . •
suggesting that the panel recommend to
an adequate rate system; and determination of
governments to endorse cellular, a well a other
equitable, balanced guidelines to protect
wireless technolo gies, to build the hemi pheric
consumers. He concluded by stating that
mformation infr astructure.
liberalization and competition must be preceded by
defining regulatory framework, whose clear and
equitable rules are based on the principles of legal The next speaker, Maria del Rosario Medero
certainty, reciprocity and symmetry . He stressed Ranzini, President of ANTEL in UrugUay,
that there is a necessity to create a reasonable tariff discussed cellular solutions to rura l and remote
structure based on real costs, and expressed his
locations · u .
ruguay, she explamed, 1denu 1e
lluJar technol ·
sense of a general concern related to the extension ogy several year s ago as a potenua
answer to
of universal basic service and how it can be pro lem of expand ino access
remote custo .
financed.
h . est teleph mers . Whil e Uruguay has one of the
·
A . one penetratio n rates in Laun
menc a this pen tr . ·&
S ome area ' e atton has not been uru1orn1-
s of u
ruguay have speciaJ problems,
16
including lack of electricity and difficult terrain. should move to a system of multilateral equipment
ANTEL, the Uruguayan operator, wanted low-cost testing, so that equipment can be exported and used
technology to provide the last mile via radio. in second countries as easily as possible . Fourth,
Cellular proved to be the best choice. The benefits spectrum management can be better coordinated in
of cellular in Uruguay have been reduced rates, the hemisphere. Use of the radio spectrum should
better coverage, and faster telephone installation. be allocated through competitive processes .
By the end of 1996, the whole country will have Telephone numbering should be coord inated
access to cellular service . Although ANTEL was multilaterally so that future problem s with lack of
not able to privatize in 1992 due to lack of public numbers will be averted .
support, ANTEL still sees private investment as
the key to telecommunications development. Porter highlighted the "convergence of
competition" which must occur : barriers to entry
David Porter, AT&T's Vice President for for both equipment and service must be elimina ted,
Technology and Infrastructure, stressed the legal systems must allow for multip le competi tors
abundance of telecommunications technologies in all services , rights of way must be made
available, including older technologies that can be available to operators, regulators must be separated
used much more efficiently today, such as copper from operators and settlement arrangements mu st
wire. Instead of focusing on the technologies be based on costs . Finally, all providers and
themselves, he reviewed a number of barriers that governments must remember that none of these
inhibit the best use of technology. First, he said improvements means anything if, together , we
that export restrictions on high technology, cannot or will not provide the telecommunic ations
including digital transmission systems, must be services and products that c1t1zens want;
removed. Second, hemispheric equipment customers' needs cannot be ignored .
standards should be coordinated. Third, the region

SUMMARY OF PANEL 2: "TELECOMMUNICATIONS POLICY AND REGULATORY


STEPS TO ACHIEVE ECONOMIC INTEGRATION IN THE AMERICAS"

General themes discussed by all panelists in the service, which was descr ibed as "mor e
second panel were the following: service to more people in more towns;"
and
Privatization or impending restructuring of
the telecommunications entity and the The need to address complex policy
percentage of annual economic growth issues, such as rate reb alancing and
that has resulted; eliminating subsidies for local service .

The benefits of new legal and regulatory Specific comments from the speakers included:
frameworks that separate the operator
from the regulatory body; Claudio Garcia, Senior Corporate Vice
President and Chief Financial Officer of
The amount of annual investment in the Compania de Telefonos de Chile, stated
telecommunications network provided by that without privati zation of
private companies and the resulting telecommunications in Chile in 1988,
growth of the network in terms of the which resulted in 6 percent economic
penetration rate; growth annually over the past 10 years ,
telecommunications would have been a
The constant necessity to balance the need bottleneck for economic growth in Chile;
for competition with the need for universal

17
Jaime Chico Pardo, Director General of (4) How to balance asymmetries in the
TELMEX, asserted that although U.S. degrees of development and openness of
companies are permitted to offer some developing countries in contrast with
telecommunications services in Mexico the existing limitations on openness in
under current U.S. law, TELMEX is no~ some of the developed countries?
allowed to enter the U.S. market;
(5) Finally, how to develop mechanisms to
Rolando Rivas, Director General of implement the principles proposed in the
TELCOR in Nicaragua, stated that Global Information Infrastructure initiative
although Nicaragua has been moving in a fashion to guarantee the equality of
toward privatization and liberalization opportunities and justice for all countries
since 1992, very few neighboring in the world?
countries have been involved in similar
activities, despite the Buenos Aires Soriano stated that these questions point towards
Declaration and the Declaration from the the critical issue of ensuring that all countries
Summit of the Americas endorsing simultaneously adopt regulatory frameworks for
competition in the telecom sector; and telecommunications that are sufficiently flexible.
In light of these questions, he proposed studying
Jorge Kunigami, President of the possibility of creating a new global regulatory
OSPITEL, discussed "investmentwithout framework in the form of a treaty or international
borders in Peru," which permits foreign convention or agreement to which the majority of
investment in all new technologies. He countries would adhere, which would contain
stated that in Peru, vertical integration is internationally accepted rules governing the
allowed in all telecom services that are creation of a physical and conceptual global
provided by the same operator. Thus, in infrastructure, which will serve as the frame of
terms of telecom sector growth, a 20 reference for national and regional development
percent yearly increase is estimated for the for the service of all, and would also be consistent
following four years. with the Forum's objective of regulatory flexibility
in the development of a genuinely global
In his presentation, Jose Soriano, Director information infrastructure. One means among
General of CONATEL in Venezuela, said that many would be to restrengthen the growth of the
some countries have raised important questions International Telecommunications Union (ITU),
regarding the growth of national information OAS's Inter-American Telecommunications
infrastructures. These include: Commission (CITEL), WTO, and other
multilateral organizations that are considered
(1) How to prevent predominance in beneficial fora in which to discuss GIi
interhemispheric relations of those development.
countries that are rich in technology over
those that are not? At the end of the discussion, U.S. Department of
Commerce Assistant Secretary Larry Irving
(2) How to promote technology transfer and introduced the proposal for the endorsement of two
the development of human resources? pilot projects, Americas Healthnet and AgriNet
Americas, and encouraged Latin American
(3) How to resolve the problems of national companies to join U.S. companies to ensure their
sovereignty that arise in provision of future success. The Americas Healthnet program,
cross-border services? which is currently underway in Costa Rica, will set
up a network connecting rural areas to six hospital
locations in the metropolitan medical center. The

18
AgriNet Americas initiative is an effort to make network development if the goal of universal
new technologies, market information, and other service is to become a reality. Equitable guidelines
resources on agricultural trade and investment to protect the consumer and to ensure equal access
availableto small, medium, and large agricultural to the network must be established .
companiesin the Western Hemisphere through the
developmentof an electronic network. These pilot In the discussion on the second day, building upon
projects will be led by Caribbean/Latin American a recommendation made earlier by Jose Soriano
Action (CLAA), in collaboration with the Pan regarding the creation of an international
American Health Organization (PAHO), CITEL, regulatory system upon which to create a Global
private telecommunications companies, medical Information Infrastructure, Maria Cristina de
relatedcompanies, the Inter American Institute for Mejia made a formal proposal that a private sector
Cooperationon Agriculture, and other groups. In group be formed to follow up on the
addition, there was a proposal to initiate several Recommendations that emerged from the
pilot projects on distance learning and remote Workshop. Specifically, she proposed:
education, and to seek support for them from
Western Hemisphere companies. "The adoption of an interamerican convention or
treaty that contains the necessary points to ensure
Conclusions the realization of the principles of
telecommunications, adopted by the Hemisphere's
There was general agreement that effective Presidents at the Summit of Miami, which will
regulation, competition, and liberalization of the make it possible for the creation of the information
telecommunications environment will allow superhighwayto become a reality on the American
telecommunications to serve as an engine of continent, for the benefit of all its inhabitants .
growth for national economies. Three pilot
projects involving health care, agribusiness and Within the spirit of the Miami meetings and as the
distance learning were supported by Workshop most effective means, a Committee of
participants, and recommended as interesting telecommunications business leaders [should] be
future telecommunications activities. formed, which will elaborate and present a plan of
work, [in the form of] a treaty, as deemed
There was concern expressed regarding the appropriateby the Forum, that will assume all the
provision of universal service and its financing, costs that are required for its work."
with general concurrence that rational tariff
structures must be put in place with advance It was agreed that this private sector working
planning for phased rate adjustments. Workshop group of Western Hemisphere company
participants agreed that liberalization and free representatives will work to develop a common
markets require defining the rules of competition regulatory framework for the effective introduction
in advance, with agreement on the technical and of competition,which will be presented at the 1996
economic terms for interconnection, and clear, MinisterialMeeting to be planned by CITEL. The
firm regulationsto guarantee institutional stability. first meeting of the working group will take place
Legal systems governing the information in Colombia.
infrastructure must be in place in order to finance

Recommendations
These recommendations were elaborated to White Papers on "Building the Foundation of a
complement and reinforce the Declaration and Hemispheric Information Infrastructure, " which
ActionPlan of the Summit of the Americas and the were preparedfor the Summit of the Americas and

19
the Hemispheric Trade and Commerce Forum. pa rts of the Information Infrastructure W,or shoip

These documents are considered to be integral conclusions and recommendations, which s
follow.

(ITU) in pursuit of common regulatory


Trade Ministers are encouraged to:
frameworks, technical standards
. . n
Act to improve information infrastructures equipment cert, 1cat1on procedures
telecommunications , information guidlines for basic and value added
technology, and broadcasting -- identified services based on the principles of
. . . . non-
in the Summit of the Americas' Plan of discrimination, transparency and objective
• • !Ve
Action as an essential component of
ti
cntena.
political, economic, social and cultural
development . ti
Analyze problems associated with the
provision of international satellite services.
Liberalize import/export restrictions
within the Western Hemisphere in order to Individual Governments are encouraged to.:
allow the unrestricted flow of all
telecommunications products, including Ensure universal access to existing and
those with encryption capabilities. emerging telecommunication s
technologies, including alternative
Support the work being done on regional technologies, removing all technical and
guidelines for equipment certification administrative barriers to such access.
procedures and common guidelines for the
provision of value-added services by Create awareness that the introductionof
Western Hemisphere nations and private competition and open markets requires
companies in the OAS's Inter-American that clear and stable laws, regulations and
Telecommunications Commission policies with adequate safeguards must be
(CITEL) . put in place .

Ensure that the working group on services As soon as possible, and not later than
established at the Trade Ministerial in 2005, adopt new telecommunications
Denver includes all telecommunications legislation in all countries of the Western
services and coordinates with CITEL to Hemisphere, allowing competition and
take account of CITEL' s work on value- authorizing free entry into intra-country
added services. markets .

CITEL is encouraged to: As soon as possible, and not later than


2005, adopt new regulatory structures in
Accelerate its work in contrasting and all countries of the Western Hemisphere,
comparing the different legal systems separating the regulatory entity from the
impacting each nation's telecommunications operator and
telecommunications environment in order modifying existing regulatory frameworks
to understand the system's to allow a smooth transition from current
interrelationship to trade and information controlled traditional market mechanisms
infrastructure issues. to open, competitive markets.

Continue collaborative effort with the Establish a regulatory framework capable


International Telecommunications Union of adjusting to technological change to

20
ensure the protection of intellectual Trade Area of the Americas and for the
property rights, privacy and security of achievement of social and economic
information .
progress .

Plan phased rate-rebalancing in order to The PrivateSectoris encouragedto:


evolve to cost-based rates, and seek
improvement in the international Establish a private sector working group
settlements process. of Western Hemisphere company
representatives to develop a common
Review radio spectrum planning and regulatory framework for effective
management and current standards-setting introductionof competition, which will be
processes in order to increase speed and presented at the 1996 Ministerial Meeting
responsiveness to markets, and reduce to be planned by CITEL.
discretionary use of authority .
Acknowledge that education is the
Support a strengthened role for CITEL in principaltool to spur development, initiate
fostering cooperative efforts with the ITU several pilot projects on distance learning
to ensure maximum network and and remote education, and seek support
equipment compatibility and from Western Hemisphere companies.
interoperability.
Seek a wider base of support for the
Participate as full members in the Americas Healthnet and AgriNet
Negotiating Group on Basic Americas Pilot Projects, which have been
Telecommunications Services (NGBT) in initiated by Caribbean/Latin American
the World Trade Organization (WTO), Action (CLAA), in collaboration with the
scheduled to complete its talks on trade of Pan American Health Organization
basic services by April 30, 1996. (PAHO), CITEL, private
telecommunications and medical related
At the next meeting of trade ministers in companies, the Inter-American Institute
Colombia, identify telecommunications, for Cooperation on Agriculture, private
information services, and broadcasting as companies, and other groups.
critical elements for establishing the Free

21
PanelMembers
Panel One: "New Technologies Shaping the Panel Two: "Telecommunications Policy
Infornation Infrastructure for Hemispheric Regulatory Steps to Achieve Economic and
Economic Integration 11 Integration in the Americas 11

Ronald H. Brown Larry Irving (Moderator)


Secretary of Commerce Assistant Secretary for Communications and
United States Information
Department of Commerce
Ernst Burri (Moderator) United States
President and CEO
CODETEL Claudio Garcia
Dominican Republic Senior Corporate Vice President and
Chief Financial Officer
Fernando Borio Compania de Telefonos de Chile, S.A. (CTC)
Secretary General Chile
TELEFONICA de Argentina
Argentina Jaime Chico Pardo
Director General
Joost van Damme Telefonos de Mexico (TELMEX)
Vice President Mexico
TELEBRAS
Brazil Rolando Rivas
Director General
Maria Cristina de Mejia TELCOR
President Nicaragua
CELUMOVIL de Colombia
Colombia Jorge Kunigami
President
Maria del Rosario Medero Ranzini Organismo Supervisor de Inversion Privada en
President Telecomunicaciones (OSPITEL)
ANTEL Peru
Uruguay
Jose Soriano
David Porter Director General
Vice President for Technology and Infrastructure CONATEL
AT&T Venezuela
United States

22
SECTORAL WORKSHOP II:
"MEETlNG THE ENERGY NEEDS OF THE AMERICAS"

Summaryof Discussions
Theboomingdemandfor power generationcapacity,the continuousnecessityto explorenaturalresourcesin
an environmentaUy-responsible manner,and the urgentneedfor enormousinvestmentsin the energysector are
creatingunprecedented challengesand opportunities for cooperationbetweenall the countriesof the Americas
and the private sector. Overall economic expansion,improvedservicefor energy users, and reduced
government funding outlay, which are the three drivingforces behindthe restructuringof the energy sectors
throughoutthe Americas, would be the prime beneficiariesof such regionalcooperation. Theprivate sector
willbe the keyplayer in our integrationin termsof building,providingequipmentand services, and investing,
whilethe roleof thepublicsectorwillbe thatof a catalystand a regulator. The developmentof a reliableand
predictable hemisphericenergymarketwill inevitablynot only benefitlocaleconomicgrowthbut also improve
hemispherictrade ties.

SUMMARYOF PANEL 1: "HEMISPHERICENERGYINTEGRATIONAND COOPERATION"

"Our economies will be integrated, it is just a Sustainable development concerns must be


matter of when and how. By working together, we an integral part of government energy
have the opportunity to do so with skillfulness and policies to preserve our natural world for
11
hope , said Bill White, Deputy Secretary of future generations.
Energy of the United States.
The panel focused on three key issues : resources
"This is the end of the twentieth century and the and opportunities, benefits of liberalization, and
11
beginning of the twenty-first, said Edgar Romero challenges to cooperation .
Nava, President of the Federation of Chambers
of Commerce and Production of Venezuela. Resources and Opportunities
"The globalization of markets is allowing the
mobility of technology, capital, and human The panelists agreed that economic reform and
resources. " integration are spurring the need for increasing
energy sector investments, which must be met by
The following are the key factors affecting the creating a favorable investment climate.
energy sector in the Americas:
The rate of growth of electricity in Latin
Increasing energy demand as economies American economies will be double that of the
grow; U.S., while the natural gas demand growth will be
quadruple that of the U.S., over the next 15 years.
General acceptance that we are operating
in an international competitive From 1995-2005, the region will require
environment, and need to adapt our $100 billion of project financing in the energy
institutions to meet these new energy sector, including $25-50 billion for pipelines.
needs; and
The private sector will be the key to
meeting these capital demands.

23
- Growing competition among energy which faced neither commercial nor politic .
1
suppliers will lower energy prices or reduce the and were subsidized. risks
rate of increase ; that money can be channeled to
other sectors. Economic development: private
. sector
energy firms oft en actively engage
the
- To be successful, international energy commuruues to spur economic develop
. . ment
firms must develop business alliances with local attracting new m ustnes an JO opportunities '
s.
partners.
Challenges to Energy Integration
The number of trans-boundary gas
pipelines is likely to increase, particularly in the _ A need exists for political will: The
southern part of the continent, bringing together establishment of the regulatory frameworks is not
markets and supplies; due to technical differences sufficient to guarantee succes sful integration·
among countries, trans-boundary electric grids will rather the political will , involvement , and active
not grow as rapidly as the gas network. participation of the government must exist.

Demand for financing energy A need exists for currenc y stability


infrastructure projects is greater than the ability to underpinned by a predictable , stable monetary
provide financing . There is a trend to welcome the system and fiscal balance . A more stable
private sector to compete. monetary environment would reduce risk, thereby
allowing investors to accept a lower return on
Competition between the private sector investment. This would ultimately result in lower
and the national energy provider will develop energy prices.
better, more efficient projects .
Equal, transparent and consistent treatment
The legal framework must provide for domestic and foreign investors , across state and
adequate contractual protection against future legal across national boundaries , should be a
and regulatory changes . hemispheric goal.

The public sector should focus its efforts Governments may need to encourage
on creating a stable framework for the financial progress when market forces are inadequate (such
and regulatory structures in order to attract private as evaluating competing projects (e.g.,
capital, while at the same time respecting hydroelectric versus thermal projects ) to determine
Hemispheric sustainable development. which project best serves the public and addresses
environmental concerns; or by granting the right of
Benefits of Liberalization/Private Sector eminent domain to enable development to proceed
Participation in the public interest.

Capital reductions : with private capital During the discussion period, the Private Sector
inflows, the capital expenditure required by Advisory Committee (COECE) Energy Group of
governments will be reduced, freeing funds for Mexico presented a position paper stating that
other sectors of society. some governments may wish to regulate the
exploitation of non-renewable energy sources to
Experience shows that increased maximize the societal benefits. COECE
competition often lowers electricity rates or underlined the need for balance between patrimony
reduces the amount of rate increases. However , control and economic development when
electricity rates could also rise in certain countries considering private sector participation in the
since private operators replace state-owned utilities energy sector. Aiming at the smaller and

24
developing economies, the Dominican private faster administrative processes and efficient and
sector submitted recommendations both to equitable development and to open the energy
consolidate the regulatory framework promoting sector to private investment.

SUMMARYOF PANEL 2: "CHALLENGESTO ENERGYAND MININGINTEGRATION"

The two key challenges to hemisphericenergy and higher tariffs may be required to reduce that
integration--the needfor capitaland the demand risk, impairing the economic viability of the
for betterservices-- may be resolved by private project.
investmentand greater competition. The overall
challengeis establishingregulatoryandfinancial To reduce the risk to the suppliers of
frameworksto attract scarce capitalresourcesto capital, there needs to be a stable , transparent and
developenvironmentally sustainableprivate energy effective regulatory framework . In addition, to
projects. reduce risks (political, regulatory , credit) , there
are a number of complex transactions being
FinancialChallenges: undertaken. However, these are lengthy, costly
processes. The multilateral institutions are looking
To find ways to raise capital at reasonable into the concept of "wholesale risk reduction"
cost, consistent with long-term development needs which may take the form of a multilateral
and goals. Despite the massive need for energy investment agreement.
infrastructure,there are very few projects actually
in development. The challenge is to attract and There is a need for fully developed
keep globally scarce capital in the region. (completed)domestic capital markets. Long-term
capital exists mostly in the form of foreign
Capital must be available on a long-term exchange, while project revenues are generated in
basis. The multilateral lending institutions have a local currencies, creating risk for Latin American
comparative advantage because they provide countries. A key to reduce this risk is local capital
technical assistance and leverage and enhance market development, the most important element
market activities. of which is pension reform .

There is a greater amount of equity capital Domestic insurance markets need to be


than of debt capital available to finance these developed to address the needs of project finance,
projects. Equity capital investments are high risk, particularly to cover intra-regional investments .

Recommendations
Governments are encouraged to consider the Governments must create a stable
followingrecommendations.We hope thesewill be regulatory environment for the energy sector that
furtheraddressedat the upcoming "Hemispheric facilitatesinvestments and that is consistent among
SustainableEnergySymposium",October2-4, in both states and nations;
Washington,D. C. It was recognizedthat:
Governments should foster policies that
Governments need to assure monetary are conducive to the existence of a competitive and
stability, if objectives for private investment in transparent energy sector;
infrastructure are to be met;
Where countries chose to retain national
energy companies, to examine the complex issues

25
related to participation of state-owned companies - To pursue the development 0 f
along with private ones in a competitive, ·
mvestment treaties to reapportion risksmultilateral
ateral
transparent market· developers and improve the efficiencyfor Project
'
transactions; ncy of Project
To encourage governments to emphasize
demand-side management, including energy - To proz:note information exchange
efficiency, in order to reduce the amount of all paruc1pants in the domestic energy among
additional capacity needed; sector;
To create a hemispheric forum ..
To promote the parallel development of l . OfUtility
regu atory commissions to discuss technical
capital markets and the opening of the energy economic, an po icy issues. ,
sector to private sector participation, through
pension and insurance reform among other - To encourage the establishment of
measures; regulatory research centers to disseminate rese
. . . arch
on re gulatory issues pertammg to the energy
To facilitate hemispheric integration sector.
through regional grids and pipelines;
To encourage universities to include the
To encourage multilateral development public utility field in the curricula for technical
banks to develop alternative financial instruments economic, legal, and public policy studies. '
to support private infrastructure projects;

26
Panel Members
panel One: "HemisphericEnergy Integration Panel Two: "Challengesto Energy Integration"
and Cooperation"
Ambassador Paul Boeker (Moderator)
The Honorable William White (Moderator) President
Deputy Secretary of Energy Institute of the Americas
Department of Energy United States
United States
Peter Greiner
Stephen Chesebro' Secretary of Energy
President and CEO Brazil
Tenneco Gas
United States Raul Garcia
President
Raul A. Aguero Regulator Nacional del Gas
Deputy Secretary for Fuel Argentina
Ministry of Energy
Argentina Douglas Jones
Director
James Bannantine National Regulatory Research Institute
Principal United States
Enron Development Corp.
United States Patricio Perkins
Director, Yacimientos Petroliferas Fiscales
Thomas Boren (YPF) and Country Director, Oppenheimer
President and CEO Argentina
Southern Electric International
United States Antonio Vives
Division Chief, Infrastructure and Financial
Edgar Romero Nava Markets
President InterAmerican Development Bank
FedeCamaras
Venezuela

27
SECTORALWORKSHOPIII:
"TRANSPORTATION:
MOVINGTHE HEMISPHERETOGETHER"

Summaryof Discussions
Panelists and members of the audiencediscussedthe benefitsfrom greater integrationof and cooperation
relatmg to the hemisphere's transportationsystem. They saw substantzalbenefits accruingto the region's
economies from improved and integratedtransportationinfrastructure,more open, Lessregulatedtrade
harmonized technicaland operatingprocedures,and the increaseduse of modem technologies. '

SUMMARYOF PANELJ: "TRANSPORTATION


SERVICES BRING
THEHEMISPHERETOGETHER"

Panelists discussed how improved transportation systems are among the greatest barriers to
services are vital to the economic development and increased international trade.
trade in the hemisphere. It was noted how all
countries of the hemisphere regulate transportation In many countries, restrictions on foreign
to some extent; however, a few nations in the investment in domestic transportation companies
1960' s undertook to begin to deregulate their limit the capital available to improve services are
transportation systems and other nations have a barrier to the creation of strategic alliances
followed this path in the succeeding decades. among carriers to exploit domestic and
Many other countries are now contemplating international markets, and inhibit the development
deregulating and privatizing transportation, but of international intermodal through service .
reform is not universal. Many challenges remain.
There continue to be domestic and crossborder Berriochoa, President, Transportes Inter- Mex
restrictions, limits on the use of foreign and private stressed the importance of harmonizing
capital, and differing approaches to regulation of transportation among the nations over time,
safety and security . through the exchange of e periences, and with
mutual support from all our people. He noted that
There was broad agreement that the nations of the we are on the right track, but hould use caution.
hemisphere should explore how they can work We should not confuse dome tic experience with
together to eliminate or reduce barriers to efficient international needs .
transportation, reduce unnecessary rules and
regulations, and cooperate in implementing new International transportation, he noted, requires its
technologies. Industry and governments should own rules distinct from, yet in harmony with,
also examine what steps can be taken to cooperate domestic rules . International rules should respect
with each other to provide better, safer, and more domestic customs and differences. There is a need
efficient transportation services across borders . for investing in infrastructure, equipment
technology and development, the means . of
In his introductory remarks, U.S. Secretary of production, and training--all of which will bring
Transportation Peña the panel moderator, stated jobs and security, thus, reducing migration.
that the stakes in achieving improved commercial
integration and free trade and the benefits that they Emmett, President, National Ind~str~
can bring to the people of the hemisphere are Transportation League noted that in
enormous, but trade cannot increase and discussionsabout transportation policy it is vitalto
economies cannot grow unless people and goods keep two principles in mind. First, transportation
are moved efficiently. Inefficient transportation only exists to serve customers and second

28
transportation is an arena of constant change with Driscoll, President, National Air Carrier
new technologies and innovative business Association, stated that a sound, well developed
approaches . Shippers need to have efficient, transportation system is essential to the economic
reliable transportation in order to move their goods development of this hemisphere , as well as the
to market and as more and more shippers conduct global economic system, noting that market forces
business in different countries, uniformity becomes must govern the development, not government
very important. regulation. He stated that the scheduled and
charter services offered by airlines in their cargo
He observed that anytime economic regulations and passenger operations are most conducive to
differ from one jurisdiction to the next, there is the recently developed concepts of just-in-time
potential for delays, higher costs, and logistical delivery and point-to-point through services. He
nightmares . Uniformity can be achieved in two supported the governments of the hemisphere
ways: governmentally established rules or reliance making decisions that looked to the future, and
on the free-market system to establish adopting principles resulting in an exchange of
shipper/carrier relationships . Shippers cannot rights which, although time-phased , would in the
imagine a "one world" government dictating end, result in an open skies agreement. He
transportation regulations. Only free markets recommended that the recently concluded U.S.-
provide a workable solution. Canada bilateral could serve as a model on which
similar arrangements with other hemispheric
Viveros, CEO, Tecomar, noted the vital countries could be reached .
contribution of transportation to trade and the
necessity to eliminate barriers and reduce During the discussion period following the panel
regulation. He supported the modernization of the presentations, suggestions were made about the
rules and regulations governing transportation in a need for uniform law and practices , including a
multilateral framework and proposed the uniform bill of lading, uniform insurance
establishment of a working group to exchange documentation, expedited port clearances,
information on the region's transportation systems harmonizationof customs and port procedures, use
and services, to include regulatory regimes, traffic of IMO standards carriage of oil , use of electronic
data, and operating requirements. The private data interchange, prenotification of cargo on board
sector could then make recommendations to arriving vessels, uniform weight and size standards
governments on steps that would eliminate barriers for trucks and containers, an integrated land
and increase competition. He also proposed efforts transportation system in South America and a
be undertaken to build the Maritime System of the uniform maritime system for the Americas.
Americas.

SUMMARY OF PANEL 2: "BUILDINGTRANSPORTATION


INFRASTRUCTURE
FOR THEHEMISPHERE"

Seijas,Chairman, Latin American Delegation to changing too. Its role, as the owner and operator
the American Association of Port Authorities of facilities is declining , while its role as a
and the moderator of the panel, in his opening facilitator in bringing the private sector into the
remarks,said that in the past states have played a process is growing . Governments, as well as the
prominent role in the development of national private sector, are seeking greater efficiency and
infrastructure. The strain on transportation new competitive opportunities. Many countries are
facilities is enormous and governments can no now seeing bothone another and the private sector
longer meet all the needs for the movement of as allies, not solely as competitors, and are
rapidlygrowing trade. The role of government is

29
b ..
begining to work together to solve the problems United States) of privatization to develop
Op their
a nd to build the necessary infrastructure . transport infrastructure.

All of the panelists stressed that one of the crucial Gonzalez , President of Airways Engineering .
needs for development of facilities is funding. As Corporation Group , indicated that the demand
. are growmg
airport facilities n for
. b eyond governments
.....
Governments, international organizations and
international lending facilities are meeting less of ability to meet the need. The concept of
airports
the need, private sources of capital are being development needs to b e repackaged to c
create
sought. Innovative funding is being developed in other revenue generators, such as shop .
. . . . shopp
the private sector to meet some of these needs; concessions, to raw m private mvestors.
however, several speakers noted that more funding
1s needed and that public policy changes may be Silvestrin, Director Executivo of ADTP/Agencia
necessary to create an environment conducive to de Desenvolvimento Tiete Parana , described the
private investment. development occurring in the Tiete Parana region
of Brazil , an area with 100 million people at the
Rannik, President and CEO of the B&R center of the Mercosur . There are $ 50 billion in
Group, after noting the tremendous growth in basic infrastructure projects scheduled for the
trade and the strain it was placing on facilities, region, in the next five years, all to be done by the
stated there are two ways to grow--expand private sector.
facilities and become more efficient. Both require
lots of money for new or improved terminals and Vivacqua, Diretor of Consorcio Operacional do
equipment, as well as the development and Corredor Centroleste , noting that transportation
implementation of electronic data interchange, is the lubricant for development, described the
more efficient inspection procedures, and better Center-East Corridor as an instrument of economic
interface and cooperation among shippers, development for South America. It is a network of
carriers, governments, port operators, and other railroads joining together various regions of Brazil
modes of transport, particularly in the intermodal and providing links to ports and to other South
chain. American countries.

Wolff, President & CEO of Louis Berger During the discussion period that followed the
International, summarized the current situation as panelist presentations it was suggested that the
one with inefficient railroads and ports, Inter-American Development Bank and the World
underinvestment in mass transit, underuse of Bank provide funding for infrastructure
waterways, and underdeveloped intermodal development and that collateral development near
facilities and interregional links. He noted the airports could make investment in them more
need for long term planning by governments with attractive. It was also noted that Argentina ha
private sector involvement, profits and stability of significantly deregulated its railroads and ports
exchange rates that are essential to attract private with dramatic results--less labor , lower cost, and
investment, and the use by some countries greater speed.
(Mexico, Chile, Canada, Argentina, and the

Recommendations
Support and encourage the convening and articulated at this workshop and the
work of the proposed Hemispheric October 1994 Tampa pre-Summit
Transportation Ministerial Meeting, which Transportation Conference. Continued
would develop further the concepts

30
senior level involvement in cooperative borders by streamlining and harmonizing
effortsis required to ensure their success. customs, inspection, and clearance
procedureswherever possible and through
Governments should keep the economic the introductionof new technologies, such
regulation of transportation and related as electronic data interchange, and the
services to the minimum necessary to eliminationof unnecessary requirements.
meet public policy objectives, and should
rely to the maximum extent possible on Encouragethe exchangeof information on
market forces to determine the mix of the region's transportation systems and
services and prices to be offered. It was services, including regulatory regimes,
suggested that multilateral initiatives traffic data, and operating requirements.
shouldbe launched to liberalize all modes
of transportservices,especiallyopen skies Encourage the exchange of information
for air services. between firms so the private sector can
develop the most efficient ways to
Adopt, as a minimwn, international transport goods and people.
standards for safety and environment in
the construction of transportation Encourage governments to work with
infrastructure and equipment, and for internationalfinancial organizations, such
operations in all modes of transport, as the World Bank, the Inter-American
ensuring minimum costs to communities. Development Bank (IDB), and the
InternationalFinance Corporation (IFC),
Governments of the hemisphere should and private financing groups to develop
jointlyexploreways to reduce unnecessary innovativeways to finance infrastructure
rules and regulations, and barriers that projects vital to the hemisphere's
impede cooperation among transportation transportation system, such as ports,
firms of different countries and entry to airports, highways, railroads and
transport markets. interrnodalinterchangefacilities.

Raise governments' awareness of the Examine alternatives for governments


commercial costs of theft, armed and/or the private sector to provide
boardings, and hijacking and encourage safeguards for long-term private
them to support private sector efforts and investmentsin infrastructure concessions.
to become involved in hemispheric and
international efforts to improve Encourage the harmonization of surface
transportation security. transportationlaw with regard to liability
for loss of or damage to goods and third
Encourage governments to join parties through the development and use
international efforts to facilitate the of a uniform truck bill of lading.
movement of goods and people across

31
Panel Members
Panel 1: "Transportation Services Bringing the Panel2: "Building Transportation Infrastructure
Hemisphere Together" for the Hemisphere"

Federico Pnnea(Moderator) Humberto Seijas (Moderator)


Secretary of Transportation Chairman
United States Latin American Delegation to the American
Association of Port Authorities
Guillermo Berriochoa Venezuela
President
Transportes Inter-M EX Derish Wolff
Mexico President & CEO
Louis Berger International
Edward Emmett United States
President
National Industr ial Tra nsportation League Jaak Rannik
United State s President and CEO
B&R Group
Carlos Vivero s Dominican Republic
CEO
Tecom ar S.A. · Jorge Gonzalez
Mexico President
Airways Engineering Corporation Group
Edward Driscoll United States
President
National Air Carrier Association Carlos Roberto Silvestrin
United States Director Executivo
ADTP/Agencia de Desenvolvimento Tiete Parana
Brazil

Paulo Augusto V ivacqua


President
Consortium of the Center-East Corridor
Brazil

32
SECTORALWORKSHOPIV:
"AGRIBUSINESSIN THE FREE TRADEAREA OF THE AMERICAS"

Summaryof Discussions
Workshop participantssaw many opportunitiesfor gains to the entire hemispherefrom greater commercial
integrationThe UruguayRoundagreement,whichbringsagriculturaltradeunder worldtrade disciplinesfor
thefirsttime,fonns a soundfoundationfor thisintegration.Nonetheless,workshopparticipantsidentifiedmany
importantissuesthat trade negotiatorsmust resolvebefore integrationcan becomea reality. Because of the
complexityof many of these issues, and the importanceof agriculture,participants supported giving
agriculturalissuespriority in negotiationsleadingto the creationof the Free TradeArea of the Americas
(FTAA).

Benefitsfrom Hemispheric Integration For the first time, GATI has brought agriculrural
trade under world trade disciplines. This forms a
Benefits fromgreater commercial integration were solid foundation for further integration under the
apparent to workshop participants. As one panelist FTAA. Both NAFTA and Uruguay Round negoti-
put it, "The benefits of a hemispheric free trade ations have shown that a strong agreement in
area are uncontested . Different countries are
11
agriculture is an important component of an overall
productivein different crops , and different coun- trade agreement. But the complexity of agricul-
triesmayharvest similar crops at different times. tural issues will present challenges to trade negotia-
Thisleads to opportunities for gains from trade. tors .
Manycompanies,including some represented in
the workshop,are well on the way to a hemi- Participants supported giving agricultural issues
sphericbusinessstrategy. priority in negotiations leading to the creation of
the FTAA
AA. Governments should approach agricul-
Workshop participants identified substantial market tural negotiations with a "sense of urgency, 11

oppornmities as population increases in the hemi- determined to resolve these issues early in the ten-
sphere,particularlyas incomes rise and nutritional year process, not at the end. In the meantime,
levelsimprove.There is also great potential for a there was strong support for rapid implementation
strongerandmore efficient Western Hemisphere of all Uruguay Round requirements, including
agribusinessindustry in other markets. The market access, subsidies, sanitary and phyto-
hemisphere has 14 percent of the world's popula- sanitary provisions.
tionyet produces25 percent of the world's food.
Regulatoryand Policy Issues
A sidebenefitof greater integration could be the
convergenceof currently-existing trade agreements Workshop participants identified many critical
amongcountriesin the hemisphere . These agree- issues needing resolution, although all did not
mentscan impose duplicative or conflicting re- necessarily agree on the details of how these issues
quirements
on agribusiness enterprises and govern- ought to be resolved . Fora in which these issues
ment agencies. A useful first step would be a could be addressed, and solutions worked out,
of existingagreements on agriculture in the
survey include the following:
hemisphere,to assess the need for harmonization
or convergenceof such agreements under the Working groups established by the
FfAA. Western Hemisphere Trade Ministerial,
June 29-30, 1995.

33
Meetings of the Inter-American Board of protect health and safety. Participants su
faithimp1ementat10nof Uruguaysupported
rapid good-1a1 R
Agriculture (IABA). Ministers of
Agriculture will meet as the Board in requirements. Deputy Under secretary
September, 1995 in Costa Rica. Scbroederreaffirmed the commitment of the US
Department of Agriculture to implement
Second Annual Hemispheric Conference transparent, science-based rules.
on Agribusiness in the Americas, Miami,
December 4-6, 1995. Several participants identified steps that countries
if 1es
could take to promote trade, even 1 their measu
. . Differemt . res
Customs/Trade/Finance: Symposium of were not 1dent1cal. Iuerent countries' measur
the Americas, Miami, February 25-27, could be formally recognized as equivalent for
1996. trade purposes. Specific regions could he
established and maintained as pest-free or disease
Private Sector Tnnut
, free zones, as is now done in parts of the United
States and Mexico. Procedures for determining
Participants agreed on the need for private-sector which products from a particular country may be
involvement in FT AA discussions. Although imported could be streamlined.
meetings such as the Hemispheric Trade Forum
can be very valuable, they suffer from lack of The workshop also identified issues related to
continuity. There is no ongoing formal mechanism enforcement of measures. Quarantine and
for hemisphere-wide private-sector input to the inspection delays are a problem, especially for
Working Groups and other negotiations. perishables. Country-of-origin inspections were
suggested as a solution. The need for control of
Sanitary and PhytosanitaryMeasures contraband traffic in illegal drugs was
acknowledged, but inspections related to drug
Sanitary and phytosanitary measures protect plant, control are often costly and disruptive.
animal and human health and safety, yet they can
also be trade barriers. The Uruguay Round Finally, participants emphasized the need for
agreement reaffirms the right of each country to effective institutions for resolving disputes fairly
adopt the health and safety measures that it deems and quickly. Such institutions would not be limited
to be appropriate, but it encourages the use of to sanitary and phytosanitary measures, but they
international standards and requires measures to be would be especially valuable here. Several
based on scientific principles and supported by participants gave examples of trade-related
sound scientific evidence. It also provides that a regulatory disputes that were not resolved fairly or
country should accept another country's measures quickly, or which are still unresolved.
when they are demonstrated to be equivalent to its
own measures and encourages establishment and Subsidiesand Other Market interventions
maintenance of pest-free or disease -free zones.
Domestic policies that support agricultural
Workshop participants cited the lack of producers can have significant trade effects. Many
harmonization of measures in the hemisphere. countries, both industrialized and developmg,
Participants also identified examples of measures maintain such policies. Examples include, in
that were barriers to trade, but seemed to have addition to export and domestic subsidies, such
little or no justification. Several participants called policies as marketing orders, production quotas,
for the elimination of sanitary and phytosanitary and import restrictions. Participants spoke against
measures that function as trade barriers. Others export subsidies and other subsidies and market
pointed to the need for standards and regulation to interventions that distort trade.

34
Tariffsnnd Quotas
distribute timely, comprehensive agricultural
market information throughout the hemisphere.
The Uruguay Round agreement converts most Agrinet-Americas, under the auspices of
agriculturalimport quotas into tariffs. Developed Caribbean-LatinAmerica Action and the Inter-
countrieswill reduce their tariffs an average of 36 AmericanInstitutefor Cooperationon Agriculture,
percent by the year 2000 and all countries have is sponsoringinnovativeuses of telecommunica-
boundtheir tariffs. The FTAA would lead to the tions for agriculturalmarket and trade facilitation
immediate or phased elimination of all tariffs information.
among the participating countries. Nevertheless
a number of issues need to be addressed in this Environmental
Protection
area. Countries must agree on timetables for the
elimination of tariffs. Rules of origin must be Issuesrelatedto protectionof the environment and
specified,so that market access benefits go only to sustainable agriculture were also mentioned.
participating countries. Customs valuation rules Several participantsspoke of the need to protect
and product classification issues need to be ad- the environment. While not opposed to environ-
dressed. mental protection, some workshop participants
expressed concern that trade negotiators might
ProductStandards pressurecountriesto adopt regulations inappropri-
ate to their stage of development.
Differingproduct standards can also impede trade.
The workshop identified two areas needing atten- Other Policyand RegulatoryIssues
tion. First, food product labeling regulationscan
differ greatly from country to country. Greater The workshop recognized that non-agricultural
uniformity could help trade while still serving policies can also affect agricultural trade. Such
health, safety and consumer information goals. policiesinclude:
Second, harmonized agricultural product grades
and standards would be of great benefit to trade. Soundmacroeconomicpolicies leading to
economic stability and a predictable
SmallerEconomies framework for improving trade;

Someconcern was expressed about issues specific Deregulation, privatization and other
to smaller economies in the hemisphere. For economicreformsto improvecompetitive-
example, many countries now enjoy preferential ness, through greater productivity and
access to the United States market under CBI or economicefficiency;
GSP. A more generalized lowering of trade
barriers might disadvantage such countries, and Improvementsin transportationinfrastruc-
some participants saw a need for special transi- ture, to improve productivity and lower
tional measures. Other examples include the costs;
possibilityof a longer phase-in for smaller econo-
miesor special financial aid to help them adjust to Maritimeregulationsand cartels that raise
free trade in agriculture. transport costs;

Communications
and MarketTnformation Issuesof technologytransfer and intellec-
tual property rights;
U.S. Secretary of Commerce Ronald Brown,
Administration of trade laws, such as
addressing a Forum plenary session, spoke to the
antidumpingand countervailingduty laws.
issue of using telecommunications technology to

35
Recommendations
Workshop participants identified a number of Harmonization of measures to
. . . ' o reduce
critical issues needing resolution, although all did trade unpedunents while protecting
not necessarily agree on the details of how these man, animal and plant health and hu-
.. safety
issues ought to be resolved. The issues should be Forma 1 recogrut10n of equivalent ·
sures. mea.
addressed in one or more of the Working Groups
established by the Western Hemisphere Trade Elimination of sanitary and phytosanitary
Ministerial, as well as in other fora. measures that function as trade
. . . barriers
but have no sc1ent1 1cJustification.
Specific recommendations include the following: Improvements in transparency of mea-
. ea-
sures and in enforcement mechanisms.
Agricultural issues should be given priority in Quarantine and inspection delays _ im-
negotiations leading to the creation of the Free provements m procedures, especially for
Trade Area of the Americas (FTAA). Gov- perishables.
ernments should try to resolve these issues Reformed and streamlined approval
early in the ten-year process, rather than wait procedures for adding new products for
until the end. permissible import.
Establishment and maintenance of
All countries in the hemisphere should move mutually-recognized pest or disease-free
rapidly to implement all Uruguay Round zones.
agricultural trade requirements, including
those related to market access, subsidies, and The following issues should be addressed by
sanitary and phytosanitary measures . the Working Group on Subsidies, Anti-Dump-
ing and Countervailing Duties:
Further discussions of agricultural issues, and Appropriate discip lines on assistance to
the development of appropriate solutions, low-productivity agriculture.
should take place in other fora, including the Reduction or elimination of export subsi-
following: dies and other trade-distorting subsidies
Working groups established by the West- and market interventions.
ern Hemisphere Trade Ministerial, June Improvements in the administration of
29-30, 1995. antidumping and countervailing duty laws.
Meetings of the Inter-American Board of
Agriculture (IABA). Ministers of Agri- The following issues should be addressed by
culture will meet as the Board in Septem- the Working Group on Standards and Techni-
ber, 1995 in Costa Rica. cal Barriers to Trade :
Second Annual Hemispheric Conference Harmonization of food product labeling
on Agribusiness in the Americas, Miami, regulations.
December 4-6, 1995. Harmonization of agricultural product
Customs/Trade/Finance: Symposium of grades and standards .
the Americas, Miami, February 25-27,
1996. The following issue should be addressed by the
Working Group on Market Access:
The following issues should be addressed by - Phasing out of tariffs and other market
the Working Group on Sanitary and Phyto- access barriers.
sanitary Measures:

36
_ The followingissues should be addressed by phytosanitary measures, market ing orders ,
the WorkingGroup on Customs Procedures and other agricultural policies .
andRulesof Origin: Environmental and sustainable agricultural
Making drug-related inspections less issues.
disruptiveto legitimate trade, especially
for perishables. Hemisphere-wide mechani sms should be
Rulesof origin and product classification. established for private -sector input to the
deliberations of the Working Groups and other
The following issues should be addressed by negotiations leading to the creation of the
theWorkingGroup on Smaller Economies: FTAA.
Maintenance of access to U .S. and other
markets now enjoyed on a preferential Each country in the hemisphere should adopt
basis by many smaller countries , e.g., appropriate economic policies that will support
underCBI or GSP . hemispheric integration, including the follow-
Possible adjustment assistance or special ing:
transitional provisions for smaller econo- Sound macroeconomic polic ies leading to
mies. economic stability and a predict able
framework for improving trade .
The following issues should be addressed in Deregulation , privatization and other
connection with Agrinet-Americas: economic reforms to improve compet itive-
Lack of continuity and cross-country ness, through greater productivity and
communication for private sector input economic efficiency.
into commercial integration negotiations; Improvements in transportation infr astruc -
need for institutionalization of ture, and reform of domestic and interna-
hemispheric-wide private-sector advice. tional transportation regulation , to im-
Lack of timely, comprehensive agricul- prove productivity and lower costs.
tural market information that is readily
available to small and medium-size agri- The move toward greater integration should be
business enterprises in the Western Hemi- accompanied by a convergence of existing
sphere. trade agreements, which can impose duplic a-
tive or conflicting requirements on agribusi -
Appropriate negotiating fora should be identi- ness enterprises and government agencies . A
fied to address the following agricultural useful first step would be a survey of these
issues: agreements on agriculture in the hemisphere ,
Dispute resolution mechanisms that would to assess the need for harmoni zation or con-
coverconflicts arising out of sanitary and vergence under the FTAA .

37
PanelMembers
Panel One: "MarketOpportunitiesand PanelTwo: "Regulatoryand PolicyIssues"
Challenges"
Carlos E. AquinoGonzalez (Moderator)
The Honorable James Schroeder (Moderator) Director General
Deputy Under Secretary for Farm and Inter-AmericanInstitutefor
Foreign Agricultural Services Cooperationon Agriculture
U.S. Department of Agriculture
G. AllenAndreas
Salvador Carbo Counselto the ExecutiveCommittee
Board of Directors Archer DanielsMidlandCompany
Bunge and Born Decatur, Illinois, U.S.A.
Buenos Aires, Argentina
MarceloAvogadro
Luis Fernando Furlan UnderSecretary, InternationalTrade Relations
Chairman of the Board Ministryof Foreign Affairs
Sadia Concordia S.A. Industriae Comercio BuenosAires, Argentina
Sao Paulo, Brazil
RonaldBown
Phillip Seng President
President and CEO ChileanExportersAssociation
U.S. Meat Export Federation Santiago,Chile
Denver, Colorado, U.S.A.
His ExcellencyPablo Pereira
John Werner Ministerof Economyand Development
President and CEO, Heinz-Venezuela Managua,Nicaragua
Area Director for Latin America
Caracas, Venezuela

38
SECTORALWORKSHOPV:
"TOURISM:EXPANDINGCOMMERCIALHORIZONS"

of Discussions
Summary
thesectoralworkshop'soverall goal was to addresscommercialintegrationfor this industry. It was divided
intotwopanels,thefirst targeted to identifyand discussimpedimentsto expandingtraveland tourism-related
tradeandinvestment.The secondpanelfocusedon the use of technology for tourismpromotionand the overall
developmentof nationaltourismpolicies to encouragingand expandingprivatesectorinvestment.

SUMMARY OF PANEL 1: "EXAMININGCOMMERCIALINTEGRATIONOF


TOURISMSERVICES"

Thepanel was moderated by Carlos Asensio, development of trade and investment in the travel
President, Aerorepresentaciones Consultores and tourism industry among the hemispheric
Jnternacionales from Argentina. Asensio also countries:
presented the private sector recommendations at
thefinal plenary session of the Forum. The first 1. Create a positiveclimate for private sector
panelist, Minister Lilliana Canale Novella, the investmentin tourism and tourism-related
Ministerof Industry, Tourism, Integration and businesses by eliminating restrictions to
International Trade Negotiations of Peru, investmentsin tourism businesses, such as
established the overall framework for regulatory the double taxation policies which inhibit
considerationfor services, specifically tourism, in profitability and, thus, deter foreign
the expansion of the Free Trade Area of the commercial expansion;
Americas(FTAA). She recognized the enormous
economic contribution that travel and tourism 2. Establish open skies to encourage relaxed
makes to the gross domestic product of all movements of travelers throughout the
countries in the Hemisphere. She encouraged the hemisphere;
advancement of national treatment and non-
discriminatory principles to facilitate the 3. Return value-added(domestic) taxes to the
continuation of the hemispheric growth of this travelers in a simplified manner to
industry. This includes the protection for logos, encourage the expansion of retail services
trademarks, workforce personnel selection and throughout the hemisphere;
profits garnered. She encouraged common
standards for the quality of contractual 4. Raise the level of tourism representation
commitments. She particularly encourage~ the within the government structures to a
need for analysis of the size and volume ofintra- Ministerial/CabinetSecretary level so that
hemispheric trade on travel and tounsm for tourism is equally represented in national
financial agencies to support investment in these policies and actions which affect tourism
services. flows, such as customs and immigration
procedures;
Alfonso Mujica, President, National Chamber
5. Reduce bureaucracy and paperwork for
of Commerceof Chile recognized that tourism is
' . . I tourist immigration and customs
the gateway to a wide spectrum of international
processing; and
trade and investment. He identified six areas that
governments may examine in encouraging the

39
6. Encourage joint airline traffic programs 5. Enhance competition through
for more efficient flows of travelers and differentiation of product not commodity
encourage the privatization of airports to pricing ; and
reduce costs to the traveler, such as the
departure fees. 6. Adopt national commitments to succeed
. . f .
with the expansion o foreign investment
.
Michael Halle, Executive Producer of Tourism and economic eve 1opment using tourism
Technology at Virtual Warehouse in Canada, as a generator.
offered major issues for consideration in
hemispheric commercial integration of travel and Following the presentations, discussions were
tourism: highly supportive and expansive of the panelists:
considerations. Strong recognition of the
1. Modernization of the tourism product, economic power of the travel and tourism industry
concentrating on education and training of was underscored by the encouragement of
people first, and sustainable development governments to make travel and tourism a strategic
second; and economic development priority . Emphasis and
resources need to be made for education and
2. Recognition of the importance that training in the industry . Most of all, all of the
culturalization plays as the core reason for participants supported the premise that sustainable
travel and opportunity for economic development, that is preservation and protection of
development, as unique products; the natural and cultural resources, is integral to the
continuation as well as expansion of the tourism
3. Encouragement of a free enterprise industry throughout the hemisphere. Another
system; major aspect for expansion of tourism is a
public/private partnership for a consumer
4. Make tourism a national priority and protection system for the safety and security of the
emphasize that the private sector has the traveler. Overall , it was considered that the role
responsibility to drive policy; of government is to provide open spaces for the
private sector to creatively develop, without the
inhibiting effects of regulations .

SUMMARY OF PANEL 2: "OPPORTUNITIES


FOR INVESTMENTAND PROMOTION
OF TOURISM-RELATEDBUSINESS11

Caio Luiz de Carvalho, President of the supported the need for a national tourism policy for
Brazlian Tourist Agency, was the moderator for each country to facilitate the federal importance of
this panel. He encouraged governments to see tourism and linkages throughout the hemisphere.
tourism as a social and economic factor in their He encouraged unification of the industry at local
well-being. It should be viewed as the instrument and national levels before successful hemispheric
of redemption for harsh economic conditions. policies can be enacted.
Education of government officials is essential.
Harmonization throughout the hemisphere can Luis Dodero, Vice President and General
better be accomplished by raising the status of Counsel, Multilateral Investment Guarantee
tourism to the Ministerial level and filling the Agency (MIGA), from the World Bank Group,
position with a tourism professional. addressed the harmonization of regulatory
frameworks for investment by recommending the
Merrett Stierheim, President of the Greater guidelines already established by MIGA. There 15
Miami Convention and Visitors Bureau, no need to reinvent the wheel but MIGAwould
'
40
help facilitate this by serving as the catalyst for
Tourism Organization (UN/WTO) . He
such a venture. He also encouraged countries to encouraged that strategic marketing plans be
negotiatebilateral treaties among themselves on the
adopted and that modern information technology be
protection of foreign investment.
utilized. Argentina implemented a strategic
marketing plan in 1992 which has been successful
Adnan Hassan, Global Manager, Investment to date. Minister Mayorga recommended that
Promotion Agency Network at MIGA, countries throughout the America s adopt a
demonstrated the promotion potential for framework for an integrated tourism product,
hemispheric tourism through technology. He aligned on regional and national destination bases.
encouraged the participants to actively engage in He also recommended that positive actions be
joining the technology revolution, lest the industry encouraged on a hemispheric level to ensure that
be left behind. He encouraged the countries to modern information technology be used by both
provide an industry liaison for facilitating the move tourism providers and consumers .
to technologically to communicate the investment
potential and opportunities of the industry. Conclusions

MinisterFrancisco Alberto Mayorga, Secretary Overall, the participants of the tourism workshop
of Tourism of Argentina, reemphasized that were strong in stating the importance of the social
effectiveplanning and tourism policy issues require and economic contributions and the developmental
coordinated decision-making, since tourism cuts role that tourism plays throughout the hemisphere .
across many issues under the review of other Successful harmonization and commercial
governmental agencies such as transportation, integration is dependent upon changes in
environmental concerns, training and human governmental policies which address national and
resource development. He also pointed out that, non-discriminatorytreatment, a relaxed investment
tourism requires a ministerial level recognition environment, and the encouragement of open
withinthe government structure in order to achieve skies. Harmonization can be achieved more
efficient policy coordination, as indicated in both readily if governments commit to raising the
the Declaration of Orlando from the Western position of tourism in their structures to a
Hemispheric Tourism Ministerial and the Ministerial/Cabinet Secretary level and commit to
Declaration of Buenos Aires during the Executive a national tourism policy as part of their national
Council meeting of the United Nations/World economic development strategies .

Recommendations

Political/EconomicImportance That the participating countries of The


Hemispheric Trade and Commerce Forum
That all governments should recognize elevate their national tourism authorities to
that the travel and tourism industry is a the highest level within their governments,
very strong, and, in some countries, the as reflected in the Declaration of Orlando
from the Hemispheric Tourism Ministerial
most important tool for providing
and The Declaration of Buenos Aires
employment, export growth and regional
during the Executive Council Meeting of
and national economic development
the United Nations/World Tourism
through foreign investment and trade.
Organization (UN/WTO).
Presidents should give priority to travel
and tourism within the government's
international trade policy and planning.

41
Given the instrumental role of the U.S. That the countries from the Hemisphere
Travel and Tourism Administration should make an effort for harmonizing

(USTT A) as the primary coordinator for their 1ore1gn mvestment legislation. :the
the hemispheric tourism facilities, and Guidelines an the Treatment of
given the negative repercussions that could Direct Investment developed by the
world
occur at this particular time in the Bank Group should serve as the basi
. s 1or
hemispheric negotiation process, we this undertaking .
hereby request on behalf of all private
sector tourism representatives that the That countries negotiate bilateral treaties
Secretary of Commerce do whatever among themselves on the protec tion of
possible within his reach to keep the office foreign investment and avoidance of
of the USTT A funded, as it is instrumental double taxation.
in furthering commercial integration in the
travel and tourism industry throughout the Elimination of Barriers /Facilitation
Americas.
That tariff and non-ta r iff barriers which
That to ensure continual tourism growth directly or indirec tly prevent the
and development, governments must circulation of tourism-related goods and
preserve and protect the natural and services be eliminated , including
cultural resources of the area (sustainable restrictions on promotional and exhibition
development). materials.

Policy Coordination That tariff and non-tariff barriers which


directly or indirectly preven t the flow of
That each country organize a private entity trave lers be eliminated, such as visas and
that will unite all the private industries departure fees.
which are linked to travel and tourism.
This organization should be in charge of That governments should emphasize the
lobbying for the industry with the different security of people traveling to their
governmental agencies. countries as well as the general stability
and security for investment.
That periodic regional meetings of
governmental tourism authorities, non- That at least some portion of the value
profit organizations and private sector added taxes be returned to the travelers
industry representatives be held to discuss purchasing retail goods expor ted from the
the development of a hemispheric tourism country , in an uncomplicated way .
policy, incorporating challenges to be
addressed for commercial integration. That governments strongl y support a
policy of open skies to all airlines that
Harmonization Measures comply with all security regulations .

That, to facilitate the harmonization for That governments encourage joint airline
measurement of tourism flows throughout traffic programs for more efficient flows
the hemisphere, governments are of travelers and encourage the
encouraged to adopt the UN/WTO privatization of airports and related
Definitions and Standards . services to reduce costs to the travelers
and the airlines involved .

42
collaboration with international
organizations such as MIGA to use
That the primary focus of each area's technology to share travel and tourism-
tourism strategic marketing position and
related information to market investment
promotion should be the area's culture,
opportunities in the Americas .
inclusive of the people, as well as the
local, regional, historic, and geographic
That both tourism providers and
attractions, thus capitalizing on the
consumers throughout the hemisphere be
genuine and unique local flavor of the
encouraged to use the most modern
area .
information technology. This would
effectively unite and enhance the supply
That each country establish policies that
and demand of tourism by increasing the
will reinforce the regional tourism
utilization of telecommunication channels
exchange .
and information networks, which contain
large data bases of tourism -related
That governments identify a liaison information .
person/team to be responsible for

43
PanelMembers
Panel One: "Examining Commercial Integration Panel Two: "Opportunities for Investment
and
of Tourism Services" Promotion of Tourism-related Business"

Carlos Asensio (Moderator) Caio Luiz de Carvalho (Moderator)


President President
Aerorepresentaciones Consultores lnternacionales Brazilian Tourist Agency
Argentina Brazil

H.E. Lilliana Canale Novella Luis Dodero


Minister of Industry, Tourism, Integration, and Vice President and General Counsel
International Trade Negotiations MIGA, Multilateral Investment Guarantee Agency
Peru The World Banlc

Michael Halle Adnan Hassan


Executive Producer of Tourism Technology Global Manager
Virtual Warehouse Investment Promotion Agency Network
Canada MIGA, Multilateral Investment Guarantee Agency
The World Bank
Alfonso Mujica
President H.E. Francisco Alberto Mayorga
National Chamber of Commerce Secretary of Tourism
Chile Argentina

Merrett Stierheim
President
Greater Miami Convention and Visitors Bureau
USA

44
SECTORAL WORKSHOP VI:
''IMPROVING THE HEMISPHERE'S HEALTH
THROUGH OPEN MARKETS"

Summaryof Discussions
SUMMARY OF PANEL I: "INTEGRATING THE HEALTH CARE INFRASTRUCTURE"

AmbassadorSonia Picado from Costa Rica was respond to the changing needs in the health care
thefirst speaker at the opening day of the health environment.
care workshop. Her remarks focused on the
emergence of democracy in Central and Latin Valencia used telemedicine as a classic example in
America, which has strengthened strategic which international collaboration between users
alliancesamong the private sector, universities and and manufacturers is necessary in the development
governments in building better health care systems of telecommunication and information systems for
in the region . She spoke of the dramatic changes distributing and sharing medical knowledge.
in governments throughout Central and Latin However, be emphasized that, telemedicine
Americaover the past 30 years. The political applications should be gradually and
instabilities severely damaged the budgets and homogeneously brought to the market, resolving
resourcesavailable to universities. However, the such issues as costs, reliability, appropriateness
currentpolitical stability within the region has and user acceptance. This way, he said, we can
intensified the university systems which are reduce the financial impact of applying new
importantto the development of health care trade. technology by appropriate use.
She gave an example of international links of
telemedicine in Costa Rica. Under a stable In closing, Valencia emphasized that we must
political climate, her country is engaged in a pilot focus on technologies that produce meaningful
program connecting local universities with private services. Telemedicine may be a catalyst of a
hospitals in the U.S. to disseminate medical closely related andcommunicated new medical era
informationfrom urban to rural areas within Costa created by strategic alliances between governments
Rica. and private organizations, including users and
manufacturers.
Dr. Pablo VaJencia from the University of
Californiawas the moderator for the first panel. Next panelist was Dr. Brandling-Bennett,
He provided some insights into the rapid Deputy Director, Pan American Health
emergence of medical technology which has Organization. He indicated that health issues are
generatedfinancial incentives and pressure for expanding from the national to the international
manufacturers of medical instrumentation to realm and are no longer just personal or local
cominuously develop innovative products. coocerns. He stated that much of the rising health
Unfortunately, he pointed out that the result is the care cost is attributable to waste and is based on
decisions made without adequate information. In
continuous development of products which are
his statement he pointed out that communication
oftenuseless, expensive and inefficient.
and information is the foundation of good public
health practice. It is essential for health workers in
Tobring efficiency into the marketplace Valencia
all countries to have access to the information
suggeststhat strategic partnerships be established
superhighway if we are to improve the world's
amongusers and manufacturers to bring medical
health.
technologies that will improve efficiency and will

45
Furthermore, increasing health care costs make it environment. He pointed out that the
. . . f ·1· purpose
telemed1cme 1s to ac1 ltate the available. of
imperative to develop cost-effective systems to . . I . a
produce accurate and timely information for technical, an d c Iclinicalmiormation to of
decision makers and to train the professionals who practitioner, so that patients may be at thelocal
.. assured
will implement the decisions. In addition, receiving de fim1t1ve diagnosesand treatment of
. 1 . .
prevention and control of disease require cost most appropriate ocat1on with the lowest Possible.
effective and accurate disease monitoring at the cost. However, Rawson suggests that telem /? 1e
local, national and international levels. should consider cost-effectiveness as a priority
candid assessment of the actual cost/benefit · A
should
Brandling-Bennett pointed out that although there be completed, to ensure that the net result .
. IS to
!s a wide recognition of the importance of reduce the overa 11costs o f medical care.
information and networking systems, few have
been used to improve the health of the global He also stated that telemedicine accounts
. 1or
communities. Even in telemedicine, this several success ful expenments and special
. those 1
technology is centered on clinical rather than emphasis was given to ose that grow from
preventive medicine. Therefore, PAHO is regional applications to national and international
participating in initiatives aimed at making the links. Regionally, . telemedicine can support
current networking systems more accessible to the clinical dec1s1on-making m remote sites, often
improvement of health care. including decision-making by paraprofessional
personnel as well as qualified medical practitioners
One such system is called "A Global Health such as physicians and nurses. Also, telemedicine
Network (GHNet) Targeted Towards Disease can be used to communicate between specific
Monitoring and Forecasting." This system was countries. In addition, through telemedicine
built through strategic alliances between leading caregivers in one country may refer to high];
scientists from academia, health agencies (WHO specialized clinicians in another country. In a
and PAHO), the U.S. Government (NASA), regional/international environment, the same
multilateral financial agencies (The World Banlc), concept may be implemented within a region, such
industry (IBM and A TT), and the Pan American as Central America, or irl sectors of Latin America
Public Health Network (PAPHN) and the such that a regional referral center may be
Laboratory Center for Disease Control (LCDC) established with technical expertise in one or
Canada. Components of this system include several clinical areas.
distance education in health; networking of non-
government organizations concerned with health; Next, Dr. Jorge Solorzano Mosqueda, Director
and establishment of an electronic research and General, Hospital Sante Fe, S.A. de C.V.,
health information server. Other P AHO initiatives Mexico, addressed the workshop participants.
to promote improved health care through the Solorzano pointed out that in Mexico a new health
information superhighway include its own Internet care system in being developed and is looking to
"Gopher" and the program for Health Training for provide coverage to the whole population, which
Central America and Panama (PASCAP). will include the over 10 million Mexicans that do
Through such types of networking systems, the not have access to the health care systems right
high costs of transporting and distributing now. To achieve this, Mexico has chosen the
educational technology can be reduced and at the decentralization of services and responsibilities to
same time the accessibility can be increased. the different states and regions.

The next speaker was Dr. Ian Rawson, Senior He noted that it is essential that Mexico encourages
Vice President, Allegheny General Hospital, the participation of the private sector to strengthen
Pittsburgh, PA. He expressed his views on the the combination of the public and private sector:
advantages of telemedicine in the health care promoters of health, and to propose a mechanism

46
that will motivate the creation of administrative pretend that it can be responsible for total coverage
health care systems like HMOs that don 't exist in and total insurance. It should look to participate in
Mexico today. This would strengthen the private shared responsibility with the private sector and the
medical insurance systems, and would help achieve insurance companies .
the goal of providing insurance coverage to all
citizens.The system would also reduce the costs He also talked about the necessity to (1) establish
of coverage. Finally, this would also create a mechanism to create professional standards in the
competitivenessand would result in greater hemisphere, (2) establish a fee schedule of medical
efficiencyandquality of the provided services. service s which could become the basis for
contracts and service agree ments, and (3) establish
Solorzanosaid that the state should look to a Health Rights Commission to deal with the
providingbasic primary and secondary level problem of medical malpractice.
services. He emphasized that the state cannot

SUMMARYOF PANEL2: "BREAKINGTHEBARRIERSTO TRADEAND CREATING


MARKET OPPORTUNITIESIN A HEMISPHEREWIDEFREE TRADEAREA"

Panel 2 addressedthree main topics in the plans under ISAPRE 's, instead of opting for the
frameworkof integration. First, health care government-owned NHSS plan. ISAPREs have
reform and private sector participation in the managed to control costs and membersh ip has
reform. Second,development of pharmaceutical grown from 62,000 in 1981 to over 3.7 million in
researchand delivery, with emphasis in cost- 1994.
efficiency and health outcomes . Third , the
importanceof tradein health goods and services to Caviedes asserted that "the state should guaran tee
increaseaccessand quality of care. access to health to all popula tion, however, this
obligation does not mean that the state should
MarioRafaelCaviedes, Executive President of deliver services, but should prom ote health car e
the Asociacion de lsapres de Chile A.G., was the services and health insur ance to the pr ivate sector .
moderatorfor the second panel. He addressed the The idea is to permit the consume r to choose from
healthcare reformin Chile and the role of the the health services that serves him best. At the
privatesector in the reform. In the 80's the same time, the state should guara ntee the indigent
Chileanhealth care system was reorganized and the vulnerable population access to the system
througha series of institutional and financial through subsidies."
reforms which included: decentralizing the
NationalHealth System Regional Service Areas Caviedes, reemphasized that "there cannot be
and re-groupingthem into the National Health regional integration without private sector
Service System (NHSS). This reform also participation and that the state should promote
established
thelegislative framework and financing collaborationof the private sector in its health care
mechanismsto support the development of pre- system." He also stated that economic integration
paidprivatehealthinsurance plans (ISAPREs) . in health matters will occur when the countries of
the region manage to free themselves from the
Throughthe creation of ISAPREs, workers can enormous bureaucratic burden which exists in
participatein the private health insurance plans. public services, particularly in Latin America , and
Theycanchannel their 7 percent health payroll the only way to achieve this is by means of
deductionsintoone of the pre-paid health insurance promoting private health care services.

47
To illustrate the benefits of public- .
1. When balancing the participation of the . in. the health sector, the panelistPrivate
cooperation
private and public sectors in health care, . .
Brazil, s pubhc-pnvate car 10Iogy project traced
integration processes must take into . d .h frorn
consideration the differences existing in 1960_ the' proJect starte wit a small group of
cardiologists and heart surgeons . This group
the countries. The government and the 1ead
private sector need to work as partners. to the establishment of an institute which muitipl·
itals ied
The view is that the government efforts, into other institutes, hospitalss, and the development
when applied correctly, are fundamental of technology and products related to he
. . an
in preventive medicine and health surgery . The resu lts o f com bning the efforts of
promotion, and constitute a means to the public, private and hospital resources can be
avoid the inequities resulting from the seen in Brazil's outstanding cardiological program
application of private models.
At present there are five Brazilian companies
2. On the morning of July 2, when the which manufacture specialized products in the area
summary and recommendations from the of heart surgery. These Brazilian firms hold
previous day were discussed, several jointly 10 percent of the world market of
panelists and participants provided their disposableproducts for heart surgery . Brazil ranks
views on health care reform. The third in the world in absolute volume of heart
following statement ensued from these surgeries. Brazil's success in developing an
discussions. "The state should guarantee outstandingcardiological program with technology
access to and choice of all health services and product spinoffs show what is possible in the
and subsidies to the economically medical sector when the public, private, and
disadvantaged . However, this obligation hospitals combine their efforts.
does not mean that the state should deliver
all services, but to promote some health Dr. Harvey Bale, Senior Vice President,
care services and health insurance to the Pharmaceutical Research and Manufacturers
private sector. " Association (PhRMA) stated that pharmaceuticals
will play an increasingly important role in
Also during this discussion, Valencia and Hon. providing cost-effective health care solutions for
Mary Collins, former Minister of Health in people in the Western Hemisphere. According to
Canada, objected to the exclusive emphasis in this panelist, increasingly new medicines extend
private sector health care and insurance by productive lives, reduce the economic cost of
Caviedes. They argued that the earlier illness and save costs of hospitalization and
government-supported health system in Chile had surgery. Bale stated that industry invents nine out
provided equitable access to quality care, and that of ten new drug therapies and with the use of
single payer systems such as that in Canada offered increasingly sophisticated techniques is addressing
advantages in cost containment and assured access. today diseases that are among the most difficult to
cure, including cancer, heart disease, AIDS and
Ronaldo Pitta, Treasury Director, from the other infectious diseases. The panelist said that
Accociacao Brasiloira da lndustria Medico - PhRMA companies during 1995 will invest $15
Hospitalar Odontologica spoke about a successful billion in research and development searching for
health sector project in Brazil involving the
new drug cures. Bale contended that intellectual
integration of government institutions, private
property protection is an absolutely needed support
companies and hospitals. It was this speaker's
for investments into new cures. The speaker
contention that the hemisphere is making the initial
argued that intellectual property piracy not only
steps towards a market of promising opportunities
deprives research companies of funds to make
in the area of medical care and technology in the
health sector. needed mvestments in new cures; but in additton'
resources of pirating companies themselves are

48
socially
wastedin the pursuit of quick profits at the (i.e. population growth in senior citizens has
expenseof research. Bale alleged that there is a created new demand for expensive medical care.)
socialandhealthcost of intellectual drug piracy as
wellas a commercial and market access cost. To alleviate some of these problems Reforma al
Sistem de Salud (Reform of the Health Care
Balepointedout that strong intellectual property System) was created. Gracia indicated that the
protectionstimulates greater investment and reform has two major objectives: to divide the
technology transfer, promotes new industries and health care services into two categories, those who
jobs and in the health care field has the added can pay for coverage and those who cannot; and to
benefitof promoting research into new chemical modernize the health care system by opening it to
andbiotechnologyproducts. The panelist stated competition.
thatthe elements of strong intellectual property
protection must have adequate recognition of the Grey Warner, Senior Vice President, Me rck
termof protection, the territoriality of intellectual Latin American Region, opened his remarks by
propertyrights, the totality and completeness of contending that worldwide, health care systems are
such rights and the necessity for transitional facing a financial crisis. This panelist said that
protection. In addition, Bale contends that the there is a growing imbalance between demand
essentialsof an effective IPR regime include: (demographic changes; growing expectations; new
political
recognitionof intellectualproperty rights' technologies) and supply (limited financial
(IPR) social and commercial net benefits in the resources). Warner stated that medicines account
fonn of better health and higher investment; for a relativity modest but important part of health
economic recognition that patents do not equate to spending, and that medicines when used properly
monopoliesbut rather to dynamic competitionto are cost-effective and contribute to overall health
createnew products; and legal respect for full care savings. Warner pointed out that international
intellectualproperty rights. comparisons suggest both serious over-and under-
consumptionof medicines and that often the most
Carlos Gracia; Director of Health Programs, appropriate medicines are not selected despite
Ministry of Health, Mexico , began his remarks limitedresources.
by announcing that Mexico recently started a
refonnprocess in its healthsector. The goal of the Warner argued that lack of patent protection does
reformwas to eliminate trade barriers and to not produce significant savings. For example in
encouragefree competition. The panelist stated Brazil pharmaceutical copies on the average are
thatthisreformconstituted one of Mexico's most only7.5 percentless expensive than the innovative
importantsteps to advancing the creation of a brands, and one in four copy brands are more
hemisphericfree trade zone with regard to the expensive than the innovative brands.
provisionsof health care and financial services.
Warner summarized his remarks by contending
Graciapointedout that even though this reform has that there is a need for new competition-based
made some advances in health care it is not models in health care; there is a need to focus on
uniform,leaving around 10 million Mexicans health outcome improvements; a need for all
withoutbasichealthcare coverage. In addition, to participants to change to compete; and a need to
traditional diseases
diseases such as cholera and respiratory improve rational use of medicines. All players
infections,the panelist stated that Mexico is now must work together to get the desired results.
faced with new health problems derived from
changesin living style such as mental illness and Brandling-Bennettwho participated in both panels
heartdisease. Adding to this problem, Mexico is stated the importance of trade in health goods and
facinga radicaltransformation in demographics servicesto increaseaccess and quality of care. To
that end, he identifiedimportantissues that must be

49
block or limit access to markets. Establish·
examined so that hemispherictrade can become a proper regulatory framework and appl . tnga
means of increasing access to quality health
mechanisms t~ promote trade in heal~~;;?en
services in an equitable manner. and goods are unportant means to increa ices
to health care and to improve the ms,~l~ccess
One main issue is the establishment of an -iuo. It)' Of
services.
appropriate regulatory framework. This
framework should include: standards for
Regarding trade in health goods and se .
establishing and operating hospitals;standardsfor rv1ces
medical practice and measuresto guaranteequality appropriate regulatory frameworks and the
of care; certification and licensing requirements of internal markets must be balanced with .
. . th reign
for foreign health professionals to practice in demand. An mcrease m e health sector tr d
. . ae
importing countries; regulations against unfair will have an ~por~nt ~pact on the overall
trade practices and competition on the part of economy. This regional mtegration, howe
. a11·
requires strategic iances between international
ver
foreign providers of goods and services to the
detriment of national competitiveness; the organizations,nationalgovernments, private secto
establishment of national/supranationalregulatory businesses,non-profitorganizations and the publi/
agencies to define and enforce standards for the
manufacturing of health related products and Conclusion
pharmaceuticals,and the protection of consumers.
There cannot be regional integration without
It is important that the regulatory framework private participation. Technology transfer i.e.,
serves to foster trade rather than act as a barrier to telemedicine, should be applied as a systematic
trade. Measures contained in regulationssuch as: process, and should consider the capabilitiesof
bylaws of professional organizations; limited each country to provide the necessary support.
reimbursement of treatment costs for services Trade in health goods and services will be favored
obtained overseas by health insurancecompanies; throughregionalintegrationif barriers are reduced
lack of malpractice insurance; limitationson the while applying open mechanisms to increase
establishmentof foreign commercialpresence and quality and access.
capital repatriation, can result in restrictions that

Recommendations
Form international panels to prepare Includeinternational agencies, such as the
stages and processes for health care Pan American Health Organization
technology and services.
(PAHO), in the design of a common
strategy to address health integration
Create a profile for each country's needs issues.
and requirements for the integration
process.
Recognize Intellectual Property Rights'
(IPRs) social and commercial net benefits.
Develop mechanisms for creating
partnerships between the private and
public sectors in health issues. Harmonize standarddsfor health related
products and services as well as
malpractice reform.

50
PanelMembers
PanelOne: "Integratingthe Heathcare Panel Two: "Breakingthe Barriersto Trade
tureII
Infrastructure and CreatingMarket Opportunitiesin a
Hemisphere-wideFree TradeArea"
PabloValencia (Moderator)
Director Mario Rafael Caviedes (Moderator)
Officeof Technology and Transfer ExecutivePresident
Universityof Southern California Asociacionde Isapres de Chile A.G.
UnitedStates Chile

HerExcellency Harvey Bale


AmbassadorSonia Picado Senior Vice President
Embassyof Costa Rica PharmaceuticalResearch and Manufacturers
of America
IanRawson United States
SeniorVice President
AlleghenyGeneral Hospital RonaldoPitta
UnitedStates Treasury Director
BrazilianAssociationof Medical Equipment
DavidBrandling-Bennett Manufacturers
DeputyDirector Brazil
PanAmerican Health Organization
Carlos Gracia
Jorge Solorzano Mosqueda Director of Health Programs
DirectorGeneral Secretaria de Salud
HospitalSanta Fe, S.A. de C.V. Mexico
Mexico
Grey Warner
Senior Vice President
Merck Latin American Region
Merck & CompanyInc.
United States

David Brandling-Bennett
Deputy Director
Pan AmericanHealth Organization

51
SECTORALWORKSHOPVII:
''ENVIRONMENTAND THE ECONOMICSOF INTEGRATION"

Summaryof Discussions
Over
. the course of the two panels dealingwith environmentand the economicsof integrationthe following
.
issues were raised and discussed. The summarypresenteddoes not representa consensuscomingoutof the
works.hopbut, rather, a synthesisof discussionon numeroustopics that were broughtto thefloor by both
panelists and workshopparticipants.

SUMMARY OF PANEL I: "ENVIRONMENTAL


REGULATIONAND TRADEINTEGRATION"

Environment as a component of all trade sustainable development into its trade and economic
discussions policies.

The issue featured most prominently in this panel's The perception that environment is a limiting factor
discussion was the importance of integrating for trade integration must be overcome.
sustainable development into the formal working
group process, in each of the work groups, We must pay more attention to the politics and
throughout the discussions of regional and public relations aspects of environmental issues.
hemispheric trade integration. Sustainability should Outside of this workshop, we are perceived as the
also be made an integral part of existing multi- enemy, preventing profits in other industry sectors,
lateral institutions and their treatment of economic, preventing development. Our main job is to make
political, and social issues. other groups look upon environment as an
integrated part of the economy .
The new vision of economic development, which
needs to be adopted by all industry sectors in all Regulation and Enforcement
parts of the hemisphere, includes political, social,
economic, and environmental elements. The protection of the environment in a frameworkof
free trade is best achieved by applying the "polluter
It is necessary to introduce an environmental pays principle" and internalizing environmental
dimension into economics. Somehow, the costs of costs.
environmental degradation must be absorbed, the
question is who and how . Will the costs be paid Each nation and society has a sovereign right to set
externally or internally? Can a GSP-like mechanism and choose its own regulations and environmental
be implemented? Are there incentives and/or standards according to the economic and social
disincentives that will encourage manufacturers to priorities and ecological circumstances of the
think about a product's life cycle? Can additional country. Keeping this in mind, each nation should
debt-for-nature swaps be implemented to help strive to raise its environmental protection
conserve natural resources in the hemisphere? Can standards .
financing be made available for for technology
adoption? Enforcementof environmental laws in the Americas
should include: sufficient coordination and
In part because there is no overarching cooperation between nations; joint enforcement
organizational entity dedicated to environmental programs between border nations; a clear
issues, it is incumbent on each country to factor continental treatment of problems that cross
national boundaries; information sharing initiatives;

52
andmechanismsfor rapid deploymentof technical environmental organizationshould be created or the
assistanee,
technologytransfer and training between capacitiesof existingregional organizations such as
thenationsof the Americas. the OAS or PAHO should be increased. The goal
being to gather and analyzedata and trends, create
Balancingmaintenance of natural resources with mechanisms by which non-governmental parties
development has traditionallybeen achievedthrough (businesses and citizen groups) can initiate
legislation. However, in many parts of the investigations; compel disclosures of publicly and
hemisphere,the legislation that may exist is not privately held information, and generally enhance
adequatelyenforced. the transparencyof environmentalmanagement.

Incentives for clean industries should not be The Commissionfor Environmental Cooperation,
considered until enforcement is effective. createdas a resultof the NAFTA parallel agreement
Governmentsin the hemisphere must provide on the environment, is an experiment in the
leadership
andresourcesfor enforcement. combinationof trade and environment and is one
organization that may be able to provide the
Indealingwiththe Mexico--U.S. border, areas of institutionalforum that is needed.
focushave included making rules compatible on
both sides, reporting data in a similar fashion and The Commission might expand its work and
usingsimilarmethodsof evaluation. Attemptshave opportunitiesto the hemisphereor, alternately, the
not been made to create standards that are same in internationalprocess can be strengthened within
eachcountry. each countryof the hemisphere (again, integrating
environmentinto all trade and economic decision-
Training,Education, and Institution Building making).

Environmentalcooperation, technical assistance, Theexperienceof Mercosurcan also be considered.


and learningfrom the experiencesof others are the In this case, there is no overriding environmental
best vehicles for expanding environmental institution but, rather, the relevant parties meet
protectionvaluesin the hemisphere. periodicallyto discuss and make decisions on key
issues. In the Mercosurprocess, every negotiation
Eachcountryin the Americas should have in place oneverycommercialissue offers the opportunity to
a strong environmental training and a strong include environment -- agricultural subsidies,
enforcementprogram. phytosanitary measures, and the like. Through
Mercosur,supra-nationalnorms are generated.
Theprocessof institutional strengtheningin each
country willtakeplace through small steps. One of A programshouldbe put in place to (a) promote the
themostimportantsteps is developingand sharing gathering and dissemination of information
knowledge. Untilthe knowledgebase has arrivedat regarding overall national levels of emissions and
a commonstandard, institutions can do very little. major pollutant discharges to the ambient
A bestenvironmentalpractices conference,sharing environment; (b) promote an environment of
the experienceof all entities in the hemisphere,is consistentcompliancemonitoring, and (c) report (in
suggested. comparableterms)on the progresstoward achieving
sustainable development and environmental
InternationalInstitutions and their Role conservationincludinginformationon compliance
investmentlevelsin each country,compliancerates,
Thefirststepfor better regional governancemay be and results of enforcementactions.
the creation of an institutional forum to
systematicallyconsider and develop regional
environmental policies. Either a new regional

53
Institutional arrangements must be in place to business , teir voices must be heard during
the
support countries in making trade an effective tool Process of mtegratmg sustamab1hty into thetrade
for sustainable development. process . e

The WTO gives us a framework for rule-making as Toe cost of technology is problematic -- finan .
· ing IS
the free trade area of the Americas is developed. significant , especially for small countries like
Certain niches for environment and trade in the Ecuador .
hemisphere, not currently addressed in the WTO
(such as eco-packaging) can be addressed The U.S . Foreign Service is commended for
separately . Some suggestions include a clearing facilitating the inclusion ofNGOs and others in the
house of environmental regulations, cooperation on process. Increased public participation at all level:
standards setting, and capacity building . is the goal.

Trade Sanctions and the Environment International Agreements

In the absence of effective mechanisms for Each country of the Americas, consistent with
international environmental law, environmentally Agenda 21 and the Framework Convention on
concerned governments and people have Climate Change, should promote sustainable energy
increasingly turned to other tools such as conditions development and use.
on foreign aid, the private sector standard setting
process (ISO), and trade measures. To avoid the All countries in the hemisphere should endorse and
use of trade sanctions , public and private sector implement global environmental treaties .
leaders need to strengthen the other tools --
specifically we need to strengthen direct means of Potential Areas of Cooperation
environmental protection rather than doing the job
indirectly through trade sanctions. State and provincial relationships should be
considered an opportunity to share experiences.
The avoidance of environmental disputes and an For example, Denver is working with Santiago and
equitable process for dispute resolution among trade Mexico City, sharing its experiences related to air
partners should be a central role of any institutional pollution . State-level exchanges allow parties to
arrangements . move more quickly to organize training programs
and exchanges. The National Governors
Trade measures should be used only as a last resort Association meeting and its discussion on state
to promote environmental objectives, unless those cooperation in the Americas was mentioned .
measures are agreed to within a regional and/or
multilateral framework. An important area of cooperation is
information/data transfer. Specifically , there should
A Continued Voice for the Private Sector be a focus on identifying successful demonstrations
where private-public partnerships have worked to
The importance of small businesses and their role solve environmental problems . Technology
cannot be stated too strongly . Particularly given the demonstrations create an important pool of
fact that trade and environment measures often have information that could be used broadly throughout
a greater affect on small and medium-sized the hemisphere.

54
SUMMARY OF PANEL 2: "COOPERATIVE APPROACHES TO
COST-EFFECTIVE ENVIRONMENTAL PROTECTION"

r iate Environmental Measures ISO 14000 - General Guidelines on


Appropiate
Environmental Management
nmentalpolicy should be consistent with a Systems, Principles and
Envirotry's level of development and should benefit Supporting Techniques;
country'sThe developing world can not afford to ISO 14001 - A Specification Standard for
people·
expendnd energy and resources on wasteful . Environmental Management
environmentalmeasures. The good news 1s that Systems that contain the
en v
. dustrial . have spent 1av1s
countnes . hiy to develop requirements for certification or
solutions
5
to environmental problems. The process registration by third party
f developing technology, prototypes,and optimized certifiers;
solutions,has yielded sound relatively inexpensive ISO 14010- General Principles of
technologies-- technologies that developing EnvironmentalAuditing;
countries can use to solve or prevent environmental ISO 14011 - Auditing an Environmental
problemsat a relativelylow cost. Management System; and
ISO 14012 - Qualificationsfor an Auditor.
Some things can be done to avoid pollution at
almostno cost. Other things can, with minimal Given the conclusion of the Miami Summit, at
investments, improve significantly the health of a whichthe 34 nationsof the Americas acknowledged
community. Safe drinking water and sewage that "sound environmental management is an
collectionsystems with at least primary treatment essentialelementof sustainable development" these
andhighefficiency particulate collectionfor power ISO 14000 Standards provide a globally accepted
generationshould be high priorities because their framework for the goals of the hemisphere. The
costis low and they improve human health challenge now, is to find all the appropriate and
positiveand encouragingways to incorporate these
Encouragingdevelopingcountries to adopt the most standards into the relationship that exists between
stringentenvironmental standards in areas that are national regulatory authorities and the business
not a high priority for that country results in a community. For example, can the ISO 14000
hollowvictory because enforcementis unlikely. standards be used in regulatory reform measures
now under discussion to replace the command an
ISO14000 control approach to environmentalprotection?

TheInternational Standards Organization (ISO), ISO includeselements for conservation of natural


justpriorto the Forum, overwhelminglyagreed to resources as part of certification process. Green
advancethe Committee Drafts of the ISO 14000 purchasing and other ideas will also be included.
standardson Environmental Management Systems Better techniquesfor recycling and reusing will be
andEnviro
Env nmental Auditing. Over 40 countries a helpful way to avoid the need for market
includingArgentina, Brazil, Canada, Chile, intervention.
Colombia' Mexico, Uruguay, and the United States
provided input. The key standards that have Initially the ISO concept of risk assessment was
d to the DraftInternationalStandard
progresse (DIS) embodied in guidelines for impact assessments.
stageare: While there is not a current ISO plan to develop
harmonizedrisk assessment standard, it is a topic
amongnational delegations.

55
Environment and the Economy
More cost effective, allowing comp
. nies to
Environment is an integrated part of the economy. chose the most efficient ways to
. c achieve
From an economic point of view environment is their commitments;
unportant because: Costs governments less to monitor and
enforce voluntary measures than command
1) Minimal environmental impact indicates and control measures; and
the efficient use of resources (a good Reduces confrontation and promotes
. h
cooperative approac es between the
environment is a good economy).
. d e
emitters government, an environmental
2) Environmental disasters are economic groups .
disasters.
Concerns
3) The environment is closely linked to the Participation has not been adequate. Some
health of the workforce. industry sectors rely on the leading
companies to volunteer and make a token
4) Expenditures on environment are like response for the sector, hoping they can
expenditures on infrastructure, they are an escape any serious commitments .
investment in the economy with significant Government incentives and support for
long term economic benefits. voluntary measures can cost the taxpayer
more. Also a tremendous amount of time is
Free trade is sometimes perceived as aggravating the taken in negotiating agreements on
environment because increased production voluntary compliance .
accelerates the consumption of resources . However, A system of follow-up to ensure that
as we move from an age of materials to an age of companies meet their voluntary
knowledge, improved technology can help us use commitments, and to stimulate action from
fewer natural resources in production. Market those companies that refuse , needs to be
forces need to be cornerstone of technology implemented.
adoption.
Canada has identified five tiers of effective
If we wait until 2005 to put environmental plans in environmentalinitiatives for which clear targets and
place, it will be too late. By encouraging industries timetables must be set:
and governments to look at sustainability sooner,
each country protects its asset base . 1) Voluntary initiatives : Some programs in
this tier include : environmental
The experience of Mexico shows that cost of management systems, pollution prevention,
pollution control is a good infrastructure investment total quality environmental management,
in the long run. Prioritizing water treatment should responsible care programs , government
be agreed upon because it is a wise investment. environmental procurement requirements,
accelerated reduction/elimination of toxics
Implementing Voluntary Pollution Control and (ARET) , and OMMRI/CIPSI
Prevention Measures
2) Encourage participation : · Examples
The Canadian Experience has identified a number of include peer review of non-complying
assets and concerns regarding voluntary efforts companies, using government preferential
underway there. purchasing and contracting, periodic
listings of non-compliers in the media, and

56
infonnation programs to assist con- for example, participate in regional and national
complying companies . industrial environmental committees along-side
government authorities and NGOs . The National
3) EnvironmentalInstruments: These are Association of Industries (ANDI) further chairs a
non-regulatory instruments that support permanent technical advisory committee for the
voluntary actions and are already being Ministry of Environment as it develops regulations
undertaken . For example, audits and and development projects .
liabilitiesrequired by the banking industry,
insurance company liability requirements, ANDI has also been promoting Responsible Care
and economic instruments . initiatives since 1993 and is trying to organi ze a
Center for Cleaner Production based on UNEP's
4) Smart Regulatory Instruments : initiative and the EPA's EP3 pollution prevention
Regulationcan be made "smarter" by program.
focusing on assistive regulations (e.g.,
economic instruments, pollution Industries, government authorities , and non-
prevention),field-leveling regulations, the governmentalorganizations in the developing world
threatof regulation , command-and-control should be allowed, through a kind of "open house ,"
regulation,and effective enforcement. to learn more about cleaner production methods
being implementedin the United States and Canada .
5) Zero Impact Companies (ZICs): "Cleaning dirtiness" is an obsolete approach which
Companies that want to avoid the never- industriesin the developing world should attemp t to
ending grind of tougher and tougher leapfrog with the adoption of clean technologies .
initiatives to protect the environment, This approach will serve to save small and medium
develop business plans that will lead them size industries the cost of high technology cleaning .
to becoming zero impact companies. They
develop sustainable development plans that Pilot project demonstrations of cleaner production
will result in their operations having methods are encouraged in sectors such as metal
virtually no significant impact on the finishing, dairy, food processing , beverage
environment. processing, plastic recycling, and others .

ProjectXL from EPA is example of net benefit Possible partners in the economic integration
compliance
yielding net benefits. Rule making came process have to discuss and agree on what is
abouta month ago, generating an open-ended understoodas "unsustainable patterns of production
dialogue
on achieving or going beyond compliance and consumption" and what can be done to reduce
in exchangefor greater flexibility. The project and eliminate them.
stimulates
environmental management approaches
and technologydevelopment, gets away from It is essential to include the small business
command andand
control, and may change thinking of community in the environmental dialogue. Since
policymakersin the U.S. yielding more productive small businesses have limited resources and
approaches. significant economic constraints, they bring a
different perspective to the discussion . Because of
· Initiativesin the ManufacturingSector/Public these limited resources, they have many innovative
Participations ideas and processes to help solve environmental
problems .
Oneof thekeyroles that can be played by industry
throughoutthe hemisphere is to encourage a The Colorado Environmental Business Alliance is a
dialoguewith environmental authorities in their potential model of private sector cooperation
countries.
More than 250 industries in Colombia, providing a voice for small companies, getting

57
involved in training issues, and creating effective The education systems of the hemisphere
linkages with state and federal governments. important vehicle for the development of are an
. rnuch
needed environmental consciousness . A program .
. C
grammar schoo l in osta
Rica in
ca, for example, has
Training and Technical Assistance
brought about a significant change of attitude. Each
Many industrials
industrial sources encourage the professional country should focus on education .
improvement of government environmental
agencies . These agencies need to be prepared to Risk assessment is valuable tool. What Principals
negotiate sound and progressive solutions and make should be considered when looking at risk
effcient decisions based on quality information and assessment to avoid some of the problems
nsk analysis . experienced in the U.S .?

Recommendations

Continued discussion and debate produced the resources on wasteful environmental


following points and recommendations which were measures .
agreed to broadly by workshop panelists and
participants. It was further agreed that all of That environmental training and capacity
these recommendations should be considered and building are of great importance.
acted upon immediately in order to insure that
they will be an integral part of the process leading That environmental cooperation, education,
to trade integration in 2005. This is essential to and technical assistance are the best
provide sustainable economic prosperity and a vehicles for expanding each country's
higher standard of living for citizens throughout sovereign right to set its own environmental
the hemisphere. standards .

Recognizing: That the participation of the private sector,


including small and medium-sized
That trade, economic and environmental enterprises (SMEs), and non-governmental
policies are increasingly interrelated . organizations, throughout the process is
essential.
That environmental regulations as a barrier
to trade are a concern to many nations . It is Recommended to Trade Ministers that:

That environmental infrastructure Sustainable development be incorporated


investment should be considered a key into the formal working group process, in
component of every industry sector and each of the work groups , throughout the
every country's economic development discussions of trade integration.
strategy as it will ensure the efficiency and Sustainability should also be made an
competitiveness of production , and the integral part of existing multi-lateral
social and economic well-being of all institutions and their treatment of
citizens of the Americas. economic, political, and social issues.

That environmental policy should be Governments incorporate the participation


consistent with the level of development of of private sector, including SMEs, and non·
the country and should benefit people. Few governmental organizations into the
countries can afford to dedicate energy and

58
environmental and trade law making Regional institutions , such as the
processes. Commission on Environmental
Cooperation (CEC) and OAS , be
Governments increase the enforcement of strengthened to ensure appropriate
their own country's environmental collection, analysis and dissemination of
regulations and encourage industries to basic environmental information .
participate in voluntary environmental
management, self-auditing and self- Environment be integrated into education
policing initiatives. programs, in elementary schools for
example, as a way to help educate society
Governments encourage their industry to and as a first step toward required
participate in the ISO 14000 process and environmental awareness throughout the
other voluntary pollution prevention and hemisphere. Environmental awareness
control initiativesthereby reducing the need should also be increased through greater
for command and control environmental dissemination of environmental
legislation. infonnation.

Governments act to ensure that A hemispheric conference (perhaps a


environmental protection standards and SpecializedConferenceof the Organizat ion
regulations do not represent unfair and of American States) be held on the
unacceptable barriers to trade. identification and follow-up policies of
environmental concerns of hemispheric
Governmentsin the hemispherediscuss and nature (e.g., how to deal with
identify appropriate means to incentivize transboundary environmental issues ,
industry to adopt policies of sound continental transportation of toxics ,
environmental stewardship . managementof migratory species and their
habitats) .

It isRecommended to Appropriate Government Governments throughout the hemisphere


Officialsthat: encourage multi-lateral and major
government lending institutions to make
Each country identify, in concert with the environment, particularly institution
private sector and non-governmental building (e.g., technical training,
organizations (NGOs), its own infonnation exchange, technology
environmental priorities and present those demonstrations, etc.), a higher priority .
priorities to the meeting of ministers at the
SustainableDevelopment Conference to be Countries be encouraged to endorse and
held in Bolivia in 1996. implement global environmental treaties .

59
Panel Members

Panel One: "Environmental Regulation and Panel Two: "Cooperative Approaches to Cost-
Trade Integration 11 Effective Environmental Protection 11

Victor Lichtinger (Moderator) Ralph Peterson (Moderator)


Executive Director CEO
Commission for EnvironmentalCooperation CH2MHill InternationalLtd.
Mexico United States

Pedro Tarak ManuelOlivera


Director ManagerEnvironmentalAffairs
Fundacion Ambiente e RecursosNaturales AsociacionNacionalde Indutriales
Argentina Colombia

William Futrell P.J. (Jim) Adam


Director CEO
Environmental Law Institute Black & Veatch
United States United States

Raul Deju Gary Gallon


President, Western Operations President
Chemical Waste Management CanadianEnvironmentIndustry Association
United States Canada

Jorge Cabrera Joel Charm


Secretary Chairman
Central American EnvironmentalCommission EnvironmentalManagementTechnical
Guatemala AdvisorySub-Groupfor ISO 14000
AlliedSignal
United States

60
FUNCTIONALWORKSHOPI:
"HEMISPHERICCOMMERCE:
SETTINGTHE STANDARDSOF INTEGRATION"

Summaryof
of Discussions

Thepanelreviewedthe commitmentconcerning standardsin the MinisterialJoint Statementand discussedhow


the private sector should support this political commitment. The panel acknowledgedthe importance of
standardsand confonnityassessmentproceduresto international tradeand discussedspecific recommendations
to ensurethat the hannonizationof standardsand confonnityassessmentproceduresserves the interests of all
parties.

SUMMARYOF PANEL 1: " STANDARDS"

The moderator introduced the topic by reviewing priorities, a resource plan and the realization that
some current obligations that exist under NAFT A there will be tradeoffs.
and GATT as they relate to standards. A principal
obligation is that countries not use standards to One panelist emphasized the evolution of the Latin
create unnecessary obstacles to trade. He American attitudes with respect to standards.
highlightedthe fact that, in their Joint Declaration, Historically, Latin American countries used
yesterday, the 34 Trade Ministers agreed to ensure standards to protect domestic production. When
that the FT AA will be fully consistent with the these countries changed their approach and used
provisions of the Agreement establishing the WTO. the standards of a developed country, they became
captive markets. The panelist suggested that Latin
Ministers also agreed to establish a Working Group American countries traditionally participated little
on Standards, for which Canada will be the initial in international standardization processes because
coordinator. The Working Group will: they did not recognize the importance of these
recommend ways to enhance processes, but said that that is changing.
transparency;
compile information on conformity One panelist discussed the relationship between
assessment and accreditation bodies; standards and the creation of the Free Trade area
recommend ways to promote of the Americas. He emphasized that the creation
understanding of the WTO Agreement on of free trade faces tremendous obstacles. He
Technical Barriers to Trade; discussed some regional approaches to standards
make recommendations on product testing such as in the Central American Common Market
and certification, with a view to mutual AndeanPactandMercosur, ALADI and NAFTA'.
recognition agreements. He agreed with another panelist that we must
recognize that technological and economic
One panelist reviewed some barriers to achieving differences exist for competitiveness in the
greater harmonization and implementation of hemisphere to continue to increase .
standards in the hemisphere, such as the wide
divergence of economic development and the One panelist emphasized that tl)e approach to
difficulty in achieving consensus between harmonization must be specific to each sector since
economically diverse participants. The panelist each is unique. He also stated that all countries
furtherstatedthat effective harmonization requires must better use their existing investment in
vision, organizational structure, establishment of international and national standards and conformity
assessment institutions , including ISO, IEC, ITU

61
and COPANT . Members of the audience voiced of litigation. For example, U s
. · · insuranc
agreement with this point. In addition, the providers may not insure companies on product
harmonization activities in NAFTA and Mercosur liability unless they comply with voluntary
must be coordinated, and must obtain the active standards. Some panelists defended the
. use of
participationof industry. We also need an ongoing voluntary standards, statmg that is not that the
set of meetings to pursue this harmonization work. process is closed but that industry has not made
. ae
adequate efforts to get mvo1ved.
An audience member from Mexico suggested that
we need to begin to harmonize in other areas, such An audience member from FECAEXA, the e
as tariff schedules, rules of origin, investment, Central American Exporters Association
industrial and intellectual property, temporary questioned the implementation of standards by
entry of persons, dispute settlement, safeguards, individual countnes versus the adoption of
sanitary and phytosanitary. Also, he stated that we international standards such as ISO 9000or ISO
need to start thinking about putting an end the 14,000, which are more neutral and less subjectto
problems created by the Anglo-Saxonsystem. In protectionist interests. He suggested we moveto
those countries, voluntary standards can become global standards and measurements of quality.
tantamountto mandatorystandards, due to the fear

SUMMARYOF PANEL2: " CONFORMITYASSESSMENT"

The Moderator introduced the subject by pointing One panelist emphasized that we cannot separate
out that the U.S. system is decentralized and standards and conformity assessment issues. In
includes both public and private sector Canada, a national accreditation system for
components. The ultimategoal is one product, one standards and conformity assessment systemshas
market, and one test, and NIST is committed to been developed. Initially, it was strictly for
working with industry to achieve this goal. Canadian organizations but was opened up under
the U.S. - Canada FTA and NAFTA. The Panelist
One panelist suggested that the goal is to develop emphasized that each country has to have a
a "foreign policy" of conformity assessment national accreditation program, in order for us to
designed to enable manufacturers to certify to any develop mutual recognition agreements on a
standard upon request in any market. The hemisphericbasis. The panelist stated that for the
componentsof this certification system are access, future we must consider new ways to satisfy
contact and ties ("ACT"). After a country is growingmarkets such as supplier declarationsand
identified, the safety infrastructure is assessedand the possible use of an EC-type mark for the
a program of communicationis established. The Americas. For this work, we need all stakeholders
panelist made the followingrecommendations: to participate.
we must be sensitive to the political and
social circumstances in these countries; One Panelist argued that the term "conformity
we must study the myriad of agreements ssessment is insufficientto capture au the things
JI

such as the G-3, NAFTA, COPANT and 1tmust mean. It must include metrology, technical
Mercosur to see how they establish regulation, voluntary standards, conformity
functional relationships; · . . We
assessment, and quality system registration
we must supportorganizationsthat already 1
also must take account the work of the subregional
exist; 0
groups such as Mercosur, which has done a lot
we must find ways to reach out to these work in this area.
countriesto determine "state of readiness"
and provide developmentalassistance. One panelist stated that within the frameworkof
· 1 mtegrauon,
reg10na · · ·
isolated efforts doo not suffice,

62
so that our commitment to regional bodies such as One panelist stated that the best way to achieve
COPANT and Mercosur must be firm . The qual ity is through quality management, and the
panelist suggested that we implement a regional way to achieve quality management is through
coordination program to work toward making good employees. This suggests that a standards
national quality systems compatible . The panelist system is meaningless without a viable educational
offered the facilities of its institution, the National strategy .
Institutefor Industrial Technology in Argentina for
thisundertaking. At the same time , it is important Conclusions
to adopt ISO recommendations whenever possible
to ensure insertion in global trends in The harmonization of standar ds and the mutual
standardization and conformity assessment. recognition of conformity assessment procedures in
the hemisphere are essential to foster ing free trade.
One panelist pointed out that each country has to Some salient points of agreeme nt were that:
integrate its system with energy and with the industry involvem ent and public/private
participation of the private sector, otherwise a sector cooperation is critical to the success
standard designed to open the market may become of these harmonizati on effo rts;
a constraint. this work must proceed on a sect or -by-
sector basis ;
One panelist noted how compliance to standards we must use the standard s infr astru cture
can become a goal in itself, but we must not forget already in place .
that it can also permit a company to increase its
competitiveness.

63
Panel Members
Panel 1 : "Standards" Panel 2: "Conformity Assessment"

Richard LaF ontaine (Moderator) Mary L. Good (Moderator)


President Under Secretary for Technology Administration
Standards Council of Canada Department of Commerce
Canada United States

Jose Vincente Maldonado Tom Castine


Minister of Industries and Commerce President
Integration and Fishing ' Underwriters Laboratories , Inc
Ecuador United States

Sergio Mazza John Kean


President President
American National Standards Institute Canadian Standards Association
United States Canada

Dennis Mangino Silvia Portnoy


President and CEO President
NSF International National Industrial Technology Institute
United States Argentina

Pablo Benia Julio Cesar Carmo Bueno


Director President
Institute Uruguayo de Nonnas Tecnicas Metrology Institute
Uruguay Ministry of Industry, Commerce and Tourism
Brazil

Hans Kluge
Chainnan
Automatic Switch Co.
United States

Dr. Augusto Pozo Pino


Director
Centro de Calidad
Mexico

64
FUNCTIONAL WORKSHOP II:
ENHANCING INTEGRATION THROUGH LEGAL SYSTEMS"
11

Summaryof Discussions
Panelists from the public and private sectors of Brazil, Ecuador, Mexico, Peru, Venezuela and the United
Statesdiscussed the role of legal systems in enhancing hemispheric integration. Two panel discussions focused
on integratingcommercial law systems and on alternative methods of solving private international commercial
disputes. This paper provides a summary of statements and suggestions made by workshop panelists and
members of the audience, it does not purport to reflect a consensus on the issues covered, except where
explicitly noted .

SUMMARY OF PANEL 1: "INTEGRATING COMMERCIAL LAW SYSTEMS"

Thispanel discussed areas in which the integration must be quite high. Free trade would cease to be
or hannonization of legal systems in the hemisphere free if goods and services could not cross national
could contribute to commercial integration. The borders quickly and inexpensively as a result of
discussion focused on the harmonization of trade "legal" impediments. Simply put, free trade and
and commercial laws, regulations and practices in invesnnent require an uninterrupted legal highway .
the hemisphere that would facilitate the cross-
border movement of goods, services and Twenty-three Inter-American conventions
transactions and reduce the potential for approved by the Conferences on Private
corruption. International Law, sponsored by the Organization
of American States (OAS), provide some points of
The panelists outlined recent developments reference (with limited results) on matters such as
regarding the harmonization of trade and negotiable instruments, powers of attorney ,
commerce laws in Latin America and discussed the provisional court measures, arbitration , transport
relation between the level of commercial by road and applicable law in international
integration and the level of legal compatibility. contracts . The panel identified insolvency,
The profound differences in the civil code and international transport, secured financing and
common law systems and methods of doing documentation for letters of credit as legal areas
business in each, make it difficult, for a lawyer where harmonization may have immediate and the
accustomed to written codes, to harmonize most beneficial impacts on commercial integration.
commercial laws with the common law system Other areas for study or work include
whose main source of law is judicial precedent. administrative, competition and corporate law ,
While the strength of civil law resides in the logical requirements for cross -border trade, international
development of general concepts, the strength of civil responsibility for cross border environmental
common law is in the manner in which it deals contamination, a continental model law on
with specific cases. In view of these differences, corporations, the concept of a "global entity" , and
the harmonization process must lead to objective the integration of harmonized legal principles into
standards and to understandings of principles and domestic legal systems. Of relevance to this panel,
concepts, if not necessarily common wordings. participants in the workshop on "Information
Infrastructure" encouraged the OAS Inter-
Given the volume and speed of trade in goods and American Telecommunications Commission
services associated with free trade, the degree of (CITEL) to accelerate its work in contrasting and
uniformity of substantive law and practice comparing the different legal systems impacting
(includingdocumentation)among trading partners each nation's telecommunications environment in

65
order to understand the systems' interrelationship different countries -- is developing as increased
to trade and information issues. economic integration occurs in the hemisphere and
through international mee tings of lawyers, joint
Harmonization should be approached both from the ventures and increased foreign investment by u .S.
"top down," i.e ., through model laws and companies . If insufficient attention is paid to the
conventions and from the "bottom up, " i.e., need to educate ourselves about diverse cultures
through the development of commercial customs an effort to establish uniform commercial rules
that reflect a harmonization of business concerns. will not remove the conflicts that will arise from
Attitudes toward commercial law, including the cultural differences. National and regional law
ability of private parties to create their own centers with significant research , educational and
substantive and procedural rules , and the method information components devoted to the unification
of formulation and interpretation of rules, vary and harmonization of trade, environmental and
widely and are not based on generally-recognized labor laws are worthy of support as bridges for the
international standards; total uniformity of these inevitable cultural gaps . Such centers exist in
attitudes would best facilitate commerce. Canada, Mexico and the United States and others
Objective standards found in the NAFTA should be are being created in Central and South America .
observed by Western Hemispheric countries to The National Law Center for Inter-American Free
prepare for the Free Trade Area of the Americas Trade, which presently acts as a secretariat for the
(FTAA), including observance of the principles in other centers, offered to coordinate proposals
the environmental and labor side accords . Some resulting from this meeting as well as to distribute
participants perceived U.S. litigiousness as studies and reports on harmonization efforts . It
inconsistent with the goal of a FT AA and a was also noted that the OAS Inter-American
possible non-tariff barrier . Juridical Committee includes in its charter the
purpose of "the study of the legal problems
Harmonization of laws is a movement towards concerning integration of the developing countries
accommodation of different legal systems and of of the continent, and the possibility of harmonizing
cultural differences between societies. their laws inasmuch as it is convenien t," and that
"Unconscious harmonization", -- i.e ., numerous therefore it too could have a role in the
avenues of influence occurring between groups in harmonization process .

SUMMARY OF PANEL 2: "COMMERCIALDISPUTE RESOLUTION"

This panel discussed the importanceand use of commercial sector. Such governments have had to
arbitration, mediation, conciliation and other give various assurances to private investors, such
alternative dispute resolution (ADR)mechanisms as including arbitration provisions in contracts or
for settlementof private internationalcommercial laws. However , this attitude toward arbitration is
disputesin the hemisphere,and the impedimentsto relatively new for Latin Am erican governments,
the use of such ADRs. which have been traditionally hostile to arbitration.
Furthermore , many laws, regulations and judicial
Investors need modern, stable, predictable and precedents must be changed before foreign
efficient judiciaries and legal systems. While the investors have clear rules with respect to
process to modernize legal systems occurs, the use arbitration. In addition, judges, lawyers ,
of alternative dispute resolution may be especially government bureaucrats and other key actors must
useful to address investors' concerns and promote change their attitudes and become more accepting
commercial integration. In the last few years, of arbitration. As an example of this, Peru has
Latin American governments have moved from added an article to its constitution clearly stating
being monopoly commercial actors to being that arbitration is acceptable. Commercial dispute
investment partners in, or solely regulators of, the settlement mechanisms must be objective ,

66
transparent and fair. International financial alike and to ensure adjudication of trade disputes
institutions, chambers of commerce, universities by objective criteria, free from political influence .
and conferences such as this one can play a
positive role in this long process. Conclusions

The United Nations Convention on the Recognition The importance of law to integration must be
and Enforcement of Foreign Arbitral Awards emphasized continually. There is a need for more
(New York Convention) and the Inter-American education throughout the hemisphere on the
Convention on International Commercial different legal systems, and national law center s
Arbitrationare similar on various points, including that use both the "top down " and "bottom up"
the public policy defense. The issue is how to approaches should be organized to assist in this
implement these into trading relations, for educational process. Countries from the Western
example, in contracts, joint ventures and limited Hemisphere should establish and coordinate the
liability agreements. All of these should have work of specialized national groups to make
arbitration clauses that specify all practical proposals for addressing priority areas identified at
considerations such as the method for selecting this workshop, including the use of alternative
arbitrators, choice of law and fora, and allocation dispute resolution . The OAS Inter-American
of arbitration costs . Juridical Committee, the National Law Center for
Inter-American Free Trade and similar institutions
Major arbitration associations are too expensive for could coordinate work sent to them by these
all but big companies. Furthermore, both the OAS countries. It is necessary to increase exchange
Inter-American Commercial Arbitration programs in law schools in the hemisphere and to
Commission (IACAC) and the International Centre establish a Fulbright-type hemispheric educational
for the Settlement of Investment Disputes (ICSID) fund to promote such exchange programs. Latin
are under-utilized. As a result of the Summit of American and Caribbean law schools should
the Americas, a non-profit, regional commercial develop programs for U.S. and Canadian law
dispute resolution body in Miami, with ties to the students and attorneys to study local , civil law
IACAC and the American Arbitration Association, systems, and U.S. and Canadian law schools
is renewing its efforts to promote ADR in the should place greater emphasis on the study of Latin
hemisphere. American and Caribbean law.

It was suggested that Latin American governments It was suggested that a regional arbitration body
may have been influenced by those features of may be desirable. Structures from existing
U.S. law and practices that may tend to restrict conventionsand the NAFT A could be elevated into
trade and protect domestic producers against a permanent hemispheric committee for developing
foreign competition. Trade laws throughout the model rules for arbitration procedures . For
hemisphere should be reformed to remove or example, the OAS IACAC could be strengthened
mitigate protectionist features, to ensure equal or combined with relevant Inter-American
treatment for domestic and foreign competitors Development Bank bodies to execute this work.

67
PanelMembers
Panel One: "Integrati.ngCommercial Law Panel Two: "CommercialDispute
Systems" Settlemen
.,,
Ginger Lew (Moderator)
Ginger Lew (Moderator) General Counsel
General Counsel Department of Commerce
Department of Commerce United States
United States
Roberto Dañino
Jose Alexandre Tavares Guerreiro Partner
Professor of Commercial Law Rogers & Wells
University of Sao Paulo Law School United States
Brazil
James M . Lyons
Boris Kozolchyk Partner
Director Rothgerber , Appel, Powers & Johnson
National Law Center for United States
Inter-American Free Trade
United States Hernan Perez
Attorney
Alejandro Ogarrio EMELEC (Ecuadorian Electrical Company)
Mexican Representative to UNCITRAL Ecuador
Partner, Bufete Ogarrio y Dias
Mexico Edgard Romero Nava
President
Stephen T. Zamora FEDECAMARAS
Director Venezuela
International Law Institute
University of Houston Law Center
United States

68
FUNCTIONAL \VORKSHOP III:
"SMALL AND MEDIUM-SIZED BUSINESSES
IN A HEMISPHERIC 1ARKETPLACE"

Summaryof Discussions
Panelists emphASIZED the importance of Small and Mediun-sized Enlerprises (SMEs) to the process of job
creationand hemispheric integration. The discussionsexamined the impedimentsSMEs are facing in today's
marketand identifiedpotential solutions that could be implemenJedby both the private and public sectors,
individually and collectively through the Free Trade Area of the Americas (FTAA). Panelists urged that the
FreeTradeArea of the Americas must offer SMEs the capability to effectively compete and that governments
must create an environment conducive to growth of SMEs.

SUMMARY OF PANEL 1: "GENERATING GROWTH IN THE SMALL AND MEDIUM-SIZED


BUSINESS SECTOR: CULTIVATING JOB CREATION AND COMPETITIVENESS"

Mr. de la Calle openedthe panel by urging that Cooperation: governments must work in
negotiators of the Free Trade Area of the partnership with the private sector to
Americasshould seek to provide the capability and provide services and develop assistance
the environment to enable micro and small and programs for SMEs;
medium-sizedenterprises (SMEs) to integrate into
production and commercial processes. He Creation: Emphasis on innovation;
identifiedthe following factors that will contribute
to this effort: Capital: Mechanisms to access capital;

Certainty in access to markets; Continuity: Provide public and private


sector services that are sustainable and
Technological selection: support the provide continuity. For example, one year
creation and transfer of technology and pilot programs cannot solve the deep-
facilitate strategic alliances to bring more rooted needs for education and financing.
SMEs into the production process.
Mr. Pizani argued that it is necessary to agree on
Economies of scale in financing, in access the definition and criteria of SMEs. The concept
to inputs and in specialty segments of the of SMEs should include not only manufacturing,
production process; but also services and trade. Programs and
assistance targeting SMEs are important, but
Access to competitive services to reduce without a supportive business environment, both
production costs. internally and through the creation of the Free
Trade Area, SMEs will not prosper. He
Mr. Lizarraga spoke about existing assistance emphasized that access to technology is critical. If
programs and recommended that mechanisms to SMEs are to survive and remain competitive as
support SMEs should take the following factors markets open, they must make better use of
into account: communications and new production techniques to
keep pace with larger companies.
Coordination of the numerous and varied
assistanceprograms; Ms. Pulley spoke about the recent White House
Conference on Small Business, highlighting

69
landmark legislation that has been enacted as a guarantee loans to SMEs that
. fi .
obtam mancmg on reasonabl
cannot
result of past conferences in support of SMEs such
as: . terms
through normal lendmg channels·
, and

The Regulatory Flexibility Act, requiring provide business and


management
government agencies to analyze the impact assistance.
of proposed rules on small businesses, and
to lessen the burden when possible; Mr. Valley urged that it is necessary to
uce
business risks for small and medium .
-sized
The Paperwork Reduction Act, designed businesses. He offered a number of solutions
.
to cut unnecessary paperwork from the such as encouragmg Western Hemisphere '
ere
Government; governments to prov1 e tax breaks for small and
medium-sized exporters. He also proposed the
The Small Business Innovation and creation of a Center for Small Business Financin
Research Program, which has provided and Development, to be located in Trinidad and
over $4 billion in Research and Tobago, to facilitate the development of SMEs
Development funds that formerly went to throughout the hemisphere.
big business;
Mr. Camillo dos Santos outlined the many
Small business owners in the June training programs that the Small Business
Conference proposed major changes in Association of Brazil offers entrepreneurs. He
pension laws and regulations to make it recommended that assistance efforts for SMEs
easier for SME owners to offer retirement should focus on:
savings plans to their workers.
improving basic skills;
Pulley acknowledged that the government has an
important role to play in supporting and assisting improving management education;
the growth and development of SMEs by filling in
gaps in the marketplace in the following areas: providing increased access to information;

create an environment that is conducive to assisting in the search for international


SMEs by making government regulations markets .
easy to understand, easy to comply with,
remedial rather than punitive, and to allow
corrections;

SUMMARY OF PANEL 2: "HEMISPHERICINTEGRATION: REMOVING EXPORT


IMPEDIMENTSFOR SMALLAND MEDIUM-SIZEDBUSINESSES11

Mr. Ritter's opening remarks focused on the He pointed out that the import tax structure canbe
protectionist tendencies of some Latin American another protectionist policy because it drastlcally
governments. He recommended that all countries increases prices for imported goods, thus forcing
adopt a national treatment agreement similar to that consumers to buy domestically produced products.
in NAFTAA, because protectionist activities benefit With a lower import tax structure, governrnents
only one local producer and a few officials, in the would collect more taxes, consumpuon . wou
form of bribes, leaving consumers to buy inferior mcrease and companies would not be compelledto
. by
products at dramatically inflated prices. bribe officials or falsify invoices. He concluded

70
emphasizing that any governmentally imposed competitive with rates given to large
impedimentmakes it difficult for small businesses corporations;
to pursuetheir sales, since they lack resources of
their larger competitors. If markets were free of Coordinate tax policiesamong counties to
these impediments, both tax revenue and apply indexed tax rates to SMEs both in
employment in the Western Hemisphere would value added taxes or capital tax;
increasedramatically.
And , education programs are excrernelly
Ms. Higgins de Ginnata spoke about three important to maintain a technological
parameters that must be developed in order to cutting edge.
supportsmall and medium-sized businesseswithln
the hemisphere: ethics, justice and equity. She Mr. Duggan acknowledged that .S. assistance
stressed that small and medium-sizedindustries can programs are not as strong as our European and
obtain advantages from market liberalizationand Japaansecompetitorsand that U.S. exporters tend
globalizationas long as host governments facilitate to be short-sightedwhen conducting international
and do not hinder their efforts. She proposed the trade. Obstacles that U.S. companies face when
followingtenets and recommendations: conducting business include: lack of sufficient
corporate data, inability to compete in numerous
Countries must support, promote or business deals due to limitations imposed b the
stimulate the development of SMEs; ForeignCorruptPractices Act, and their own lack
of knowledge of the language and the culture of
Promote flexible contracting rules so that Latin America. Solutions for the first two
SMEs can hire employees without problems could be accomplished through USTR
generatingoverwhelmingobligations. For working with its Latin American counterparts to
example, SMEs should be allowed to hire developa transparenttrading system and a uniform
personnel for a period of two years standardof ethics. A solutionto the latter problem
without generating obligations or could be accomplished through an Export
indemnificationsor application of the joint ManagementCertification Program, which would
labor contract; develop a recognized body of knowledge for
exportersand a standardizedapproach for teaching
Allow transactions, in which both the necessary exporting skills.
importer andexporter are SMEs, to occur
without payment of export or import Ms. Fitz-Pegadoinformedthe audience that in the
overcharges or customs duties, thus United States, the most significant obstacles that
facilitating competition with large small and medium-sized business face when
corporationsandincreasing the number of exportingare export "know how," access to trade
hemispheric-wide transactions; finance, and access to information on market
opportunities. She described how the U.S.
In order to achieve steady growth, Department of Commerce and the International
promote local laws and international Trade Administration'sCommercial Service assist
agreements that support the creation of small businesses to overcome these problems and
andinvestmentin small and medium-sized exportsuccessfullywithin the hemisphere. Public-
enterprises; privatesector partnerships such as District Export
Councils in the United States and a cooperative
Promote the creation of non-subsidized relationship between the U.S . and Foreign
financing sources for this sector, through Commercial Service, the U.S. Small Business
medium and long term credits, Administrationand the Small Business Association
of Brazil are fundamental building blocks for

71
together to secure Inter-American Developrn
supportingSMEs. Additionally,the Commercial .
Bankfundingto prov1 e compre ens1ve training
Service is opening Export Assistance Centers . . db . g to
small and medmm-s1ze usmesses.
throughout the country in conjunctionwith the
Small Business Administrationto provide "one-
Clark discussed three export-related
stop-shop" international trade counseling and
recommendations that were_adopted by the 1700
services for small and medium-sizedbusinesses.
delegatesduringthe June White House Conferenc
She encouraged the panelists and audience to
on small business. First, Congress and the
develop a concrete plan of action for increasing
cooperation between private sector organizations President should authorize and encourage the
and the public sector to better support small Export-Import Bank of the United States and the
businessesthroughoutthe hemisphere. Small Business Administration to sponsor
revitalizedfundprograms designed to providepre-
Fitz-Pegado introduced the Department of exportfinancing,unsecured working capitalloans,
Commerce's new publication, TradeAmerica: and transaction-basedloans and pooled loansrather
Toward Hemispheric CommercialIntegration,a thanbalance sheet and asset-based loans. Access
framework of how the Department will better to finance is one of the primary deterrentsfor
serve the U.S. business community, while small business exporters in · the United States.
supportingshared hemisphericgoals. Specifically, Second, the UnitedStatesgovernmentshouldstrive
the U.S. Commercial Service posts within the to further strengthen intellectual property rights.
WesternHemispherehave developedsub-regional Third, preserve the International Trade
trade development strategies, focusing on the Administration(ITA). ITA provides vital market
regionalinfrastructure needs commonwithineach research to SMEs and introduces these firms to
sub-region. These five sub-regions (Andean, overseas markets through a variety of programs.
Caribbean, Central America, MERCOSURplus ITA alsoprovidesthe business link to Government
Chile, NAFTA) address infrastructure throughits 26 AdvisoryCommittees, includingone
requirements to support the broader Hemispheric dedicated to SMEs, and through the 51 District
goals of commercial integration and Export Councils throughout the United States.
environmentallysound development. She closed Moreover, ITA has developed a unique and
her remarks by stating that in many Latin innovative pilot program called the National
American countries, a small number of large MentorshipProgram, which matches experienced
companies dominate the economies. She urged export companies with companies that are
that the private and public sectors should beginningto export.
encourage these dominant companies to
incorporatesmall and medium-sizedenterprisesin Clark's recommendationsfor removingbarriersto
their businessactivities. HemisphericIntegration were: replicate someof
the International Trade Administrations's
Mr. Garcia focused on the differences in the programs, establish public/private partnerships
definition of small businessand the technological such as District Export Councils, develop
and educationaldisparitiesbetweensmall business mentorship programs, and establish a
in Honduras and the United States. Small public/private sector clearing house for tradeand
businesses in Honduras may have as few as 5
commerce programs.
employeesand do not have access or the abilityto
utilize modern technology such as office
The commentsfrom the audience were as follows:
computers, and on-line informationsystems. He
asserted that this places Honduran SMEs at a
disadvantage when competingwith U.S. or other Over 40% of small business in Latin
nation's exporters. He strongly recommended America feel that they are disadvantaged
that all Latin American governments work in the abilityto competewith similarfirms
· the U.S. This comment relatedto their
in
72
access to capital, skilled and trained SMEs. Governments should attempt to
workers and information. minimize regulations and make them as
easy to understand and comply with as
U.S. sanitary restrictions employed by the possible.
FDA are, at times, too strict and are
viewed as a non-tariff barrier used to Promote the use and transfer of
protect U.S. competitors. technology.

The Americas need to develop a central Reduce the amount of regulations and
clearing house to increase access to trade export documentation needed through the
related information and two-way trade Free Trade Area of the Americas.
opportunities that all companies in the
Hemisphere can access. Seek Inter-American Development Bank
funding to implement training programs
Cnoclusinos for SMEs throughout the Hemisphere .

There was broad agreement that the nations of the Public sector and private sector
hemisphere should support the development of organizations should develop partnership
small and medium-sized businesses to ensure programs within the hemisphere to
strong economies and high levels of employment. stimulatethe flow of information and ideas
Additional conclusions were: to support SMEs.

Promote national and FT AA rules that Promote access to finance in competitive


stimulate the consolidation and growth of conditions.

73
PanelMembers
Panel One: "Generating Growth in the Small and PanelTwo: "HemisphericIntegration
• removin
Medium-Sized Business Sector: Cultivating Job ExportImpedimentsfor Small and Medium
Creation and Competitiveness " Business "

Luis de la Calle (Moderator) Thomas Ritter (Moderator)


Director of NAFTAA Office President
Embassy of Mexico Inter-Continental Business Associates, Inc.
United States
David Lizarraga
President and CEO Joyce Higgins de Ginnata
TELACU President
United States Chamber of Small Industries of the Guayas
Ecuador
Leonardo Pizani
Executive Director Martin Duggan
FUNDES Venezuela Business Center Executive Director
Venezuela Small Business Exporters Association
United States
Cassandra Pulley
Deputy Administrator Lauri J. Fitz-Pegado
U.S. Small Business Administration Assistant Secretary and Director General
United States U.S. and Foreign Commercial Service
U.S . Department of Commerce
Kenneth Valley United States
Trade Minister
Trinidad and Tobago Norman Garcia
President
Jose Camillo dos Santos Foundation of Investment and Export Development
Representative Honduras
Small Business Association of Brazil
Brazil Michael Clark
President
Atlantic-Pacific Technology
United States

74
FUNCTIONAL WORKSHOP IV:
A HEMISPHERIC INFORMATION MARKETPLACE"

Summaryof Discussions
SUMMARY OF PANEL 1: "PROTECTION OF INTEUECTUAL PROPERTY
IN THE INFORMATION MARKETPLACE•

The moderator and seven panelists made up the communicationgroupsand companiesthat promote
panel on intellectual property rights (IPR) works must work in partnership with authors.
protection.
The informationsuperhighwayis an important part
Summary of Statements by Panelists of the cultural revolution underway in the
HemisphericMarketplace. A free trade area must
The NII and HU (National Information give importance to the free circulation of goods
Infrastructure and Hemispheric Information and services. The industry producing intellectual
Infrastructure) will have great potential to provide propertyproductsis rapidly expanding; intellectual
increased access to vast resources of information property is a vital element of that business.
and entertainment products and services. The Several panelists commented on the need for
potential of the NII and HU will not be realized if technologicalmeansto stop and control the theft of
those information and entertainment products and intellectualproperty. One commentator noted that
services are not effectively protected. All the encryption alone is not enough. Strong national
wires, cables, computers and networks in the laws and enforcement is the key to success in
world will not create a successful NII and HII if preventingpiracy.
there is no content, and owners of intellectual
property will not be willing to put their interests at It is of paramount importance to the Hemispheric
risk if appropriate systems are not in place to marketplacethat intellectualproperty products are
protect their works. fullyprotected. Intellectualproperty issues should
form an integral part of our hemispheric
In the midst of this technological explosion, the discussionsand we should continue our discussion
establishment of clear domestic and international on this very important subject. Strong support of
norms for intellectual property protection is a intellectual property rights is critical to economic
matter of urgency for all. As several panelists growth.
noted, these are tough issues, requiring a
responsiblebalancingof the interests of creators in This is truly an excitingtime as we begin to realize
exercising the intellectual property rights of their the educational, social and commercial benefits
works and the interestsof users in obtaining access provided by the information superhighway. It is
to those works. difficult to imagine the extraordinary wealth of
resources that will be within our reach as we
In dealingwith these issues, we need to ensure that expand our links to include a hemispheric, and
creativegenius is not inhibited, but unleashed. ultimately a global, information infrastructure.
There must be a commitment to creators to protect One of the great challenges that confront us is to
the fruits of their labors while at the same time expand the flow of information in this new
ensuringthat the content of their works will be environment while contmumg to provide
availableto others. One panelist noted that "the meaningful incentives for creators of intellectual
actof creation of a work is magic activity" and that property. Creators and owners of content are

75
interactive telecommunications network Yet.
greatly concerned with how they will maintain . Ina
control over the exploitation of their intellectual · manner which does not mterfere with technical
.
property in this new digital environment. It was Protection and copynght management
.
information
observed that a combination of legal and technical The importance o f openmg telecommunicati ·
protection was the only way to achieve this. services and infrastructure to competition was also
discussed. It was also emphastzed that local
Technological innovation is key to controlling the software developers and. publishers must have
dissemination of intellectual property products. access to investment capita 1 to help develop the
There is a need to develop a system which tracks growth of collective works produced by groupsof
and monitors the use of copyrighted works. The individuals.
countries of the hemisphere should work together
to make sure that intellectual property laws are not Summaryof Panelists' Conclusions
rendered obsolete by technology.
The benefits of a Hemispheric Information
Several panelists commented on the need to change Marketplace are enormous in terms of the
the way we approach problems in the age of the consumer products to be offered and the
digital revolution. The digital revolution will make employment opportunities presented. They will,
information more compact, and the public will however, be limited in scope without strong
receive more information that will change our protection for intellectual property and
daily lives. Copyright law has to change as well. harmonization of copyright laws.
We must make sure the rights of creators are
balanced with the access of the public to There is an urgent need to provide strong and
information. Some of the copyright issues which effective intellectual property protection in the
need to be addressed include moral rights, works Hemispheric Information Marketplace. It is
for hire, first sale doctrine, copyright management necessary to harmonize copyright laws and
systems, distribution of works, to name just a few. reconcile the differences between authors rights
and copyrights. Harmonization in this area cannot
The importance of educating the public about wait until the year 2005. Given the rapid advances
intellectual property rights was also emphasized. in technology, it is important for us to work
Users of the information superhighway should be together now to harmonize copyright laws and to
educated to respect copyright on the digital take advantage of the many opportunities presented
highway. This education should take place in by the information marketplace that will be lost by
schools and will help the public understand at an inaction. A Western Hemispheric group of public
early age the importance of intellectual property and private sector participants should be formedto
rights. Universities should be encouraged to continue the discussion of these urgent issues and
improve and strengthen computer science to explore further ways to cooperate on these
education. issues.

Several points were made regarding the need to Copyright awareness is an important element of a
clarify contract laws to transact licenses in an successful Hemispheric Information Marketplace.

76
SUMMARY OF PANEL 2: "OPEN ACCESS TO THE INFORMATION MARKETPLACE"

The moderator and four panelists made up the (1) In technology, developments are
panel on open access: favorable. Compression technology is developing
quickly, and the movement is towards a single,
common technology, so that a common language
Summary of Statements by Panelists for delivery systems appears likely;

Lehman introduced the panel and noted that the (2) Tension is developing between delivery
subjects of the two panels (intellectual property systems and content providers, especially in the
protection and open access to the information division of rights between these two interests. A
infrastructure) are inextricably linked. consolidation is underway among both these
groups. Delivery systems need access to large
Valenti affirmed that both panels discussed subjects amounts of good content. If competition exists
indispensable to the future of the content providers. between delivery systems, then the content
He saw two primary roles for government: (1) provider has more influence.
guaranteeing access to the information
infrastructure, and (2) preventing monopolies from (3) Competition will continue to develop
stifling access. The government's role is to be an between global and local product. Keeping out
umpire, in assuring that the game is played fairly. foreign product and information is impossible .
Globo' s news channel with 500 thousand
Valenti affirmed the importance of consumer subscribers competes against CNN, which has 140
choice. Furthermore, if government avoids over- million. But this competition is a challenge , not a
management, prices will be reasonable. Abundant threat. Local product has an advantage in its own
choice is a characteristic of the new global market,becausemost people want to see their own
information infrastructure, meaning that consumer culture and their own people. Furthermore, in the
choices will be multiplied. Governments should let new world of abundant choice, there is room for
this growth in consumer choice take place without both local and global product.
interference.Imeed, governments will probably be
unable to control distribution networks, since The role of government should not be to set
transmissions will often come from outside the quotas, but to seek ways to encourage local
country. Advances in technology will permit production, such as tax incentives .
avoiding increased regulation. For example, in
some countries in the past, government control of Berman stressed that most companies in the
theater admission prices has led to decay of recorded music business have foreign linkages, that
theaters, and decline in attendance. Yet when their business is often global, and that the U.S.
prices were decontrolled, theater owners could industry does not dominate the world recorded
refurbish their theaters, and the public began to music business . The U .S. share of local markets
return. is determined by consumer choice, and varies from
20 percent to 80 percent.
The assertion that U.S. movies damage cultures of
the recipient countries is not true. "No one is The information infrastructure will be developed
more respectful of cultures than I. I believe that a only in response to creators and service providers
country's culture is too deeply rooted for movies to on one side and consumers on the other. The role
havethepowerto change it," said Valenti. of governments is to adopt rules to promote free
and open competition. Governments should use
Pecegueiroexploredhow open access would work incentives to encourage production of diverse
in practice. He noted three important points: cultural materials, rather than artificial restrictions

77
on consumer choice, such as quotas. "I say 'yes' (1) IPR protection is essential in North
South Amenca · . Thee need is for and
to government sponsorship of the arts, but 'no' to one
barriers," said Berman. clear-cut set of rules now.

In the IPR area, governments should act to ensure (2) Lessregulationon the part of government
a high level of protection. IPR is not just a U.S. 1s necessary. The temptation for
issue, since all creators are hurt by poor IPR government is to regulate, but free
protection, and good protection serves the interest compet1t1on1sbest. Everyone, including
of all creators. Indeed, good IPR protection consumers, will benefit.
stimulates production by local artists and
contributes to broader consumer choice. Proposalfor the Audience

Cisneros described the importanceof open access Manuel Ugueto, President of Promexportof
for new and existing telecommunicationservices. Venezuela,proposed that governmentsencourage
He emphasized the importance of new and the use of telecommunicationsand information
advanced technologies to enter into emerging technology to make more easily availableto all
markets. As an example he cited his new interestedpersons informationrelating to business
association with Hughes Communicationsand and foreign trade, including business intelligence
other companies from Brazil and Mexico to and trade contacts.
provide DirecTV to all Latin America and the
Caribbean, beginning in 1996. DirecTV is a Summaryof Panelists' Conclusions
satellitedelivereddirect-to-hometelevisionservice
developed by Hughes in the US. He explained Content will play a key role in the successful
how U.S. companieswith leading technologiesare emergence of a Hemispheric Information
entering into associationswith local companiesin Infrastructure. Panelists supported· open access
other regions of the world to providetheir products and protectionof intellectualproperty as essential
and services. Leading-edge technologiessuch as to ensure that creators will make their content
DirecTV "could change the (Latin American) available in the new digital world. Hemispheric
region very fast as they will reach every corner of representativesshould address these issuesas they
every country and bring them closer together." work toward hemispheric integration.
The Latin American market is very large and is in
need of new services. Cisneros estimates that The Hemispheric Information Marketplaceoffers
subscribers of DirecTV could reach 5 million for enormouspotential to increase consumerchoice.
the year 2000, while independentsources estimate All panelistssupported open access and cautioned
as many as 15 million. Only open access will against artificial government barriers limiting
allow new technologies to reach new markets, to consumer choice. There was general supportfor
promote commerce, and to bring people and the ideathat diversity characterizes the newworld
countries together with one another. of digital compression.

Cisneros also called for less regulation by The hemispheric infrastructure will be developed
governments. He noted that governments are onlyif it responds to the creators and providersof
tempted to regulate, but change comes so fast content, and to the consumers.
regulations are soon out of date.
Panelistsalso noted the need for strongprotection
In closing, he emphasizedthese points: of intellectualproperty and open accessas thebest
ways to stimulate development of local products
and meet the cultural needs of individualnations
Several mentioned that governments shouls

78
consider incentives to increase local production of technologies. Several noted that the new
content, rather than use quoras or other artificial technologies made keeping out foreign produces
restrictions on consumer choice. imposs ible .

Several panelists noted the importance of One audience participant noted that the information
technological developments . One panelist noted infrastructure should provide full acce to
that a single digital compression technology has economic and commer cial information to aid trade
emerged as the industry standard and believed this faciliration efforts , and encour aged support for
would encourage investment in the new these activities .

79
PanelMembers
Panel One: • Protection of IntellectualProperty Panel Two: "OpenAccess to the informatio
in the lnfonnation Marketplace• Marketplace•

Bruce A. Lehman (Moderator) Bruce A. Lehman (Moderator)


Assi stant Secretary of Commerce and Assistant Secretary of Commerce and
Commissioner of Patents and Trademarks Commissioner of Patents and Trademarks
United States United States

Hon. Ron Brown (Co-chair) Jack J. Valenti (Co-chair)


Secretary of Commerce President
United States Motion Picture Association of America
United States
Antonio Mille (Co-chair)
President Alberto Pecegueiro
Instituto Latino de Alta Technologia Director General
Informatica y Derecho Globosat
Argentina Brazil

Al Teller Jason A. Berman


President Chairman and Chief Operating Officer
MCA Music Entertainment Group Recording Industry Association of America
United States United States

Carmen Quintanilla Gustavo A. Cisneros


Director President and CEO
Derecho de Autor Cisneros Group of Companies
Mexico United States

Jose Antonio Rios


President and CEO
Galaxy Latin America
Venezuela

Kenneth Wasch
Executive Director
Software Publishers Association
United States

Jose Maria Fernandez Unsain


President
General Society of Mexican Writers
Mexico

80
FUNCTIONAL·woRKSHOP V:
"PRIVATESECTORFINANCING:
INFRASTRUCTURE AND PRIVATIZATION"

Summaryof Discussions
Theprivatesectorfinancingworkshopfocussedon the continuingneedfor hemisphericgovernmentsto promote
privatizationand liberalizationof trade and investmentas criticalstepsfor attractingforeign private capital
andfor expeditingeconomicintegrationof the hemisphere. Someof the workshoprecommendations--such as
continuedand sectoraldiversificationof privatizationefforts, developmentof capitalmarketsthroughpension
and insurance reform, and improved reapportionmentof risk between project developers, multilateral
developmentbanks, and regionalgovernments--were also echoedin otherForum workshops(e.g., Energy
workshop).

The financing workshopconsistedof two panels which dealt with "TheRole of Governmentsin Attracting
Private Capital to InfrastructureFinancing"and with "The Role of Private Financingin Infrastructure
Projects." Bothpanelsstressedthe criticaldependenceof infrastructure
funding on private capitalflows and
the relatedrequirementincumbenton governmentsto createinvestmentenvironmentsthat can attractprivate
investment.

SUMMARY OF PANEL 1: "THEROLE OF GOVERNMENTSIN ATTRACTINGPRIVATE


CAPITAL TO INFRASTRUCTURE
FINANCING"

The panel unanimously stressed the continuing includingexpandeduse of contract-based financing


need for hemispheric governments to promote techniques (e.g., limited-recourse and non-
privatizationand a businessenvironment conducive recourse financing, debt/equity swaps), as well as
to trade and investment. The panel also the speedy development of domestic capital
recognized that financially overburdened markets and related instruments with long-term
governments in Latin America are increasingly maturities which are able to attract foreign
unableor reluctantto provide sovereign guarantees investment.
to infrastructure projects and that capital provided
by foreign government credit agencies and The need to link domesticsocial development goals
multilateral banks is insufficient to keep up with with new privatizationand market-driven economic
the growth in the demand for project financing. programs in poorer economies was raised by
As a result, the implementation of future Finance Minister Rey of Haiti. In rebuilding
infrastructure projects will increasingly become Haiti's economyand creating a stable environment
dependent on inflows of private capital from for business, her government must concern itself
abroad. with the social implications ensuing from public
sector divestitures and the adoption of other
The panel noted that a shift from public to private market-orientedinitiatives. These problems range
risk bearing requires hemispheric governments to from ensuring that divestiture by government
foster stable, adequately regulated macroeconomic monopolies may not just result in the creation of
environments which can gain foreign investors' foreign-dominatedprivate monopolies, to fostering
confidence. It also requires accelerated a rapid upgrade in the country's professional
development of expertise in the private financial expertise, to implementing efficient transfer
services sectors of Latin American countries,

81
programs of privatization-derived revenues to the hemispheric governments concerning the type and
funding of social programs. degree of assumable nsk related to future
infrastructure projects; educate private and public
I IC
To expedite adoption by hemispheric governments sector entities on each other s needs and concerns
of processes that would promote cross-border related to infrastructure financmg ; study ways to
capital flows, the panel proposed the creation of a enhance cooperation between export credit
public/private sector group that would operate agencies , multilateral development banks, and
within the structure of the Hemispheric Forum and commercial banks; and develop recommendations
fulfill one or more of the following functions: which would address private investors' concerns
develop and recommend guiding principles to about investing in Latin America .

SUMMARY OF PANEL2: "THEROLE OF PRIVATE FINANCING


IN INFRASTRUCTUREPROJECTS"

With estimated hemispheric annual requirements privatized infrastructure projects in Latin America
for infrastructure capital in the $60 billion range have been already targeted by foreign investors
and actual capital flows averaging a third of this securing private capital flows to less viable
amount, the need for supplementing official with infrastructure projects will require additional
private fmancing and developing creative funding legislative and regulatory reforms, as well as
mechanisms was again emphasized. It was noted microreforms aimed at standardizing hemispheric
that inadequate financing is a non-tariff barrier to contractual management procedures that would
trade--a continuing challenge to be overcome by address problems such as contract compliance and
U.S. firms doing business in Latin America and a arbitration issues. Indeed , privatization policies
reason for stalled economic development in the and initiatives in the region have out paced
region. regulatory reforms needed to allay investors' risk
concerns.
The panel concurred with the previous panel's
observations about the need for governments to A major concern of foreign commercial lenders is
improve macroeconomic stability in hemispheric the possibility that local project developers may be
markets, adopt regulatory and legislative measures unable to service long-term debt due to adverse
that would reduce foreign investors' risks, develop actions by host country governments . Such
viable capital markets through pension and concerns have inhibited commercial lending to the
insurance reforms, raise the efficiency of region unless the lending is fully covered by export
government agencies responsible for overseeing credit agency guarantees. One panelist suggested
infrastructure development, and improve through that debt-service performance risk related to
education the ability of domestic banks to manage infrastructure projects be hedged through a joint
capital flows. In the view of one panelist, pledge by regional governments to protect the
proposed lower Congressional appropriations to projects' assets. The panel concurred in urging
multilateral banks represent another threat to the credit agencies, multilateral banks, and regional
competitiveness of U.S. firms bidding for governments to jointly develop new financing
infrastructure projects. approaches and insurance initiatives that would
alleviate private investors' and commercial banks'
Current inefficiencies in the use of capital for risk exposures, thereby attracting new capital to
infrastructure projects by public agencies, local infrastructure projects. It recommended the
project developers, and local banks was also raised creation of a public/private working group to study
as an important reason for the stalling of many and recommend such initiatives.
projects. Since a majority of the more profitable

82
Conclusions functional public/private sector group be created
und er the auspices of the Forum to explore how
The panelists recognized that the Forum concept is export credit agencies and multilateral banks could
a useful venue to advance hemispheric integration , join tly cooperate in providing private investors
gain valuable inputs from the business community insurance and/or guarantee cover for a range of
across the hemisphere , identify business facilitation pol itical and comme rcial risks in Latin America.
issues, and foster public-private partnerships . The group is to also study and make
They also recognized that hemispheric integration recommendations to governm ents through the
is contingent on the simultaneous creation of free Forum on innovative appro aches that could enable
capital flow zones along with free trade zones. both public and private lenders and investors to
jointly hedge project-related risks in the region and
The panels recommended that, in view of the thus broaden the current base of funding available
decreasing extension of sovereign guarantees, a to Latin America .

83
PanelMembers
Panel One: "The Role of Governments in Panel Two: "The Role of Private Financing.
Attracting Private Capital to Infrastructure Jnfrastructure Projects" in
Financing"
Enrique Iglesias (Moderator)
Rita Rodriguez (Moderator) President
Board Director Inter-American Development Bank
Export-Import Bank
United States Roger A. Dorf
President
H.E. Ubaldo Scavone AT&T Network Systems
Minister of Industry and Commerce United States
Uruguay
Darin P. Narayana
H.E. Marie Michelle Rey Executive Vice-President
Minister of Finance and Economy Norwest Bank International
Haiti United States

Dr. Carlos Eduardo Sanchez Armando Castelar


Secretary of Trade and Investments Board Director
Ministry of Economy, Public Works and Services National Bank for Social and
Argentina Economic Development
Brazil
Alfredo Volio
Board Director Ashoka Mody
National Bank of Costa Rica Principal Financial Economist
Costa Rica World Bank

84
FUNCTIONALWORKSHOPVI:
"PREPARINGOUR WORKFORCEFOR THE AGE OF
COMMERCIALINTEGRATIONAND HEMISPHERICFREE TRADE"

Summaryof Discussions

Thesuccessof the processof WesternHemispherecommercialintegrationandfree trade -- that will culminate


withthe creationof a Free TradeArea of the Americasby the year 2005-- dependson workplaceissues such
as worker skills, labor-managementcooperation,and labor standardsthat affect the productivity of the
workforce.Theseworkplaceissues,in tum, havealsoan importantbearingon how the benefitsof commercial
integrationand hemisphericfree trade are distributedthroughoutthe laborforce.

SUMMARY OF PANEL 1: "SKILLSDEMANDEDBY THE ECONOMYOF THE FUTURE"

Education is the most salient challenge facing the Many of the jobs that are being created by the
Americas. There is a large basic educational economies of the Western Hemisphere tend to be
1
deficit in the hemisphere that requires substantial low quality -- low wages and benefits.
invesnnents in human capital.
Basic education and training has traditionally been
The demand for educated and well trained workers the responsibilityof governments in most countries
is increasing rapidly in the dynamic global of the hemisphere.
economy; such demand is projected to continue to
increase into the 21st century. . This is changing, however, because of 1) the
insufficiency of public financing for education; and
In a rapidly changing world, uncertainty is a 2) the more active role being played by employers
permanent concern. The skills of today will not be in workforce training.
the skills of tomorrow. Many of the jobs that exist
today will disappear or be dramatically Closer cooperation between the public and private
transformed. sectors -- both labor and management -- in
education and training is essential in order to
Changes in the demand for skilled workers result prepare the workforce of the future and reap the
from several factors, principally technological benefits of commercial integration and free trade .
change, more integrated and flexible production
processes, and increased international trade. Workers also have a responsibility for their own
education and training. Workers and their
Demand is growing for workers with skills and representatives must accept the reality of
knowledge of teamwork, problem solving, continuing education and training throughout their
communication, and quality control. The working lives.
marketplace in most countries, however, is
deliveringan insufficient supply of such workers. Educational systems in the hemisphere have tended
to be very structured . But flexibility is what is
needed today .

1
Mr. Jose Antonio Guzman disagrees with this
point.

85
Adversarial labor-management relations and The primary responsibility of the government .
. d d . n in
the area 1s to e ucate an tram the poorest and
mutual suspicions must be overcome in order for
labor and management to work together in most disadvantaged segments of the population.
preparing the workforce of the future.

SUMMARY OF PANEL 2: "ROLEOF WORKPLACEPRACTICESIN ENSURING THAT THE


BENEFITS OF ECONOMICINTEGRATIONARE WIDELYDISSEMINATED"

Productivity is key in determining competitiveness allows them to pay higher wages, which in tum
and which companies and countries will benefit the helps to distribute the economic benefits of
most from the process of hemispheric economic economic integration more broadly .
integration.
The successful Varga enterprise in Brazil was
Sharing the fruits of productivity gains with identified as a notable example of the
workers tends to increase worker motivation and implementation of high-performance work
promotes further productivity gains. practices: it engages in continuous training, has a
very high employee retention rate , encourages the
Workers are also consumers. As their wages and use of teams, shares information on company goals
income rise, they will have the ability to purchase and strategies with its employees, rewards workers
more products and services and stimulate national for exceptional performance, practices democratic
economies. management2, and encourages employee
empowerment. In addition, it has contributed to
A growing number of firms throughout the the development of new entrepreneurship as well
hemisphere is recognizing the need to adopt as to a steady decrease in the high school drop out
workplace practices in which workers are seen as rate of the community where it operates.
assets to the enterprise rather than merely costs.
Observance of these non-adversarial, enlightened
More companies are realizing that it is in their best labor -management practices can contribute
interest to adopt innovative human resource and significantly to the success of hemispheric
workplace practices and standards such as skills economic integration.
trammg, continuous learning ("turning the
workplace into a virtual classroom"), information A diverse workforce is another feature of
sharing, employee empowerment , flattened companies that implement high performance work
organizational structures, and win-win labor- practices. Diverse workforces tend to be more
management partnerships -- as a means to deliver creative. To the extent that a diverse workforce
high quality, low cost products and services that replicates the make -up of the customer base it
meet the demands of their customers . services, this is very positive for business.

Cooperative labor-management relations contribute Conclusions


to the enhancement of economic efficiency ,
productivity, and more equitable wage distribution. Commercial integration in the Americas is already
Adversarial labor-management relations in the long a reality .
run serve neither workers nor employers .

Firms that have implemented high-performance


work organizations tend to train workers 2
Mr. Jose Antonio Guzmlmfinds "practices
extensively and achieve higher productivity. This
democratic management" extremely vague.

86
The economies of the Americas need to grow and Workplace practices that create better jobs are
integrate. To be able to achieve the benefits of good for workers and businesses . Better job s lead
integration, these economies must have a qualified to better business results .
labor force. Training can also help in attaining a
better distribution of income and provide The International Labor Organization is the
opportunities for upward mobility . premier international organization that addresses
labor standards issues.
Countries of the hemisphere must meet the
challenge of educating and training the workforce The interest generated by the Denver Workshop on
of the future, a monumental task that will require the "Role of Workplace Practices in Ensuring that
close cooperation and shared financial the Benefits of Economic Integration are Widely
responsibility between the public and private Disseminated" suggests that further discussions
sectors. among governments, employers and workers on
workplace issues in the context of closer
A well-trained and productive workforce will hemispheric economic integration at future
4
permit countries of the hemisphere to benefit more hemispheric gatherings are desirable and useful .
fully from the fruits of economic integration.
It is evident that there is a vital need to share
It is imperative that workers and management information on workplace issues in the hemisphere
engage in a continuing dialogue at the enterprise in the context of closer economic integration.
level in order to increase productivity and quality.
Distribution of these summary notes and
Certain workplace practices and standards can conclusions to interested organizations and other
promote the wider dissemination of the benefits of fora will contribute to a better understanding of the
commercial integration andhemispheric free trade. relationship between workplace issues and the
Thus, workplace issues should be taken into process of hemispheric economic integration.
account by the architects of the Free Trade Area of
the Americas. 3

Mr. Guzman notes the following: • However,


this does not mean that labour standards and conditions Mr. Guzman notes that: • further discussion s
mustbe equalizedbetweendifferentcountries. Labour on workplace issues in the context of closer hemispheric
standardsare nationallydetermined,and this should economic integration at future hemispheric gatherin gs
remainthis way." may be desirable and useful ."

87
Panel Members
Panel One: "Skills Demanded by the Economy Panel 2: "Role of the Workplace Practices in
of the Future 11 Ensuring that the Benefits of Economic
Integration are Widely Disseminated"
Hon. Joaqufn F. Otero (Moderator)
Deputy Under Secretary for International Affairs Hon. Joaquin F. Otero (Moderator)
U.S. Department of Labor Deputy Under Secretary for International Affairs
United States U.S. Department of Labor
United States
H.E. Jorge Arrate Mac Niven
Minister of Labor and Social Welfare Hon. Edmundo Gonzales
Chile Deputy Assistant Secretary for the American
Workplace
Luis Anderson U.S . Department of Labor
General Secretary United States
Inter-American Regional Organization
of Workers (ORIT) William Doherty
Director
Jorge E. Mattoso American Institute for Free Labor Development
Professor United States
Centro de Estudios Sindicais e de
Economi a do Trabalho Beatrice Rangel Mantilla
Universitara de Campinas Vice President , Corporate Strategies
Brazil Cisneros Group of Companies
Venezuela
Jose Antonio Guzman
President John Scully
Confederaci6n de la Producci6n y del Comercio Colorado Vice President
Chile US West Communications
United States

88
PlenaryRemarks

WesternHemisphereTradeand CommerceForum
Denver, Colorado
July 1-2, 1995
Opening Remarks

Hon. Ronald H. Brown, U.S. Secretary of Commerce


Hon. Federico Pena, U.S. Secretary of Transportation
Ambassador Michael Kantor, U.S. Trade Representative
July 1, 1995
Remarks by
The Honorable Ronald H. Brown
Secretary of Commerce, United States of America
July 1, 1995

Good morning, and welcome to this historic We know that freer trade brings greater prosperity .
gathering. The U .S. alone stands to create two million more
jobs as Latin American incomes continue to climb
LastDecember, every elected Head of State in the and U.S. exports increase over the next eight
Americas and the Caribbean gathered to embrace years. Economic growth in the rest of the
the idea of hemispheric integration. They hemisphere - currently twice that of Western
acknowledged the primary role of trade and Europe-- will in turn be fueled by increased U.S.
commerce in bringing our nations together. And demand for increasingly sophisticated Latin and
they endorsed a Free Trade Zone of the Americas Caribbean products .
to further strengthen hemispheric bonds of
Commerce and cooperation. It is not surprising that the private sector is
pioneering the integration process. What is
Yesterday, Trade Ministers from throughout our heartening is the enthusiasm with which
hemisphere met to chart a navigable course toward governments across the hemisphere have embraced
that Free Trade Zone: to weave NAFTA, your goals and ideals, and have made free market
MERCOSUR, the Andean Pact and the economic policy a cornerstone of our regional
hemisphere's many multilateral and unilateral foreign policy.
market-opening initiatives into a seamless tapestry
of trade. Our embrace of these principles is driven by an
understanding of the link between our economic
Today, it is my pleasure as United States Secretary goals and the hemisphere's social and political
of Commerce to formally welcome to this city and goals.
to the Plenary Session of the Hemispheric Trade
and Commerce Forum the men and women who Stable governments make for stable markets.
truly began and are still building what has become Nations thrive when an educated and motivated
known as the Miami Process: you, the population has the opportunity to fully participate
businessmen and women who have driven the in and equitably profit from a growing economy.
process of hemispheric integration one contract or Our environment will be protected when growing
partnership or investment at a time. prosperity allows families and governments to look
beyond immediate needs and plan for a sustainable
The Clinton Administration promised to create a future.
new relationship between the public and the private
sectors. And this week, we have brought hundreds As proud as we are at Commerce and in the
of private sector leaders from throughout the Clinton Administration of what we have done, we
hemisphere together with trade ministers and understand that the private sector is and must be
government officials, for the express purpose of the heart and soul of any export strategy . You
learning from you how best we might speed have already proven that trade agreements are not
creation of a Free Trade Area of the Americas. necessary for business accords .

Hemispheric integration is the bridge that will unite This forum and the days and nights surrounding it
us in creating a hemisphere of opportunity. will unquestionably prove a catalyst to new
friendships and partnerships, to future trade and
further integration .

93
But remember our larger mission: If ministers and resources available on-line throughout the Western
governments are to find a course to free trade and Hemisphere .
integration, it is you who must draw the charts .
But as we take time to explore these issues and
Over two days of conversations and workshops you areas in depth, we must keep in mind as well the
will have an unprecedented opportunity to help us. larger picture and our greater goal.
Together, we will inspect, illuminate and
deliberate the most difficult and important trade We have come to Denver because hemispheric
integration speeds economic growth. And
I
issues our hemisphere faces. We will have a
chance to learn firsthand your ideas, frustrations, economic growth means better lives for our
and priorities with the immediacy and impact only people.
face-to-face communication delivers .
Three days from now my country will celebrate its
Then, out of these discussions will be distilled a Independence Day -- as our Canadian friends are
final report -- a more precise and detailed record celebratingtheir national holiday today -- the 219th
of the ideas generated over three days in Denver. anniversary of the United States becoming the first
I believe these will prove an invaluable nation in the New World to sever political ties with
illumination of the options before us. the Old. We set a course that the nations of this
hemisphere have followed up until almost the
Today and tomorrow we will focus on sectors or present day.
issues of particular importance, including: key
sectors like telecommunications and the But even as we were all throwing off political ties
information technology; sustainable development; to the Old World, we still looked there too often
intellectual property; legal and regulatory for economic and cultural guidance . As the 21st
obstacles; and infrastructure finance . Century approaches we are changing that -- here in
Denver this week, across the breadth of this
The telecommunications sector will receive special hemisphere a million times a day. We are looking
notice. The Commerce Department's National to our neighbors for support, for allies, for
Telecommunications and Information economic and political ties contact and for creation
Administration is joining with a variety of private of a shared history and a varied but common
sector companies for a series of demonstrations culture.
focused on technology's potential to speed
integration and economic growth . As all of our populations grow and diversify and
achieve; as the commercial leadership of you in
America's Healthnet, one of our pilot projects, is this room carries our hemisphere closer to full
a telemedicine program joining Costa Rican integration -- the growing economies and thriving
doctors and patients with U .S. medical providers. cultures of the Western Hemisphere are coming
AgriNet Americas, our second pilot project , is together to create an era even greater than an
geared toward creating a global marketplace for "American Century" -- to build a century of the
small and medium-sized companies . Focusing on Americas.
agribusinesses, AgriNet will make new
technologies, market information and other Thank you for coming . I look forward to hearing
directly from some of you, and to creating a
profitable and productive day for us all.

94
Remarksby
FedericoPeiia
Secretary of Transportation
July 1, 1995

I want to congratulate my colleagues at We ought to assist our law enforcement officers


Commerce, USTR, Labor, and elsewhere m every way we can, otherwise all the trade and
government for their efforts to create an tourism we're working to develop this week, will
environment in which all nations of this be impeded by a few people. I encourage you --
hemisphere-- all nations -- can grow and prosper. don't let that happen.

I am pleased to have been invited to address this Last November in Tampa I hosted a productive
conference, because my being here serves to pre-Summit meeting of 12 of our hemispheric
acknowledgethe critical role transportation plays transportation ministers. We knew the potential
in fostering international trade. Simply stated ... for growth opportunities.
we deliver.
In 10years, we could see an 80 percent increase in
I know it's a tried analogy, but transportation air traffic between North America and Latin
really is the lubricant that makes our system of America... a 40 percent increasein cargo between
internationalcommerce run smoothly. our ports.

Inefficient and congested transportation systems In 10years, truck traffic in the United States could
increaseproductionand distribution costs, lengthen grow by 21 percent ... rail traffic by 16 percent.
delivery times and make them unreliable, and
cause excessive losses and damages. The less Think of the jobs that could produce. But it will
efficient our transportation systems are, the less happenonly if each country, my country included,
trade there is ... and with less trade, the lesser putsthe tools in place to prepare for this growth in
prosperity. 10 years -- and does it now.

Thisis really a very simple and direct relationship So, my colleaguesand I came up with a blue print.
... but one that seems difficult for some to grasp.
Clearly, though, Ron Brown and Mickey Kantor We said we need to improve planning and
understand that fundamental relationship, and financing of infrastructure, bringing the private
today, I will talk about the opportunities we have sectorin ... we identified regulations we would be
in common -- the obligation we have -- to build a better off without ... we prioritized technologies
great transportation system. that would improve the efficiency and
environmental friendliness of transportation
Unfortunately, this week in California we were systems . . . and we identified ways we may
reminded of a common problem: the security of harmonize construction, safety, and operating
our transportationsystem. regulations, so each country plays by the same
rules.
We are democracies, and we cannot have one
dangerousperson threaten millions of Americans Most important, we identified areas where we
traveling by air ... or a gang terrorize Tokyo's could cooperate.
subway system . . . or pirates in South America
hijack containers en route from port to mland Every country is embracing change -- some faster
than others. Much progress has been made in all
destinations.

95
transportation modes aviation . . . trucking ... We agreed drivers of trucks and buses h
maritime . .. and rail . comparable safety and operating knowledge have
. and
skills in order to be I1cense -- we cooperated .
Let me give you a quick report on that progress, developing compatible driver standards -- and that
starting with aviation. is now working well.

In February, Canadian Transportation Minister If my friends Ron Brown and Mickey Kantor visit
Doug Young and I signed an open market aviation our border crossmgs and see trucks !med up for
agreement. It is worth billions of dollars in miles, they might read that as a good sign -- plenty
economic development and has the potential to add of trade going on. But don't ever tell that to a
thousands in new jobs to cities in both countries . truck driver stuck in the congestion, unable to meet
We' re already seeing a 40 percent increase in a delivery deadline ... or to the manufacturer that
airline flights between the U.S. and Canada. has to shut down its assembly line because it's just-
in-time delivery hasn't arrived.
And in June, the United States and Brazil reached
an agreement that increases cargo charters by How do we speed the processing and cut
almost 30 percent a year. congestion and bottlenecks? Through joint
planning and technology -- specifically, intelligent
We have liberal agreements with Mexico, transportation systems.
Costa Rica, El Salvador, Guatemala, and Chile.
We' re seeing great growth in freight traffic with At the Nogales, Arizona and Otay Mesa,
South America, up over 20 percent last year. California border crossings we will have
operational test programs, starting next year, to see
Recent events in the United States and throughout if electronically we can check bills of lading,
the world, however, remind us that we must carrier credentials, safety records , and vehicle
constantly be focused on aviation safety and weight even prior to the shipments' arrival.
security. We must meet the standards of the ICAO
and I hope even exceed those standards . My own As an alternative to trucks crawling through
Federal Aviation Administration stands ready to congested border crossings, we ' re exploring the
provide whatever technical assistance may be feasibility of moving goods by vessels that could
desired by any nation. Reliance on aviation is so safely navigate both ocean and inland waterways.
enormous given the great distance in our Only about 3 percent of goods transported between
hemisphere, that this commitment for safety and Mexico and the United States travel by water.
security must be our highest priority -period.
But if you can visualize on a map, there 's great
Now, in the area of trucking, I have two main potential for a Maritime System of the Americas,
concerns -- one is safety (you will hear about starting from the Gulf of Mexico and the
safety a lot today); the other is facilitating cross Caribbean Sea ... up the Mississippi River and all
border movements. of its navigable tributaries ... and to the north, the
St. Lawrence and Great Lakes.
We found when negotiating NAFTA, our countries
had different safety standards. We could have set My department's Maritime Administration has
our mutual standard to the lowest common been holding meetings with shippers and cariers
denominator, but we did not. Instead, we are and port groups from all the NAFTA countnes.
striving for the highest possible safety standards, We' re fmding interest, and we' 11 continue 10
and that is the model I would like to use for the explore this concept.
hemisphere.

96
Our ports and those throughout the Americas documentsfor the shipment are cleared before the
appreciate the importance of becoming more cars reach the border.
efficient. Additionalcapacity and new intermodal
equipmentare needed, land side connectionsmust Let me end on a personal note: There is no issue
be improved, work rules need to be re-evaluated. I have spent more time on as Transportation
Throughoutthe region, we see our ports striving to Secretary, than the relationshipbetween the United
rise to the occasion. States and our trading partners.

Finally, on rail, we are excited about the This year, we've taken many steps. But the real
opportunitiesthat will come from the move toward test will be in 10 years ... to see if we have
privatization. For example, up to 49 percent airports to handlethe 80 percent increase in traffic
foreign, private ownership in Mexico's railroad, -- and do it efficientlywith a continued high-level
the Ferrocarriles Nacionales de Mexico, will now of safely . . . to see if we can build a Maritime
be allowed. System of the Americas ... to see if we can get
truckersacross borders without congestion ... and
I cantell you that U.S. rail carriers are expressing improve internationalrail connections.
initial interest, because Mexico is one of their
fastest-growingmarkets. Foreign investmentcould I lookforwardto our discussionstoday as a way to
boostrail utilization,and encourage modernization buildon the work I and eleven of my counterparts
of some existing routes, and new connections started last October in Tampa. I believe that the
between our countries. time is right to convene a meeting of all transport
m1msters in the hemisphere to develop
Our carriers and the Ferrocarriles Nacionalesde collaborative, strategic approaches to enhancing
Mexico have already undertaken many initiatives the efficiency,safety,and security of our transport
to improve connections; they've established systems. We have invitedour colleagues to Miami
privately financed rail terminals, so shippers can on August2 to join us in planningfor that meeting.
consolidate operations; and they've inaugurated Through a cooperative initiative, I am confident
despachoprevio, a systemsimilar to what we hope that we can convert the many challenges and
to do for our truckers, where all the necessary opportunitiesthat confront us into real progress.

Thank you.

97
Remarks by
AmbassadorMichael Kantor
United States Trade Representative
July 1, 1995

It is a pleasure to speak to you today and welcome a prosperous middle class and fostering stability
you to this beautiful city. with our neighbors.

American Presidents in the past have made an we took the first steps to build a new road to
effort to bridge the vast distances between the prosperity last December when the nations of the
United States and Latin America. A half of a hemisphere met in a historic Summit of the
century ago, Franklin Roosevelt, a great President Americas in Miami and pledged to create a Free
who realized the need to engage our country in the Trade Area of the Americas by 2005. This week
world, and in this hemisphere, termed his desire we are here to begin the hard work of fulfilling
for the Americas, a "Good Neighbor Policy. " that vision .

A generation later, President Kennedy, who It is a vision rooted in the dramatic changes in this
understood the same need for partnership with our hemisphere. Over the last 20 years , Latin America
neighbors, advocated an "Alliance for Progress." and the Caribbean has witnessed dramatic and
historic economic and democratic revolutions.
Both of these efforts recognized the importance of New leaders are casting off the shackles of decades
expanding trade as a road towards common of heavy government intervention and trade
hemispheric prosperity . Yet, despite good protection . Along with the economic reforms in
intentions, these efforts rarely moved from rhetoric Latin America have come striking political
to action. changes. The only country in the hemisphere now
with a leader who is not freely elected is Cuba.
Now it is time for a partnership that is both a good
neighbor policy and an alliance for progress. Now The results have been stunning . The "lost decade"
it is time for concrete actions to move beyond of the 1980s has been replaced by found
rhetoric, to a reality of partnership, mutual opportunities in the 1990s . Inflation rates which
prosperity and growth. reached several thousand percent in some countries
have fallen to single digits in most nations. Latin
President Clinton understands the need to move America and the Caribbean is now the second
beyond rhetoric to reality. That's why he has fastest growing region in the world.
fought so hard to expand economic ties in this
hemisphere and around the world. Strengthening the economic ties among the nations
of the Americas will cement recent economic
He has dedicated his presidency to restoring reforms, foster growth, build the middle classes
opportunity for the American people. He and strengthen democracy. This is not time to sit
understands the future prosperity of working back and hope for the best.
families in this country is linked to those in the rest
of the world. The United States benefitted from these economic
reforms in the hemisphere. U.S. exports to this
He is committed to social progress, not just in this region exploded from nearly $31 billion in 1985 to
country, but throughout the world because it is in nearly $93 billion in 1994, creating over 600,000
our interest, too. Expanding trade with Latin new U.S. jobs. If trends continue, U.S. exports
America will foster growth in the region, building may reach $232 billion by 2010, greater than our
combined exports to the E. u. and Japan. Latin

98
Americ.an.5spend 40 cents of every dollar spent on to createJobs.fostergrowth and rai e srandards of
trade on U.S. goods. These benefits spread living throughout the hemisphere.
throughout our economy. benefitting small
businessesand large. from high-tech companies co As bu ·ine men. you all have ,•ital roles to pla_.
farmers and everything in between. Trade agreemexn are mere pieces of paper if the
do not ccompUsh the goal of facilitating and
Just ask the folks at Blue Mountain Arts. a small e.~ tradeam fo tering growth. That i why
company with 100 employees in Boulder which we ba, e combined chi meeting of the trade
makesgreetingcards. In business since 1971. they ministers with a bus~ forum. We mu t hear
now export cards throughout Latin America and your conce~ and qu tions. We mu t move
receive 25 percent of their revenue from forward together. a partners.
internationalsales.
In addition, you can play an important role in
Expanded economic tie in the Americas are educatingpeoplewhy this is in their intere t . There
benefitting all countries, though. ow we have a are many people who believe it is better to cut
historic opportunity to take major steps toward ourselves off from each other and they play on
further growth and hemispheric pro perity. people' fears. We must w rk together to build an
Ff AA that people will support.
Yesterday, we began to take those steps. We had
a very productive day. We began to turn the Some now question whether we can achieve the
dreamand rhetoric of Miami into the reality of loftygoalsof the Miami Summit of the America .
concrete agreements. I say we can and we must.

All of us recognized that we have a historic I say we have a historic opportunity to build a
opportunity to promote growth and create jobs in future for this hemisphere based on growing and
this hemisphere. But with that opportunity comes pro pering together.
responsibility. We pledged to work together to
identify and then eliminate barriers to trade in this l say no one prospers if they hide behind walls of
hemisphere And we must start now. Ten years is fear.
really not such a long time.
We face two clear choices for our future.
We must devote ourselves to the task of fostering Fortunately. the example of hi tory is clear . One
integration in the hemisphere and ensuring that it path is cutting ourselves off and building walls to
occurs in a rational way. That means a common divide us. History shows that path leads to
set of trading rules for the whole hemisphere, ecoocrnicaIXi political calamity. The other path -
basedon highstandards of openness,not a maze of openingup, engagingin trade - lead ro prosperity
agreements that complicate, instead of enhance, and stability. This week we are la ing the
commercial relationships. growx!workto ensure that we continue to take that
path. I look forward to working with all of ou.
We must be firm and committed. It is a long road
and therewill be bumps and curves. But let us Thank you very much.
neverforget our destination. Our ultimate goal is

99
Luncheon Address

Hon. Thomas McClarty, Counselor to the President of the U.S.


July 1, 1995
"The Miann· Process: The Spirit of Cooperation"
Remarks by Thomas F. Mcclarty m
Counselorto the President
July 1, 1995

J'!ll extremely pleased to be here today, to see a maintaining high external barriers, we do not lock
large and enthusiastic gathering of friends of the out other's problems; rather, we lock up our own--
hemisphere and the Summit of the Americas your--talents and initiative. We cannot go on
process. I especially want to thank Lt. Governors shackling economic dynamism which will be
Schoettler and McKay for their kind words of immediately released once the hemisphere is fully
introduction. Their presence along with Alec integrated. Our strategy is visionary yet
Watson here today emphasizes the Miami achievable, bold yet practical, dramatic yet fully
connection and tie-in to the Summit of the grounded in the experiences and prerogatives of
Americas. And thanks also to Governor Romer individual nations. And with your help, we will
and Mayor Webb for so generously offering succeed.
Colorado and Denver hospitality to us this
weekend. We strongly believe increased trade is a key
component driving the entire hemispheric agenda,
Thisweekend is a forceful statement of support for as outlined at the Summit: it provides economic
implementation of the Summit of the Americas growth, democratic consolidation, a breakdown of
agenda. The large, impressive turnout is testament corrupting social patterns, and an attack on the
to the aspirations of our hemisphere for a better, illegal narcotics trade. It is an answer to many
more prosperous future. Today we are turning problems. But our agenda is much broader than
"dichos"into "hechos;" words into deeds. simply trade.

Atthe beginning of June I accompanied Secretary As the Summit recognized, for the first time in
Christopher to the OAS General Assembly in history a new consensus of the Americas has
Haiti,where I reviewed with hemispheric foreign formed. Open markets work. Democratic
ministers our collective efforts on Summit governments are just. and together, they off er the
implementation. The session brought home how best hope for lifting people's lives.
much progress we've made. Commitment
throughoutthe hemisphere remains strong. But we Since that-what some would call magical--moment
have only just begun the journey. Our current in Miami, however, there have been difficulties in
situationcalls for proper perspective; a clarity in the hemisphere which have tested the strength and
our thinking. It calls for a steadiness of purpose durability of the progress we have made. Some
anda resolve in our actions. Together, we must have cited these as proof our vision of a new
staythe course. hemisphere cannot withstand adversity. But to
those who make this claim, I say very clearly: you
President Clinton has compiled an impressive are wrong.
recordin ta1cing
actions designed to usher in a new
ageof open markets and prosperity hemisphere- Just a decade ago, Mexico's financial crisis would
Wide. Critical actions have included his strong have been enough to send the hemisphere into a
supportfor NAFTA A, the GATT Uruguay Round, tailspin. But nations such as Argentina, Brazil,
anctthe Summit of the Americas. The President Chile, and others did not let the shock wavesfrom
~ Pursueda building block process, one step at a Mexico halt their own progress toward economic
time which has added up to a comprehensive liberalization and open markets. In fact, our
strategy to beat down protectionist and other ability to deal with hemispheric difficulties since
barriersto commercial and investment activity• By

103
the Summit has proven just how resilient economic hemispheric trade ministers met to
1
and political reforms have been. g roundwork to achieve the centerpiec lay the
. f F
Summit: creauon o a ree Trade Area of the
e of te
Nonetheless, the new hemispheric construct Americas by 2005. And the Forum today the
remains fragile. It is constantly under attack by tomorrow continues the process of and
. . . th commercial
those who seek to divide, those who seek private integration, recogruzmg e crucial role
gain. If progress is to continue, it must be private sector in development of FTAA2005the
constantly nurtured. The key message of the
Summit was not that hemispheric problems will During the past several months it has
. . . become
cease to exist; rather, it was that we now have a fashionable to question hem1sphenc commitment
mechanism to address those hemispheric problems the Summit agenda. Some have said we are not
not
which will inevitably arise. committed to take the next steps . This weekend
should dispel that myth.
At bottom, businessmen and women--you--
understand this. Investment is flowing back into We' re working closely with Congress on trade
Latin America and the Caribbean, much of it brick matters. Broad fast track hearings have begun_
and mortar which will remain even during future Chile accession talks began June 7 in Toronto.
financial dislocations. For example, Wal-Mart has Congressman Jim Kolbe, a strong and constructive
announced major investment in Brazil and proponent of Chile's accession, has said publiclyif
Argentina. I know the Wal-Mart folks--they are we can work out the terms of 'fast track ' quickly,
hard nosed businessmen investing for profit, not there could be an agreement with Chile shortly.
charity. Conoco has just signed a $1. 7 billion joint
venture to accelerate oil field development in Chile's accession to NAFTAA is clearly the key test;
Venezuela. GE, along with Japan's Mitsui, has if the process stalls our commitment to Summit
just been awarded a $200 million contract to build goals will be questioned. We understand this isnot
a gas-fired power station in Chile. Previously a time for partisan bickering or political advantage.
planned investments by GM and others are moving This is the time for leadership, commitment, and
ahead. resolve. Increasing trade is a strategic issue in the
post-Cold War world for each of our nations. By
And especially important in my view, even when broadening and deepening trade and investment
investments have been put on hold, they have not integration, we enhance economic prosperity and
been canceled. This is a marked departure from maintain global leadership. Without it, we turn
what would have been expected just a short time our back on the promise of expanding markets. If
ago. It bespeaks long-term commitment, not the we fail to seize opportunities with which we are
false comfort provided by speculative hit-and-run now presented, we face the prospect of unilateral
investment. economic disarmament at precisely the moment
when trade expansion has taken on strategic
We must continue to nurture hemispheric relations. importance in the hemisphere.
We must maintain steadiness of purpose and
resolve in our actions. Businesses are pursuing Finally, in actively pursuing Chilean accession, we
prudent investments, with realistic expectations. · here
have not forgotten the rest of the hemisphere'
And that's just about the right place to be in my
particularly the Caribbean basin. We are very
view.
interested in Caribbean Basin initiative
1
enhancement--the President and Vice President
FTAA 2005, Chile Accession · at the summit
have both spoken out in favor of this
and pre-Summit meetings. We. are_ working
As noted, this weekend represents a key
closely with Congress to refine leg1slanon
component of Summitimplementation.
Yesterday, ·1es and
would extend trade preferences in tectiles

104
ohtersectors to counter trade and investment hemisphere. For we understand it is the private
diversionwhich has arisen due to the NAFT A. sector which is the engine of hemispheric
fundamentally we seek trade and investment integration, and we need your active involvement
expansion,not trade and investment diversion. and support. Working together, pursuing our
common interests, we can move together
Let me close by saying we' 11need your continued confidently into the future . Our legacy to our
support to build a stronger. more prosperous children demands that we do .

105
Towards a Hemispheric Capital Market

William Rhodes, Vice Chairman, Citibank, USA


H.E. Marie Michelle Rey, Minister of Finance and Economy, Haiti
H.E. Domingo Cavallo, Minister of the Economy, Argentina
Enrique Iglesias, President, Inter-American Development Bank
July 1, 1995
"Towardsa HemisphericCapitalMarket"
Remarks by WilliamRhodes
Vice Chairmanof Citibank
July 1, 1995

Thank you, Secretary Brown, Ladies and debt in 1982 represented 80% of investment flows
Gentlemen. to emerging markets . Today, it is probably less
than 20%. In 1993, emerging market funds had
It is a great pleasure to moderate this session on over $50 billion in assets, compared to less than $1
capital flows with such a distinguished and billion in 1986.
knowledgeable panel.
Increased trade integration is spawning greater
My own institution, Citibank , has an abiding cross border investing . NAFf A, Mercosur, the
interest in markets throughout the Western Andean Pact, Central American Common Market,
Hemisphere. We opened our first Latin American the Association of Caribbean States, all encourage
office in Argentina in 1914 and have pursued freer capital flows throughout the Western
business interests in the region uninterrupted ever Hemisphere.
since.
Clearly, Latin America has made great strides.
Over the past 80 years, we've watched Latin But just as clearly, the region must compete
America rise to become the investor's darling on aggressively for capital in the coming years with
several occasions, and then be abandoned when the other emerging markets, and with opportunities in
going got rough. mature markets also.

Unfortunately, even bankers are not immune to the The recent Peso . crisis in Mexico not only
boom and bust approach. Bank lending to LA underlined the vulnerability of short term capital
reached a crescendo pitch in the late 1970's and flows from outside sources to such external
early 1980's. When loans intersected with double- phenomena, such as the increase in international
digit U.S. interest rates, the cross-border debt interest rates and also to local political events, but
crisis ensued. Many banks and other foreign also emphasized once again the need to develop a
financial institutions pulled up stakes and left the strong internal savings base and local capital
region. markets .

Today, cross-border investment interest in Latin This panel will explore prospects for cross-border
America once again is high, but several factors investment flows in our hemisphere, and examine
make prospects much different this time. hurdles to be overcome for capital markets
integration to evolve.
Many, if not most Latin American countries have
undergone significant economic reform with trade I would ask our panelists to comment on three
liberalization, privatizations, deregulation, tax things during their presentations .
reform, local capital market formation and
expansionand the creation of independent Central 1. How Latin American countries can raise the
Banks. Governments in these same countries are necessary financing to satisfy the region's
demonstrating strong political will, and good substantial infrastructure needs in the coming
management in pursuing sound economic policy. decade.

Investment flows are now mainly in the direct 2. The need for increased disclosure and
investment, equity bond area. Commercial bank transparency in local capital markets.

109
3. The necessary steps needed to increase local Haitian Minister of Finance and Economy Michelle
savings . Rey has a long and illustrious career in private as
well as public service. In her current position, her
Our panelists are well qualified to examine these skills and abilities have been put to the test and she
issues and provide their own outlook for the future has come through with flying colors.
of capital markets integration in this hemisphere.
They are: Madam Rey is one of the chief architects of
President Aristide ' s Economic Recovery Effort
Domingo Cavallo, Minister of Economy and has worked tirelessly with the multilateral
for Argentina; organizations to advance Haiti 's economic
recovery.
Marie Michelle Rey, Minister of Finance
of Haiti; Enrique Iglesias began his career as a banker,
serving as Managing Director of Union de Bancos
Enrique Iglesias, President of the Inter- del Uruguay. He has also served as Minister of
Development Bank; External Relations for Uruguay and Executive
Secretary of the United Nations' Economic
Domingo Cavallo, working with President Menem, Commission for Latin America and the Caribbean.
has been the architect of Argentina's impressive As President of the Inter-American Development
economic modernization effort. Argentina's Bank, Enrique has increased its resources, steered
economy today is one of the most open in Latin a new course towards social improvement for
America and for that matter in the World. He borrowing countries, while helping them enter into
served as president of the Central Bank of an era of reform , liberalization and integration.
Argentina and has held numerous other He has also carried out a program of
government posts. modernization for the institution itself .

110
"Towarda HemisphericCapitalMarket"
Remarks by H.E. Marie MichelleRey
Minister of Finance and Economy, Haiti
July 1, 1995

1. BACKGROUNDTO THE I .AlINCHING As of today, we have made substantial progress,


OF THE EMERGENCY ECONOMIC particularly in the areas of macro economic
RECOVERYPROGRAM stability, institutional strengthening and we are
constantly looking for creative means of improving
On behalf of the government of Haiti I commend our absorptive capacity . In April, an IMF
the US Department of Commerce and the City of quarterly evaluation of the economic program
Denver for hosting this important conference and certified that the government had exceeded its
this panel on private sector financing of performance criteria. Approximately US$400
infrastructure and privatization. Our workshop million have been disbursed so far for balance of
addresses a critical challenge for countries in the payment support, public investment projects and
hemisphere, i.e. mobilizing private sector institution building.
investment for infrastructure development. Haiti
enthusiastically welcomes the opportunity to play This program, which intends to create an
a leadership role in this dialogue. environment conducive to sustainable economic
growth and political stability, explicitly recognizes
Haiti is at a historic crossroad . Since the return of the key role that market forces will play in the
President Aristide to his country the 15th of allocation of resources. Consequently our
October 1994 and the restoration of democracy, government seeks the participation of a strong and
the government is faced with the formidable dynamic private sector both local and foreign in
challenge of rebuilding a nation . As President order to stimulate this economic growth in an open
Aristide often says, our primary goal is to raise our and competitive environment. To that effect, the
people from the depth of misery to the realm of President created a commission composed of
poverty with dignity. We intend to accomplish private and public sector leaders in order to discuss
this, by setting irreversibly our country on the path initiatives that can promote investment, remove
of sound democracy, sustainable development and bottlenecks to economic activities and streamline
open market economy . our legal and regulatory environment.
Furthermore, in March 1995, President Clinton
2. ELEMENTS
OF THE EMERGENCY launched a "Business Development Council" which
ECONOMICRECOVERYPROGRAM unites Haitian and American private sector leaders
as well as high level government representatives of
In January 1995, after clearing its external debt both countries. That month , the BDC held its first
arrears of $82 million and signing a letter of intent meeting in Port-Au -Prince which was inaugurated
with the IMF, the government of Haiti presented by President Aristide at the National Palace. The
its emergency economic recovery program to the follow-up meeting was held in Washington at the
internationaldonors. The program developed with end of May and was hosted by the US Department
the IMF, the World Bank, the IDB, major bilateral of Commerce. Furthermore, in the same month of
donors and key private sector representatives, was May, the government carried out a presidential
strongly supported by the International Community initiative to organize a two-day economic
that committed a record $1.2 billion to this symposium for Haitian investors living in Haiti and
program. The donors continue to work closely abroad, during which private and public sector
with us to ensure effective and expeditious representatives discussed ways of facilitating
implementation. private sector participation in the nation re-building
process.

111
3. STATl JS OF THE PI More generally, we know that in order to succeed
ENTERPRISE DEMOCRATIZATION in our goal of economic reconstruction, we must
PROCESS continue to make consistent and concerted progress
in addressing our nations pressing social welfare
1n January 1995 the government retained the needs. That is why we are committed to
services of the International Financial Corporation democratization of public enterprises and are
(IFC) in order to analyze and recommend planning to allocate meaningful revenues from this
strategies for the democratization of nine public- program to address the basic needs of the poorest
owned enterprises such as: segments of the population.

• the electric company 4. FTNANCTNGOPPORTTJNITIES FOR


• the telephone company PRIVATE SECTOR
• the national ports and airports
• the cement plant A Central Implementation Unit was established
• the flour mill within the Prime Minister 's office. Funded with
• two commercial banks; and, US$80 million with the World Bank and the
• an edible oil plant. In April 1995, it International Development Bank, it provides the
created the State Enterprise and capability to implement critical infrastructure
Democratization Unit (SEDU), to rehabilitationprojects that are labor intensive. The
implement and manage the privatization CIU is now contracting with domestic and foreign
process; and last May, the IFC submitted private sector companies to execute projects.
its preliminary appraisal and
recommeooations, on the nine state-owned The government has established with the Overseas
enterprises for which it was contracted. Private Investment Corporation a special $65
million working capital and loan facility to
These reports are being analyzed by the stimulate foreign investment and infrastructure.
government. However , we are moving ahead in
four of the nine categories. For the cement plant, The government is currentl y finalizing its
the flour mill and the ports, pre-qualification negotiations with the U .S. on a Tax Information
documents are ready for mailing. The actual bid Exchange Agreement. This agr eement will enable
process will be initiated as soon as the financial Haitian business ventures to access private
audits of these companies are completed. The financing through tax incentive provisions of the
power company was the first of the state-owned U.S. Tax Code .
enterprises to be restructured prior to privatization.
In this context, the day-to-day operational needs as 5. CONCT.lJSION
well as the long term strategic issues are being
addressed . A letter of intent was signed with We have taken significant steps towards meeting
Smith Cogeneration of Oklahoma and it provides our country's newest and greatest challenge, but
for immediate construction of a 35 MW power we still have a long way to go. With the continued
barge. The passage of the privatization legislation support of the international community and the
will lead to the formation of a consortium between growing participation of the private sector, we can
Smith Cogeneration, Electricite de France, Hydro- and we will succeed . We welcome your
Quebec and the Republic of Haiti to address the investments and encourage you to participate in
future energy needs of Port-Au-Prince. As for the making our next historic milestone a reality. we
other companies scheduled for privatization, the can now confidently say : Haiti is back in business
transaction analyses are on-going. and is ready to go.

112
"Towarda HemisphericCapital Market"
Summary of Remarks by H.E. Domingo Cavallo
Minister of Economy, Republic of Argentina
July 2, 1995

Minister Cavallo stressed the importance of Minister Cavallo also expressed his support to the
integrating hemispheric financial markets . No newly created Committee on Hemispheric
economic integration is feasible if the financial Financial Issues, that was launched in Washington ,
markets are not integrated. Therefore a key D .C. during a meeting chaired by U.S. Under
element to successfully reaching the targets Secretary of the Treasury , L. Summers in late
established at the Miami Summit meetings in April .
December 1994 is to pursue the development and
liberalization of the hemispheric capital markets . This Committee provides a unique opportunity to
deepen cooperation on financial matters in view of
Integrated capital markets will facilitate trade and the recen t economic developments and the
investment flows within the region and contribute globalization of the world economy.
to improve the availability of adequate financial
flows for all countries along the continent . Comprehensive knowledge of capital market
Financial terms and conditions will improve with regulations throughout the continent is a crucial
the liberalization of financial markets. element for the integration of financial markets.
Furthermore, the development of domestic capital Coordina tion among banking and securities
markets will be enhanced by the hemispheric regulators becomes also a relevant aspect of
integration of financial markets. integratedmarkets. The newly created Committee
could contribute substantially to improve
knowledge and cooperation in preparation for the
hemispheric integration.

113
"Towarda Hemispheric Capital Market•
Remarks by Enrique Iglesias
President, Inter-AmericanDevelopmentBank
July 1, 1995

1. Introduction in our countries reverts to the private sector and


the market. This is a weighty responsibility, of
I would like to consider with you the subject of vast implications and historic importance, which
capital markets in Latin America and their we trust the Latin American private sector will
connections with the international capital markets, know how to address effectively.
in the more general setting of the structural
economic reforms in which the great majority of The second pillar, closely akin to the first, is the
the countries in the region have been engaged over consolidation and strengthening of an efficient
the last ten years. government by extensive reforms to redefine its
basic functions in society and the economy,
In the broad view of the reforms undertaken in downsize the sphere of its responsibilities and its
Latin America, it seems to me that the first thing to institutional dimensions, and introduce modern
mention should be their systemic and truly standards of organization and operation that will
revolutionary quality, in which they respond to a make it an efficient system. It will not necessarily
real convergence of economic and political factors be a smaller government, but one with functions
in the region itself and to the international different from those of regulator of the economy
conditions in which our national economies and entrepreneur in the production sphere, which
operate. We would be hard put to identify another new functions are ow being performed in a setting
time in the region's economic history in which a of transparency, accountability, and effectiveness.
body of reforms so vast has been launched in such One of them is to make an essential contribution to
a short time by so many of those countries. It has the promotion of equity and social development,
been what amounts to a virtual revolution by competition, and the political consensus needed to
consensus. strengthen the exercise of democracy and
participation by the deprived sectors, which
2. The reforms in progress constitute the bulk of society.

What are the basic elements of these reforms? In A third pillar of the reforms carried out in Latin
my view, they rest on four pillars, which differ America is financial and price stability, a critical
from country to country in their specific nature and requirement for the creation of a setting favorable
relative importance, but may be defined essentially to economic and social progress and to
as follows. consolidation of the democratic system. The
attainment of macroeconomic equilibria,
The first pillar is a reevaluation of the role of the particularly in the fiscal , monetary, and foreign
market and a new proof of confidence in the trade spheres, poses one of the old habits of
capacity for initiative and efficient economic tolerance for acute inflation, high and persistent
management on the part of the private sector, fiscal deficits, and yawning external trade and
which in the region, as elsewhere in the world, financial gaps .
was overridden by government action in response
to the conditions created by the Great Depression The greatest difficulty in the way of attaining the
and the two world wars. Now it is government targets of macroeconomic stability proposed in the
which takes, in principle, a subsidiary role, and the region is that the sources of instability involve the
primary responsibility for resource allocation and action of domestic and foreign factors combined.
the attainment of economic and social progressivity While the former part of the world economy,

114
which the Latin American countries have very little reduce unemployment and restore real wages, and
or no capacity to control or rectify . Indeed, with the solution of the severe problem of the social
the globalization of markets and close debt.
interdependence among national economies , these
factors have been exerting a growing influence on The need to increase domestic savings should be
the economic performance of our countries, as the recognized as a task of highest priority in the
recent financial crises in the region so tellingly region's reform effort . Observation suggests that
illustrate. Hence the challenge is not just internal, the sharp drop of mean savings in Latin America
but also demands a major effort to solve the to their lowest level in the last thirty years has been
problems of vulnerability to external commercial caused by a deplorable lack of concern about this
and financial situations that have affected the on the part of the economic authorities in recent
region's development so unfavorably. years and by adverse effects of market
performance. The ratio of domestic savings to
The fourth pillar sustaining the reforms undertaken regional gross product fell below 21 percent in
by the Latin American countries is their increasing 1994 , compared with the an average of about 26
openness to trade with and finance from the outside percent in the seventies. It is disquieting that the
world and their engagement in the world economy . sharpest drop has come in the last five years, when
The vulnerability and instability of those countries savings sank from 23 .6 percent of the regional
in the face of external commercial and financial product in 1989 to 20.7 percent in 1994, precisely
developments have been accompanies by a secular when intensified reforms, especially those for the
trend of decline in the share of the region's exports transformation and modernization of the structures
in world trade, from about 12 percent in the early of production and exports, required a mobilization
fifties to about 3 .7 percent in 1994. This trend is of more resources for investment.
an outcome of the inward looking development
model adopted, for lack of viable alternatives , by The greater need for resources could be met thanks
those countries when they emerged from the Great to an inflow of foreign capital that grew at an
Depression, and of the far-reaching transformation extraordinary rate, while the current propensity to
of world trade brought about by the technological consume in the region climbed to the highest levels
revolution and the shift in the world geopolitical since 1960. Unfortunately, however , a significant
structure. Latin America's external debt crisis in proportion of this new capital income was in short-
the early eighties triggered the collapse of the term portfolio investments, highly sensitive to
traditional development model and became a changes in international interest spreads and to
powerful driving force of the new development opportunities for short-term profit, and to
policies, and especially of the reforms in trade and contingent political and financial events. The
in the treatment of foreign investment. financial and exchange crisis of Mexico at the end
of last year and its adverse effects on many other
4. Unfinished business countries brought into the open the difficulties that
could be created by a wide external financial gap
Along with the first fruits of the reforms financed largely by short-term resources. The
undertaken, there is more tangible evidence of great lesson of these experiences is the need to
several unfinished tasks that the region must promote a strong expansion of domestic savings as
urgently address with resolute political will. They a requirement for meeting the region's rising
include tasks relating to the formation of domestic investment needs and at the same time for
savings, the expansion and diversification of mitigating the excessive financial vulnerability of
exports, including those of products with higher some countries in the region.
value-added content, the establishment and
consolidation of modern institutions, the generation Another area in which Latin America
of sources of productive employment that will accomplishments have not measured up

115
satisfactorily to expectations is the expansion and resizing of institutions a highly complex task as
diversification of exports and markets. While the well as a trial-and-error process of learning by
volume of exported goods and service did rise over doing, which affects both public and private
the last five years almost twice as fast per year as institutions.
the gross product, 6.2 percent as against 3.4
percent, respectively, the inadequacy of that It is obvious that a lack of good institutions can
growth can be seen by comparison with the hinder the implementation of reforms or impair
increase in imports of goods and services, which their results. For example, liberalizing financial
rose an average of 13.5 percent a year during that markets can entail grave risks in the absence of
period. Meanwhile, maintenance of economic appropriate institutional conditions in which the
stability in the region requires a major advance in required supervisory and regulatory functions can
modernization of the exporting structure and its be effectivelyperformed. Similarly, privatizations
international competitiveness in order to increase will not generate the greater efficiency they seek
the proportion of manufactures and other products unless there are institutions capable of regulating
of greater added value. An important lesson of monopolies and ensuring fair competition.
recent experience is that the transition from a
protected economy - based on import substitution - Solving the problem of rising unemployment in
to an economy open to international competition many Latin American countries is an area of
involves some asymmetry in the dynamics of unfinished work that is giving rise to increasing
exports relative to imports, which results in a concern, and is recognized as a real Achilles' heel
growing trade deficit. The growth of exporting of regional development. Though the
capability and international competitiveness macroeconomic situation has improved in many
appears to take more time than was at first countries, with product growth rates in some cases
supposed. This kind of macroeconomic beyond 6 percent a year, unemployment has risen
disequilibrium, carried further than called for by significantly, doubling and tripling over the last
the requirements of resources for economic five years. Even in the best situations, in which
growth, has proved in many cases a source of employment has risen, a climate of dissatisfaction
instability, and ultimately a brake on development. has emerged owing to a loss of quality of the jobs
on offer, their impermanence, and the decline of
Another important unfinished task remains in the real wages. This is not just happening in Latin
public and private institutionalsphere. A transition America, but is rather a condition that threatens to
from one economic policy model to another, become internationally endemic and strikes
especially with the features and implications of the severely at the industrialized countries and at the
Latin American experience, entails change in and prospects for a fuller and wider free trade.
the adaptation of institutions that are decisively
instrumental in the implementation of policy Settling the social debt is an unfinished task on a
measures. Some of these institutions have had large scale, and without any doubt the most
functions so narrowly specific that a shift in the momentous challenge facing the region at the end
direction of policy has rendered them obsolete or of the century. The aggravation of social
redundant. In other cases there is the option to deprivation, the increase of critical poverty and. in
reorganize the institutions and adapt them for the general, the worsening of income distribution over
performance of new tasks. In addition to the the last decade in the wake of the external debt
transfer of enterprise and other activities to the crisis and the recessive consequences of the
private sector, another dimension of institutional adjustment policies have reversed the trends
transformation is the decentralization and toward improvement of the sixties and seventies
regionalization of decision making and the and accentuated the region's traditional social
administration of public and government functions. shortcomings. There are many reasons for the
All this makes the reorganization, change, and urgency and importance of undertaking resolute

116
efforts to improve distributional equity andsocial advisabiliyof developingfinancial systems further
conditions in the region. and making!hem more efficiett and stable in order
to mobilize domestic and foreign savings for
It is not only a matter of social ethics , in itself of investmem. ~ reform of financialsystems has in
fundamental importance, but of major economic fact been undertaken in many Latin American
and political considerations. To increase countries, andimportantadvances have been made
mvestment, make changes in production and in the liberalization of financial markets and
improve the overall productivity of the national institutional modernization.
economies, there must be human resources of the
right kinds and in the necessary quantities , who, However, unsatisfactory formation of domestic
moreover, must be highly motivated. Their savings, especially in the private sector, has offset
presence will also help improve democratic the improvements scored in the fiscal sphere and
participation and consolidate political stability , the public sector as a whole. While government
which are in turn necessary for a climate favorable deficits have been appreciably reduced and some
to investment. The symptoms of econorruc countries have acquired surpluses, to the
recovery of the last four years make it possible to consequent increase of savings, the overall
addressproperly the demand for resources for the domestic savings of many national economies in
war on extreme poverty and the launching of long- !he region have declined. The basic question at the
haul social development policies. present juncture is, then, to find the most effective
ways to encourage and induce higher formation of
Economic efficiency is a necessary but not a private savings.
sufficient condition for sustained development in
the long nm, including improvement of the general The option of replacing domestic savings with a
living conditions of the broad mass of Latin growing and massive participation of external
Americans.In the present conditions in the region finance has repeatedly proved a failure, especially
this will require specific government policies. when the composition and the terms and interest of
Experiencehas revealed the existence of structural the external capital induce consumption and,
factors and market flaws, and that in adjustment besides, undermine the stability of the local
processes contradictions can arise which widen currency and the real exchange rate, as well as
inequalities and aggravate poverty, making it balance-of-payments equilibrium. The experience
necessaryfor governments to undertake deliberate of the end of the seventies and beginning of the
efforts to improve distributional equity . eighties, and that of recent months, agree in one
Experience also shows that, when there is the way or another in illustrating lhe adverse effects on
necessary political wiIJ, the imperatives of development of substituting external financing for
economic efficiency and budget restrictions can be domestic savings . The lesson learned is that the
reconciled with greater social equity and the war formation of domestic savings must be effectively
on poverty as Chile has demonstrated over the last encouraged.
five years.
How are domestic savings to be increased? There
5. Financial reform and capital markets is no single or general answer to this question.
Some conventional theoretical formulations have
From these five unfinished tasks, I revert to the proved irrelevant to economic conditions in Latin
subjectof the fonnation of domescic savings and its America, or their effects have been the opposite of
more efficient channeling into investment. It is !hose expeCled, for example, the assumption about
widely acknowledged that capital formation is vital the role assigned to an increase in nominal and real
to the transformation, modernization, and interes1rates. On the other hand, there appears to
economic growth of countries. Similarly. there be grealer consensus about lhe effectiveness of
has been much emphasis in recent years on the some practical policy measures .

117
In regard to government and public-sector savings, help speed up the pace of economic growth and
policies for the containment of costs and the increase the rate of return on capital .
increase of fiscal revenues have produced the
expected financial results, though not always in What domestic savings requirements or needs are
ways compatible with growth, economic demanded by sustainable rate of growth, which
efficiency, and the increase of employment. would be compatible with these countries'
development potential and with a significant
In the area of private and semipublic savings, the improvement in employment and living standards?
establishment of institutionalized mechanisms for We believe that the region has the foundations in
savings, whether voluntary or forced, has in the place upon which to attain a stable rate of growth
past proved highly effective. This has been true on the order of six percent annually in the coming
of, for example, savings and loan systems, which years, as was experienced in the late 1960s and
in varying forms have existed in Latin America for 1970s.
several decades. Another, more recent form of
institutional saving is pension funds, which in the Nevertheless, a critical condition is to raise
last fifteen years have been most successful in domestic savings to a level equivalent to 26 percem
Chile, where their contribution to domestic savings of GDP, similar to the average level prevailing
has risen from 2.9 percent of GDP in 1989 to 3.6 from 1973 to 1977. This would assure proper
percent in 1993 . More generally, it is postulated availability of resources to rebuild and expand
that the attainment of stable macroeconomic capital stocks gradually, and to correct the
conditions and the cultivation of a climate of excesses of external financial vulnerability seen in
confidence in the permanence of democratic recent years. The rate of GDP growth could be
institutions and the rule of law are requirements speeded up gradually from its current level, on the
for, as much as powerful incentives to, the order of four percent a year until reaching the
formation of private savings. And this is the very desired rate of six percent a year at the turn of the
point of the structural reforms on which the Latin century. Within this time frame, we would
American countries are embarked. propose to increase the domestic savings rate at a
steady pace of one percentage point of GDP per
Toe financial reforms being implemented in many year, so that today's savings rate of 21 percen t of
Latin American countries are seeking to achieve GDP would rise to 26 percent by 2000 .
greater integration, efficiency, and stability of
financial systems by liberalizing markets, adapting This greater savings effort must come from all
financial institutions arx1instruments, strengthening levels of the economy and of society in the region,
the autonomy of central banks, and ensuring that but chiefly from the middle - and high- income
economic authorities' supervisory and regulatory sectors, so that the commitments made to progress
functions are carried out more effectively. As a can be reconciled with the economic capacity of
result of these reforms, it is hoped that rates of each sector, within the overall framework of
return on financial investments can be normalized progressive social equity. The great challenge
and that their variability and uncertainty can be facing the capital markets and financial systems in
reduced, so the time and space horizons for general is to foster and facilitate the strengthening
savings can be broadened, whilst permitting better of domestic savings in this way and to assure that
allocation or channeling of savings to investment. the allocation of domestic savings among those
At the same time , increasing savings and allocating opportunities open for expanding investment can be
it better amongst real investment operations should made according to the highest standards of
efficiency.

118
The Evolution of Integration: Bringing Regional Agreements Together

H.E. Alvaro Garcia, Minister of Economy, Chile


H.E. Cesar Gaviria, Secretary General, Organization of American States
H.E. Dorothy Wemeck, Minister of Industry,
Commerce and Tourism, Brazil
Carlos Sanchez, Secretary for Trade and Investment, Argentina
July 2, 1995
"'TOWARDA FREE TRADE AGREEMENTOF THE AMERICAS"
Remarks by H.E. Alvaro Garcia
Minister of Economy, Chile
July 2, 1995

There is a growing consensus about the advantages to be concerned about free access to markets,
of reaching a Free Trade Agreement of the while more developed countries are more
Americas that would stimulate the economic concerned about such new topics as intellectual
development of the member countries. Conditions property rights, government purchases,
are particularly favorable, given the economic environmental protection, etc. Thus, any future
recovery underway in the Americas and the trade agreement will have to resolve these
liberalization of world trade resulting from the differences. Furthermore, it should include a joint
recentlyconcluded Uruguay Round of GAIT. The commitment to economic cooperation and
world economy is still weak and suffers from a development to help enable the lesser developed
clear lack of coordination. Thus, in my opinion, countries to close the regional poverty gap.
the decision to eliminate trade barriers and
promote investment in the hemisphere appear to be The third is to promote what might be called
the best way to benefit from world trade and to coordinated unilateralism or convergent sub-
stimulate the growth of intra-regional trade. regional integration. Thus, each country or group
of countries could make its own proposals for
The consensus is based on the following criteria. creating regional free trade. Therefore, the
The first is to join existing trade organizations at existing work groups, and those to be established
all levels. However, this effort only makes sense if in March , 1996 with the cooperation of the OAS ,
regional and sub-regional agreements go beyond IDB, and ECLAC should establish new , attainable
the World Trade Organization (WTO) in goals beyond those already achieved by the WTO .
liberalizing trade. In 1997, when the goals have been agreed upon,
each country or group of countries should make
The second is to set up technical work groups that proposals how best to achieve the goals and the
during 1996 will study current conditions and economic cooperation required , in the case of
establish attainable goals, based on the Miami lesser developed countries. By the end of 1997, a
Summmit accords, that will undoubtedly permit us to negotiation schedule and deadline should be
advance toward the economic integration of the established. Thus, for example, if one third of the
Americas. time bas passed, agreements covering one third of
the goals should have been achieved . This will
Now I would like to make four proposals to lead us keep negotiations on schedule so that a final free
as fast as possible in this direction: trade agreement may be achieved by the deadline
date. Furthermore, a system should be set up to
The first is to accept the WTO accords as the basis monitor the progress of the negotiations, to
for regional integration and to concentrate further sanction any irregularities, and to report
discussion on those topics not resolved by the periodically to the Council of Ministers.
WTO that would contribute to the further
liberalization of trade . These include such The fourth is to encourage citizen participation in
problems as subsidies and different criteria for the economic integration process. This means an
determining national content or origin. education program to inform citizens about free
trade and its advantages and series of national
The second is to recognize the differing economic meetings to enable the public to express their
Conditionsand attitudes toward free trade that exist opinions and concerns . Such topics as social
inthe region. The lesser developed countries tend equality and sustainable growth should be discussed

121
in order to reach a consensus. The same is true for these commercial opportunities, and develop
economic aid, which lesser developed countries communication and education programs on the
will require so that they can reap the economic advantages of free trade . Lastly, the integration
benefits of integration and free trade and not fall process would be strengthened by the increased
further behind . interaction between businessmen and workers in
supporting government negotiations. With input
To gain supporters for this proposal the Council of from different sectors, governments can achieve
Ministers of the Trade Agreement could identify the necessary social consensus to negotiate
and disseminate the economic opportunities successfully.
resulting from integration (i.e., new businesses),
establish communication channels between
businessmen so that they may take advantage of

122
"The Evolution of Integration: Bringing
Regional Agreements Together"
Remarks by H.E. Cesar Gaviria
Secretary General, Organization of American States
July 2, 1995

This is a historic occasion for the Hemisphere. Second, after unilaterally liberalizing their
The Ministers of Trade of the Americas chartered economies, several countries witnessed the rapid
in Denver a path that should guide us in our efforts expansion of bilateral trade with their neighbors .
to build a continent united by trade, investment and Open markets uncovered latent complementarities
growth. and synergies between the economies of several
sub-regions of Latin America. The combination of
With this Summit the political commitment to have these two processes -- limitations of old
a Free Trade Area of the Americas by the Year integrationistmodels on the one hand and increased
2005 has been translated into concrete actions. profitability of liberalized integration on the other
Now we have a detailed methodology that -- convinced the countries of the desirability of a
guarantees that our common goal can be achieved. "new type" of integration.
The initial work program, approved by the
Ministers, is certainly an orderly and technically Governments reacted positively trying through
sound approach to address the key areas of the free-trade agreements to organize and encourage
negotiations. And I am sure that by next spring we this revitalization of neighboring markets. And the
will be able to fulfill the mandates assigned by the result was an explosion of new or revamped
Ministers to the working groups and to the integration and fre.e-trade arrangements such as
tripartite committee of OAS, IDB and ECLAC. MERCOSUR, the Andean Pact, G-3, many
bilateral understandings, and even NAFf A .
With the purpose of inviting the debate, let me now
present some views on the evolution of integration What today seems almost obvious was far from
in the Americas and on how we could work to clear at the time. It was a difficult decision to
bring all the agreements together. abandon old integrationist models and embark on
the coordinated liberalization of bilateral and
Many countries in the Hemisphere, in their search regional markets. Political will, conviction,
for a new development model that would allow confidence-building, and a great deal of technical
them to correct the distortions caused by work were needed. And in the process a "new
protectionism, individually launched processes of type" of integration emerged. This type of open
trade liberalization. integration leads partners towards free trade
without increasing protection vis-a-vis third
As this policy spread through the region, two parties.
phenomena emerged. In the first place, unilateral
liberalization began to clash with the straightjacket In the Americas we have a web of over 26
of past trade agreements and commitments. "Old- finalized agreements and several new ones are
style" integration, designed within the confines of currently being discussed. At the same time
the import-substitution model, created an almost every Latin American country is bound by
inescapable tangle of legal obligations and the global commitments achieved at the Uruguay
significant limitations to the opening of the Round. Having consolidated regional integration,
economy. Thus, countries were confronted with we can now realistically think of creating a
the dilemma to have to choose between remaining Hemispheric-wide free trade area .
faithful to old promises or pushing forward with
their liberalization strategies.

(
123
But today we still face conflicting forces. The This work reveals that areas of convergence and
most obvious difficulty is to move towards greater divergence were created by the spectrum of
trade liberalization through a complex web of agreements. The central finding of this effort is
agreements that have different parameters, that when taken as a whole, these agreements
regulations, disciplines and standards. Achieving reflect an overriding compatibility, despite their
free-trade in the Hemisphere through the exercise differences in parameters, formulas and
of ever-expanding the number of bilateral, regulations.
regional, or partial agreements seems as an
inefficient and probably fruitless method. To further harmonize these multilateral
commitments, the time may have come to consider
In the midst of this dilemma, a light appeared to registering the regional agreements with the WTO
guide us politically through this difficult task. I am -- those that are not yet registered -- while taking
referring to the Miami Summit, where the leaders into account the understandings reached under the
of the democracies of the Americas made the Uruguay Round.
decision to create a Free Trade Area of the
Americas, for which negotiations are to be This decision could create an atmosphere of
concluded in 2005. increased transparency and have the healthy effect
of promoting a more rapid concordance between
That is why we are here -- to make an inevitable subregional and multilateral policies, thereby
political mandate a reality. The Presidents and making it easier for the Hemisphere to progress
Heads of Government wisely understood that their with a common general reference point in the
role was to impress upon the process the necessary multilateral regulations.
political will, to set up the plans of action, and to
assign responsibilities. They have already done so. The process of creating the Free Trade Area of the
Americas would be comprised of two important
The Advisory Group of the Special Committee on phases . The first would involve fostering mutual
Trade, under the guidance of the Vice Minister for trust, sharin,.g information, establishing the
Industry of Peru , and the Trade Unit recently technical needs of the process, and defining the
created in the General Secretariat of the parameters that would guide the joint effort. The
Organization of American States are already second would be the negotiation phase, in which
collaborating closely. Moreover, the close inter- the actual agreements would be drafted.
institutional cooperation that has been formalized
between the IDB, ECLAC, and the OAS on the We would like to facilitate this process by
topic of trade ensures the technical soundness and reiterating some of the ideas contained in the
the full use of each institution's capabilities. Report of the OAS Committee on the foundations
for the construction of the Free Trade Area of the
A first contribution from this collective effort is the Americas.
Analytical Compendium of Trade Agreements in
the Hemisphere, prepared under the Unit's In the first place, the Free Trade Area of the
coordination, on the initiative of the Committee, Americas could be built on two basic pillars: the
and that has been presented to the Ministers of multilateral regulations of the GATT /WTO system
Trade, following the historic mandate of the and the commitments contained in many of the
Summit of the Americas. This is the first time the regional or bilateral agreements already in force.
free trade and integration agreements in force in By using the GATT regu lations as the first
the Americas have been organized, described, and harmonization tool, it will be possible to avoid
systematically compared using a common building a parallel system of commitments that
methodology. could be redundant in many areas. Energies could
thus be focused on the negotiation of more

124
contentious topics in the areas that transcend the It is essential to recognize that the problem
current scope of GA TT regulations and those that involves support for the transformation of these
are not covered by the WTO umbrella but that are countries so that they can truly benefit on a long-
unavoidable in the context of the Hemisphere. term basis from the liberalization process. It will
be necessary, for example, to channel significant
We must take advantage of the experience of investments to develop latent comparative
agreementssuch as MERCOSUR and NAFTAA, advantages that exist in many of these countries,
which will serve as significant components of the but that could not be exploited on the basis of a
eventual Hemispheric-wide free trade system. simple guarantee of market access.
These agreements have already developed and
consolidated regulations in critical areas of Ministers, entrepreneurs and delegates:
negotiationand could eventually serve as reference
for harmonization and convergence. It would be But beyond all this technical discussion, we have to
inefficientto try to make progress by forcing those understand that in our world today, trade
who are ahead to backtrack. negotiationsare no longer the realm of specialists.
Today, trade issues are at the heart of domestic
II
Perhaps the same Spirit of Miami that drives
II
politics and foreign policy in every country without
many areas of the Hemisphere's political agenda exception. This means that we have to
could also inspire us to expand the liberalization acknowledge the political nature of the process
process. When we think about new agreements towards a Hemispheric wide free trade area.
and further steps, we should always bear in mind
that our final destination is integration of the Therefore, we have to manage with infinite
Americas. sensibility and care the expectations, the rhythms
and the priorities of all the parties involved. The
I would also like to refer to the issue of the specific certainty that we have a joint commitment and a set
needs of smaller economies. This group of of common goals will help us significantly to
countries requires an approach to integration that patiently construct a vigorous consensus in all this
explicitlytakes into account the risks they will face delicate matters. What happened here in Denver
in the context of Hemispheric-wide reciprocal has proved that we can agree on critical issues and
trade liberalization. move forward. We have to continue with the same
attitude -- not rushing, but without pause.

Thank You.

125
"The Evolution of Integration:
Bringing Regional Agreements Together"
Remarks by H.E. Dorothea Wemeck
July 2, 1995

MERCOSUL is becoming an important economic goal of negotiating a Hemispheric Free Trade


and trade area. MERCOSUL, with an annual Area. The strengthening of MERCOSUL, the
GDP of over $750 billion, constitutes over 80% of Andean Group, the Central American Common
the total GDP of Latin America andthe Caribbean , Market (CACM) and the Caribbean Common
excluding Mexico. The MERCOSUL Member Market (CARlCOM) will assist in the simultaneous
Countries have displayed economic dynamism and negotiations with our industrialized trading
exhibited growth rates above the regional average. partners. The goals we have in mind are as
The liberalization process in trade, business and follows:
finance, as well as the measures taken to privatize
and streamline the size of the public sector, are To continually strengthen and deepen
factors that have attracted a growing interest from MERCOSUL and other subregional
business executives in the industrialized countries. arrangements, overcoming any difficulties
inherent in the integration process; and
We must deepen MERCOSUL not only in its
trade, economic, and financial aspects, but also in To enhance the current customs union which,
its political, cultural, and social aspects. Only such as everyone knows, must move beyond its
growth and development will ensure a mature current stage of "exceptions and adjustments, "
negotiation toward the planned Hemispheric Free seeking to achieve a more transparent common
Trade Area, evolving through the South American market as quickly as possible.
Free Trade Area (ALCSA). Which is the path to
follow? How should we design the relationships As the relationships among and between the
among and between groups and countries? These MERCOSUL Member countries deepen , so do
are questions we need to address at our upcoming their trade partnerships, both with the countries of
meetings of Regional Trade Ministers . the Americas and with the rest of the world . As
we say in Brazil : We have given priority to a
There is no doubt that "regionalism" is here to liberalization policy that is unprecedented in the
stay, despite the difficulties and crises that arise-- history of Southern Cone . We are well aware of
and will continue to arise--from time to time, in Brazil's significant responsibility during this
one country or another. This regionalism is not process.
protectionist, nor inward-looking, but rather is a
regionalism that, without any doubt, has supported It should be emphasized that both intra-
the multilateralism we all advocate so strongly. MERCOSUL and extra-MERCOSUL trade
There is no opposition to open regionalism. This volumes have reached significant levels,
topic has already been discussed at length, but demonstrating an outstanding potential for growth
nevertheless it is important to emphasize that we and diversification . For instance, the intra-
advocate a deepening of sub-regional integration MERCOSUL trade volume jumped from $3.9
arrangements, so that we will achieve a broader billion in 1985 to $8.2 billion in 1990, and to $16.7
free trade area, whether it be hemispheric , or with billion in 1993. We most likely will finish 1995
the European Union, or with an Asian group. with a trade volume of about $24 billion. But the
overall external trade of the MERCOSUL
Just as regionalism is not opposed to countries has exhibited even more meaningful
multilateralism, the desire to deepen regional results, having gone from $48 billion in 1985 to
arrangements does not imply any opposition to the $75 billion in 1990, and surpassing the benchmark

126
of $100 billion by 1993. For this year, 199.S, we I am aware that this process is irreversible .
envisage somewh ere aro und $125 billion in the However, we still have a long way to go in
export and import of goods. When the service solidifying and consolidating these initiatives, as
sector is included , the tota l value of the Southern well as in implementing programs to reduce the
Cone countries' externa l trad e flow will be at least existing asymmetrie s and in coordinating our
$160-180 billion . macroeconomic actions, primarily within the scope
of MERCOSUL . The governments of our region
Notwithstanding the significant increase in intra- are working hard in this direction , now more than
MERCOSUL trade , which went from 11% in 1990 ever in harmony with the views of business
to about 20% in 1994, the NAFTA A countries are executives and other sectors of society, seeking to
the MERCOSUL sub-region 's largest trade deepen the sub-regional integration reflected in
partners in the Ameri cas , w ith about 22 % of MERCOSUL . Once this integration is fully
MERCOSUL 's total trade flow . It is appropriate consolidated, drawing closer to other trade blocs
at this time to draw your attention to the following and creating additional free trade areas will be
point: despite the importance of the North increasingly feasible, free from the obstacles and
American countries , the largest share of frustrations that we are overcoming, little by little ,
MERCOSUL 's trade is carried out with the with a great deal of political will and
European Union. There ar e not any "captive" determination .
markets , since the MERCOS UL countr ies are
II
characteristically global trade rs . " The results attained by Brazil under the Real Plan
are important not only for Brazil but, indeed, for
Today politicians, business executive s and workers all of the Americas. We are aware that these
have in mind what a few years ago we called the results of the Real Plan are essential in order to
MERCOSUL Dimens ion .
11 11
Policy making, make MERCOSUL stable and viable, guiding us
government decisions and business planning toward a broader Hemispheric Free Trade Area.
strategies all inevitably must take into considerat ion Stabilization with sustained growth within Brazil
a broader perspective, beyond that of ju st one 's would consolidate MERCOSUL, making it
own country. And that is what is now being done possible to draw closer -- efficiently and
within MERCOSUL. It is an unpre cedented competitively -- to both the remaining countries of
practice, one that is difficult to learn, but it will be the Americas and those of the European Union.
a characteristic of policy-making and business
decision-makingover the next few years. We have Today we are heading toward a stable situation that
no doubt that very soon the "MERCOS UL I am certain will soon guarantee for our region the
Dimension will spread to all the other sectors of
II
four essential fundamentals for an efficient
society, beginning with organized groups and later integra tion, as postulated in the example of the
reaching individual citizens who -- perhap s without European Union 's Maastricht Treaty. These are
noticing - today are reached by products, services price stability, convergence of long term interest
and hab its unimaginable a few years ago . I can rates, budget discipline and exchange rate stability.
confidemly state that very soon we will be dealing Stability is the goal that is implicit in the policies of
with a "Hemispheric Dimension " in making our the Member Countries of the Asuncio n Treaty,
economic, financial and policy decisions . whose political will was confirm ed in the Ouro
Pret o Prot ocol of December 1994 .

127
Toward a Free Trade Area of the Americas

Stephen Chesebro', President and CEO, Tenneco Gas, USA


Manuel Feliu, President, CEAL, Chile
Juan Gallardo, Coordinator, COECE, Mexico
Kevin McGrath, President and CEO, Hughes Communication, USA
July 2, 1995
"Toward a Free Trade Area of the Americas"
Remarks by Stephen Chesebro'
President and CEO, Tenneco Gas
July 2, 1995

On behalf of the business sector, I want to add my We're moving forward with our workshop
congratulations and thanks, first to the great state recommendations. We'll meet again at the follow-
of Colorado and the city of Denver, for serving as up forums, such as the Energy Forum in October
host to the Hemispheric Trade and Commerce in Washington. We'll build success one project at
Forum. a time -- and they will serve as building blocks to
achieve greater success.
I also want to add my thanks and congratulations to
the Latin American and Caribbean participants for The findings in the workshops were nearly
their active participation, and to the North unanimous, as you've heard, that the free market
American government and business leaders who creates economic growth, job opportunities and
are here. wealth. It integrates business between nations and
states. It integrates different industries, and even
The most important thanks -- for their initiative nations within hemispheres. We are all truly in
and leadership -- go to the departments of this together.
Commerce, State, Energy and Transportation, and
specifically to Commerce Secretary Ron Brown, There is much more work to do, and it requires the
for putting this forum together. Obviously he had type of relentless effort that we've seen so far .
a great supporting cast that includes Bill White
from Energy, Federico Peña from Transportation, As nations, we need to quickly develop -- with the
Trade Representative Mickey Kantor, and from the emphasis on quickly -- sound, predictable fiscal
White House, Mac McClarty . policies, consistent laws and regulations, multiple-
path development for infrastructure projects, and
The business community is prospering worldwide closer ties between nations.
because of their tireless efforts. Global and
hemispheric integration is taking place even as we And throughout all this, we must maintain the
sit here. unique social and environmental values and
integrity of each of our nations.
Remember the Miami meeting last December --
the Summit of the Americas. The unqualified We at Tenneco are pleased to have the opportunity
success there has been followed by the unqualified to participate in Latin America . As you know
success we've enjoyed here. These truly are we' re involved in two large natural gas
historic events. Each of us will look back someday infrastructure development projects -- pipelines
and say, "I was there, I was part of it," and enjoy from Argentina to Chile and from Bolivia to
the remembrance. Brazil. Both will establish markets in new areas
and alleviate significant environmental problems.
There's more to come. Dates have been set. Both will also lead to substantial follow-on
Work is assigned. Agreements have been reached development activities.
and relationships cemented, and economic progress
is spreading throughout the hemisphere. Speaking Tenneco has a long history of activity in Latin
of economic progress, what has really been America, and we have always been warmly
decided and achieved here? received there. We are pleased to have a lot of
friends and partners located there.

131
We want to expand our presence, not only in I'm luck to to have the opportunity to serve as
energy and natural gas pipelines, but also in president of a pipeline company at this historic
automotive components, forest products, farm and point in time . Our hemisphere is experiencing
construc tion equipment and shipbuilding. unprecedented economic growth. Borders are
falling, and the spirit of cooperation is growing.
So reme mber, economic development is about
people - improving their quality of life, providing I attribute a lot of this to Secretary Ron Brown and
jobs , and providing economic security. his enthusiastic, capable staff, and to all of you
here today at this historic forum .

Thank you.

132
"Toward A Free Trade and Commerce Forum"
Remarks by Manuel Feliu
Chairman of the Board
Consejo Empresario de America' Latina
July 2, 1995

Ladies and Gentlemen: This time we will say "yes" to free trade , but
looking toward the market , not away from it.
I am honored to bring to this meeting the
enthusiastic support and faith in free trade of the We will say "yes " to free trade, but to expand
BusinessCouncil of Latin America , CEAL. I am competition rather than to hamper it.
proud to lead an organization of businessmen and
womenwho perceive private initiative, the market We will say "yes" to free trade, but not to close
economy and the free exchange of goods and ourselves off from the rest of the world, but rather
servicesto be their foremost banners and pursuits. to integrate our activities even more deeply into the
I am pleased to come from a region and a nation world economy.
where these principles and priorities continue to
make headway in opportunities , recognition, We will say "yes" to free trade , but on the basis of
disciples and legitimacy. a common development model which stresses free
initiative and freedom of labor , which moves
We have been waging this battle for a long time productive responsibilities out of the public sector ,
and we feel that our ideas are shared by this and which strengthens public investment in human
forum. We believe that our hemisphere today is capital, particularly in the areas of education ,
facingan historic opportunity. The commitment of housing and health care, with a clear preference
the Miami Summit to form a free trade zone for the most impoverished.
before the year 2005 does more than pose a
challenge for governments; it summons to the We will say "yes " to free trade, with the
private sector. The test is all the greater for the understanding that this is an endeavor which calls
private sector, not only as the catalyst for for the participation, not just of our foreign
economic development, but also as the foundation ministries , but also the private sectors of each
uponwhich the structure of trade integration in the nation.
Americas will be erected.
In these tasks , we are working against time. The
The governments and leaders of the Americas are year 2005 is in fact not tomorrow; it is today. If
responsiblefor guiding the free trade project along this project does not begin to take shape now, it
the path history is moving and away from new runs the risk of becoming another common
frustrations. Latin America, particularly, is aware rhetorical fixture and just one more deception .
of several experiences of integration and
commercial agreements which, sponsored by The task we have before us is formidable, but we
market intervention oriented governments, were will have much better grasp of it following this
implemented against the market laws and against forum. In effect, it is difficult to conceive of a
economic freedom. The region has learned hard free trade zone between economies at different
lessons from these experiences and, although it stages of development. It is difficult to begin to
may seem almost unnecessary to raise the topic look at business activities from a hemispheric
here, it would be most distressing if we were to perspective where a local horizon used to suffice.
repeat our past mistakes. It is difficult to establish conditions of equal
compet1t1on where economies show profound
disequilibria and tremendous differences.

133
Undoubtedly, all of this is difficult, but certainly We need to be clear on this from the beginning:
not impossible. the worst thing we could do would be to initiate
this effort at trade liberalization by trying to
At CEAL, we believe that the challenge of a free introduce greater rigidity into the existing labor
trade zone is not consumed by the Herculean task markets. As a Chilean, I believe I have the stature
of standardizing regulations and legislation aimed to contend that such a path leads to nowhere. In
at enabling the business community to work Chile, the modernization of the labor market was
between the same floor and the same ceiling in key to the nation's rapid, successful recovery in
Detroit, Sao Paulo, Guayaquil, Tegucigalpa or the wake of the international recession and crisis of
Concepci6n. The negotiations will necessarily 1982-84. Since then, real wages have improved
have to confront -- hopefully sooner than later -- steadily, based on productivity increases.
the uneven levels from which we are starting. In
general, liberalizing efforts should focus additional Another complex topic is the environment where
energy on modernization, privatization, reducing considerable differences can also be found. The
bureaucracy, curbing public spending, fighting free market model demonstrates that there is no
corruption and expanding opportunities for the reason for development and environmental
private sector. protection to be incompatible , at least when the
incentives for respecting and safeguarding the
As compared to the North American economies, integrity of nature are well devised . The
those of Central and South America present areas economies which have yet to do so, should
were left very much behind; it will be important to naturally move toward the creation of these
acknowledge those areas when the time comes to incentives . But it is clearly unfair to impose
negotiate. Without such recognition, we will never overnight regulatory standards on the less
secure the framework of equity that is key to the developed nations, when it has taken the
formation of a free trade zone; without such a industrialized countries years to implement such
framework, achieving this goal is more than reforms, and only after causing serious
difficult; it is impossible. environmental harm.

As such, there are several critical issues on the The Latin American business community is not
agenda we have before us. I would like to note seeking, by any means , to evade its environmental
just three: responsibilities. But we should not be asked for
miracles, nor for more than our own societies are
We believe that the topic of labor is going to lead in a position to offer at this stage in their
to much confusion. Broad segments of public development.
opinion continue to believe that the reason real
wages in the southern economies are relatively Our position on infrastructure is equally delicate.
low, in comparison to those of the United States, In addition to the costs inherent to implementing a
lies in the lack of so-called "social conquests" or project or making an investment, in Latin America
entitlements achieved by our workers. Quite the business community must also bear the costs
frankly, this perception is mistaken. If salaries are resulting from deficiencies in ports , roads and
lower in Latin America than in the developed services which characterize our economies.
economies, it is not due to a lack of social
sensitivity -- as we are often led to believe -- but Worse still, our international roadways are far
rather because productivity in our region is far from meeting the needs of trade in light of
below that of the developed world. Furthermore, increased productivity. For example, no highway
for many decades, the socialist-oriented system connects with the Mexican network . Thus,
development strategies used in our nations were for Mexico -- in practice -- overland trade
responsible for keeping that productivity low. penetration ends in Guatemala.

134
fhe weaknesses ofour_infrastructure are critical. Nonetheless, even while these and other topics may
This is exemphfied in a recent study which be sensitive, the truth is that these problems will
orted that over 1.4 billion dollars worth of pale in comparison with the historic opportunity
reP . l h
competitivenessts losteac year by Chile's export that free trade in the region offers to us all: to the
communitydue to msuffic1ent infrastructure; that small nations and the larger ones, to the state-of-
is some 12% o f th e nations
C . I total exports. In
the-art companies and those which have yet to
I ' • •
otherLatinAmerican nations, the situation is even modernize, to the advanced, globalized economies
more dramatic. The issue is a serious one, since and those that are just beginning to appear on the
it affects the competitiveness of our societies and international stage.
puts our companies at a frank disadvantage vis-a-
vis the developed world. If we do things well, with a view toward the
future, with generosity, looking toward the market
At CEAL, these difficulties do not hamper our and listening to the private sector, we will all have
efforts or instill fear. We are committed to open much to gain. The hemisphere, I believe, must
marketsand to modernization. We believe that, in continue quickly toward an encounter with its new
the context of thoughtful negotiations, the opportunities. This is not the first time that the
differencesthat exist and the problems we confront Americas have been called to face a common,
needto be acknowledged and tackled with realism higher destiny. But events seem to indicate that
and a sense of equal standing for all. this call is the final one and that -- therefore -- we
have no time to loose.

Thank you.

135
"Toward a Free Trade Area of the Americas"
Remarks by Juan Gallardo
Coordinadora de Organizaciones
Empresariales de Comercio Exterior, Mexico
July 2,1995

On behalf of the Mexican private sector, I would Many of them are already being applied.
like to thank our hosts for organizing an
enormously exciting forum. We consider it a Third.- The goal now effectively established is
privilege to have shared these days with such an nothing short of real integration in a single
extraordinary gathering from all over the undertaking . This clearly means two things:
Hemisphere.
A comprehensive agreement from dispute
Together, in this "mile high" city, all our countries settlement to environment that includes all issues.
have taken a major step forward.
A commitment in all countries to real changes
From Simon Bolivar's first call 150 years ago from eliminating the misuse of trade remedy laws
through to John Kennedy's Alliance for Progress in to fostering a hemispheric competition policy.
the 60' s, many initiatives, have been put forth for
hemispheric integration. Never have the following Last. - Today we have the trigger for success - a
four key elements been present as they are loud calendarized, structured, work program with all
and clear in the Joint Denver Declaration of parties on board . This work program is only as
Ministers. good as we make it.

First.- We are all now convinced that trade is the The spirit of this forum clearly recognizes the
proven wealth multiplier and we all see its value of real involvement of the private sector.
enhancement as a key way to raise the standard of
living in our respective countries. For this reason, There are four reasons for this:
the question of authorship is not under debate and
belongs to all simultaneously. The first three First.- No one better than the players on the field
words: "We the Ministers ... " say it all. can structure and commit specific achievable
targets.
Second.- Of course there are valuable existing
structures and agreements. Second.- Creative solutions are an essential part of
this process. The linkage and synergy between all
Of course there is a need for reciprocity, our private sectors, as seen here today, contribute
progressive transitions and constructive bridge to imaginative problem solving .
building.
Third.- Free trade agreements are massive
Of course there are sensitivities. Yet, this time the detonators of change and modernization . In that
problems are all ours on the table shared with context, our private sectors must clear the path by
frankness and friendliness . building the necessary consensus within our
spheres of influence .
The enormous wealth of talent in this room
constitutes a unique brain trust that should be used Finally. - The challenge of implementation :-
as an essential building block . "making it happen after the deal is done" -- is
daunting and fundamentally the responsibility of
We all know there are solutions. the private sector.

136
Private sector involvement must be a real There is a very appropriate saying in my country
partnership with workers and scholars in full synch for this occasion:
withour negotiators, with a disciplined, systematic
approach that addresses the broader requirements "The worst enemy of something good, is
for competitiveness. We, in Mexico, as I am sure something perfect. "
each of you in your countries, are very proud and
committed to this partnership. All the elements are here today to make it happen.

We can -- and we will.

137
"Toward a Free Trade Area of the Americas"
Remarks by Kevin N. McGrath
President and CEO, Hughes Communications, USA
July 2, 1995

Good Afternoon. felt there was greater potential for such a business.
This conference reinforces that view.
It is indeed an honor to be addressing today's final
session. Now, as proud as I am of this venture, I am not
going to use my speech as an advertisement for the
Let me add my voice of praise to that already project. We will have competitors--good and
spoken for the outstanding work of Secretary strong competitors--in the direct-broadcast-
Brown , Governor Romer, Lt. Governor business: Panamsat, Globsat, Nahuelsat, Intelsat,
Schoettler, Representative Schroeder, Under- and, possibly even, Rupert Murdoch. Rather, I
Secretary Rothkopf and your entire team. will use this as an example of how one can fashion
a successful business in a manner which I believe
I would like to echo the thoughts of Senor is necessary to shaping the free trade area of the
Gallardo . This conference begins to fulfill the Americas.
dreams of our great hemispheric leaders: Artigas,
Bolivar, O'Higgans, Morelos, San Martin and It involves three critical elements:
Washington. Frankly, I will tell you that I have
been awed by the breadth of discussion over the 1) Building a business with strong partners from
last several days . within the region. These partners must be
entrepreneurs first, and then, strong politicaJly.
My remarks will be brief. We have these. In Mexico, our parmer is the
Vargas family which owns Multivision-the largest
The company I run--Hughes Communications--is pay-TV company in Mexico . In Brazil, our
reasonably well-sized -- about $400 million in partner is Roberto Civita of the Abril Media
annual revenue. Its principal business has been Group, the largest publisher in Brazil. And, in
satellite ownership and operation. It is part of Venezuela and elsewhere, our partners are
Hughes Electronics, which has about $15 billion in Gustavo and Ricardo Cisneros--the owners of
annual revenue--wbich is part of General Motors, Venevision and other media properties.
which has $150 billion in yearly revenue. Moreover, we will have local partners in every
country in the Caribbean and South America. We
The new business we' re engaged in - in the don't do this because of charity--we do it as a
Caribbean, Central and South America - is a result of enlightened self-interest. These partners
direct-to -home satellite television distribution understand their markets and work better with their
business called Galaxy Latin America based upon Governments than we ever will.
the DIRECTV technology implemented by Hughes
in the United States last year. I'm talking about a 2) Building bridges to each of the Governments.
truly multinational enterprise which integrates the In our business- -telecommunications and media--1
entire hemisphere in one media business . can think of no area which has more strategic
importance. We have found that Governments
I can tell you that when Hughes and GM worry about 4 things when a new business arrives:
Management and the GM Board approved this
multi-hundred million dollar investment earlier this 1) How does this new business impact our
year, there was no place on the globe where we laws?
2) What does it do for our people?

138
3) Will it engage in fair competition? and
With regard to education, we are currently
4) How does it impact existing businesses?
working with universities in the United States and
South America to develop elementary , secondary
These are legitimate questions . They must be and college level educational channels. Our vision
properly dealt with. We are dedicating a of the Americas includes an environment where
significant share of our management attention in our children and even adults have the tools
this area. available to constantly grow and improve
themselves.
Moreover, an important aspect of this issue is the
support of the U.S. Government in building these And, oh, imagine being able to watch outstanding
bridges. We have clearly rece ived that support soccer games from every country in South
through the actions of Secretary Brown and the America and even Europe .
positive actions of the U.S. Federal
Communications Commission in offering to open Now what are the risks?
the U.S. markets in the spirit of reciprocity .
1) Well-intentioned Government officials will
3) Offering a Quality Product of Service that is attempt to over regulate the technology and the
reasonably and fairly priced. content. I suggest our citizens can make choices
faster and better .
The service we offer will provide laser disk quality
video and CD quality stereo sound . The service 2) Our competitors will attempt to raise barriers .
will offer 70+ channels of movies, sports,
novellas cable and cultural programming , news I suggest free competition produces better services
and education in Spanish, Portuguese and English. at lower prices.
Now, I know some of you will say , why do I need
70+ channels? The easy answer is you don't. But And finally,
you like sports, and you like movies, and you like
news channels and I want educational 3) Economies within the region may make such
programming for our children--that's where businesses subject to substantial financial risk .
seventy channels comes from--choice.
I would suggest that ups and downs in the
Letme talk about two types of services only: news economies of one country or another should be
and education. Imagine a customer in Argentina predicted. Our business dealings should anticipate
being able to watch the local news from the United an occasiona:l rough road.
States, Mexico, Columbia, Venezuela and Brazil.
I can think of no way to better assure integration in In this respect , it will pay to have the highest
societiesand toward free trade than for our people quality service, the best partners, and deep
to hear and understand first hand those things pockets .
which effect us in our daily lives.
Thank you very much.

139
ConcludingRemarks

Hon. Ronald H. Brown, U.S. Secretaryof Commerce


July 2, 1995
Remarks by
The Honorable Ronald H B
Secretary ofc · rown
o ommerce, United States of America
July 2, 1995

[as prepared for delivery]

Goodafternoon. Rather than offer the soaring


also brought a clearer perception of the private
statementof farewell and charge to carry on the
sector's role in bringing it about. You have been
Miami Process of hemispheric integration as an
leading the process of hemispheric commercial
occasionlike this would seem to require -- I' d like integration for many years. With this conference
insteadjust to offer heartfelt thanks and gratitude we are harnessingyour knowledge and experience
foryourparticipationand everything we have been in the service of free trade throughout the
ableto accomplish over the last four days. hemisphere.

Whathas happened here has been extraordinary. Again, my thanks for coming to Denver. Co-
Overa thousand people -- far more than we had hosting this event has truly been one of the
hopedor expected -- have come together to push highlights of my service as Secretary of
forwardthe process of hemispheric commercial Commerce. I believethe processes we have set in
integration
, to accelerate the arrival of the benefits motionthis weekwill have profound and beneficial
freetradeand growing economies will bring to the effects for many years to come.
almost800millionpeople of this hemisphere. The
interestin this event has been overwhelming. There have been a number of highlights over the
last four days.
Whatmadethis Hemispheric Trade and Commerce
Forum truly historic, however, was the Our hosts -- Colorado and Governor Romer,
unprecedentedparticipation of the private sector. Denver and Mayor Webb -- have shown that this
Yourinterest, your input, your collaboration have truly is an internationalcity . . . both charming and
become the key to a rapid and efficient businesslike. . . the crossroads of the Americas .
hemisphericintegration process. . . poised to reap tremendous benefits in an
integratedhemisphere.
Traditionally governments have acted -- both
unilaterallyand in concert with one another -- to BusinessDevelopmentCouncil meetings between
shape the international trading system without the U.S. and Brazil and the U.S . and Argentina
consulting the people who best understand broughtthe public and the private sectors together
internationaltrade. And in the past few years, to achievetangiblebilateralprogress -- steps on the
governments have done pretty well. Trade road to integration.
barriershave fallen throughoutthe Americas. Last
December'sMiami Summit was as much a product The Trade Ministerial, and the bilateral meetings
of the new commercial environment as of I held revealed a depth of commitment to freer
democracy's emergence. The Miami Summit's trade that was truly heartening. A year ago this
mostdramatic breakthrough was a declaration of hemispherewas splintered among regional trading
blocks and bilateral arrangements. While the
supportfor a Free Trade Area of the Americas.
realityof many separatearrangementsremains, the
ideaof a unified and coherent hemispheric trading
But governments acting alone simply are not as
system has taken root. The question of a Free
effe
ctive in promoting free trade as governments
Trade Area of the Americas is not "if" but
acting in partnership with the private sector• Our
"when."
newunderstandingof the benefits of free trade has
143
Of course, until the ideal of free trade grows into We break down barrier s when political and
formal arrangemenrs,the private sector is creating economic democracy create unprecedented
the bonds that hold us together. And the time opporttmit ies for workers to achieve security and
spent yesterday in the Plenary session and the find opporrunityfor themselves and their children.
workshops I attended- time spent working with
private businesspeople face-to-face - was perhaps And we break down barriers when governments
the most important time I spent in Denver . reach out to the men and women of the private
sector to cooperate in building a new economic
Work.ingtogether, we are fashioning an era as one world and together pursue the goal of a more
in which barriers fall and people come together to integrated and prosperous society .
overcome challenges and create opportunity with
an unprecedented strength and determination. Over these four days in Denver , we have made
historic strides toward an integrated hemisphere
We break down barriers when thirty four nations and begun to build a historic bridge between the
come together to find common ground for public and the private sectors that will carry us into
commercial relations that make us stronger and the 21st Century.
more prosperous.
I look forward to further work with all of you to
make real our dream of a Free Trade Area of the
Americas .

144
Appendices

Summit of the Americas TradeMinisterial,Final Joint Declaration


WesternHemisphereTradeand CommerceForum Agenda
NationalForums
SUMMITOF THE AMERICAS
TRADEMINISTERIAL

Denver, Colorado
June 30, 1995

FINAL JOINT DECLARATION

INTRODUCTION

1. We, the Ministers responsible for trade representing the 34 nations which participated in the Summit
1
of the Americas (SOA), met in Denver for the first Trade Ministerial meeting mandated by our Heads of State
and Government. We agreed to begin immediately a work program to prepare for the initiation of negotiations
of the Free Trade Area of the Americas (FT AA) in which barriers to trade and investment will be
progressively eliminated. Negotiations will be concluded no later than 2005.

2. We examined approaches for constructing the FTAA which will build on existing subregional and
bilateral arrangements in order to broaden and deepen hemispheric economic integration and to bring the
agreements together. We will strive to maximize market openness through high levels of discipline as we build
uponexisting agreements in the Hemisphere. We agreed to ensure that the FT AA will: be fully consistent with
the provisions of the Agreement Establishing the World Trade Organization (WTO Agreement); be balanced
and comprehensive in scope, covering among others, all areas included in the SOA Plan of Action; not raise
barriers to other countries; and represent a single undertaking comprising mutual rights and obligations.

3. In view of the wide differences in levels of development and size of economies, we will actively look
for ways to provide opportunities to facilitate the integration of the smaller economies and increase their level
of development.

4. We recognized the importance to our nations of achieving macroeconomic stability and the efforts
being made by countries in our Hemisphere to achieve such stability.

INITIALWORK PROGRAM

5. Based on decisions made at the Summit of the Americas , we decided to initiate preparation for active
negotiations. In order to meet our Heads' of State and Government commitments for constructing the FT AA,
we recognized the need for immediate preparatory work in the Hemisphere and therefore are establishing
working groups in the following areas: Market Access; Customs Procedures and Rules of Origin; Investment;
Standardsand Technical Barriers to Trade; Sanitary and Phytosanitary Measures; Subsidies, Antidumping and
Countervailing Duties; and the working group on the Smaller Economies.

6. The overall program of each working. group_ shoul~ include the identification and examination of
existing trade-related measures in each area, with a view to identifying possible approaches to negotiations.

1
Antigua and Barbuda, Argentina, Bahamas , Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica,
Dominica,Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala Guyana,_Haiti,_Honduras, Jamaica, Mexico, Nicaragua,
Panama Paraguay, Peru, St. Vincent and the Grenadines, St. Lucia, St. Kitts and Nevis, Sunname, Tnmdad and Tobago, Uruguay,
eUUnited
· States of America, and Venezuela.

147
We are providing overall guidance, including a beginning timetable and initial coordinators, for each working
group in the Annex. We will receive reports and determine at the March 1996 Trade Ministerial meeting the
next steps to be taken in each area, including an appropriate timetable for further work .

7. At the March 1996Trade Ministerial, we will establish working groups and their terms of reference
in the following areas: Government Procurement; Intellectual Property Rights; Services; and Competition
Policy.

8. All Working Groups will be open to the participation of all nations. We direct our Vice Ministers to
meet, as needed, before the March 1996 Trade Ministerial to coordinate the work and to review progress of
the working groups, and ask that the host of the March 1996 Trade Ministerial chair such meetings . We ask
the tripartite committee - the OAS, the IDB and ECLAC 2 -- to provide analytical support, technical assistance,
and relevant srudies within their respective areas of competence, as may be requested by the working groups .

REPORTS ON WORK UNDERWAY

9. We received reports on the status of work undertaken in the various trade and investment fora and
noted the entry into force of the MERCOSUR Customs Union on January 1, 1995; the entry into force of the
common external tariff among the Andean Group countries on February 1, 1995; the entry into force of free
trade agreements between Mexico and Costa Rica on January 1, 1995, Mexico and Bolivia on January 1, 1995,
Chile and Ecuador on January 1, 1995, and the Group of Three (Mexico, Colombia, and Venezuela) on
January 1, 1995; the scheduled accession of Suriname to the Caribbean Community on July 4, 1995; and the
discussions within other subregional groups on strengthening and broadening economic integration in the
Hemisphere.

10. The Special Committee on Trade (SCT) of the OAS submitted an initial report on its activities . We
commended the SCT, which last convened in Montevideo on June 14-15, 1995, for completing the first stage
of a compendium and a comparative analysis of integration agreements in the Hemisphere, and the preliminary
study on tariffs and rules of origin. We look forward to receiving the full report of the SCT at the March 1996
Trade Ministerial. We stressed the importance of the SCT's analyses in the preparatory phase of constructing
the FTAA and of work by the tripartite committee -- the OAS, IDB, and ECLAC -- in providing information
for our subsequent decisions on future work for our governments.

OTHER MATTERS

11. We are committed to transparency in the FT AA process. As economic integration in the Hemisphere
proceeds, we welcome the contr1but1onof the private sector and appropriate processes to address the protection
of the environment and the further observance and promotion of worker rights, through our respective
governments.

EJJIJJRE MINISTERIALMEETINGS

12. We accepted the invitation of the Government of Colombia to host the next Trade Ministerial to be
held in March 1996. On that occasion, we will establish the date and venue of the third Trade Ministerial.

2Representatives of the Organization of American States , the Inter -American Dcvelopme (IDB)
· an d th e C an I
Economic· Comm1ss1on
• ·
1or La tm
· Am enca an (ECLAC) were invited as observers . '

148
Annex
PLAN OF WORK

WORKINGGROUPS
JPS

We instruct each working group below to complete a report for presentation to the March 1996 Trade
Ministerial, including recommendations for subsequent action.

(1) The Working Group on Market Access will:

construct and organize in the most efficient manner possible a comprehensive data base on market
access barriers (tariffs and nontariff measures as required for the WTO Integrated Data Base) in the
Hemisphere covering all industrial and agricultural products, using the format of the WTO Integrated
Data Base;

make specific recommendations for conducting market access negotiations.

(2) The Working Group on Customs Procedures and Rules of Origin will:

compile in the most efficient manner possible a comprehensive inventory of Hemisphere customs
procedures and determine the feasibility of publishing a Hemisphere Guide to Customs Procedures;

develop features that are fundamental to an efficient and transparent system of rules of origin,
including nomenclature and certificates of origin;

identify areas for technical cooperation in customs operation, such as connections among computerized
systems and the prevention of fraud;

recommend a specific approach for Hemisphere-wide simplification of customs procedures;

make specific recommendations for conducting negotiations on rules of origin.

In view of the different expertise required to work on Customs Procedures on the one hand, and Rules of
Origin on the other, the members of this Working Group should consider the most efficient way to ensure
participation of the appropriate experts.

(3) The Working Group on Investment will:

create an inventory of investment agreements and treaties , and the protection therein, that exist in the
region;

compile in the most efficient manner possible and inventory of investment regimes in the region and,
on the basis of this information, determine areas of commonahty and divergence and make specific
recommendations.

(4) The Working Group on Standards and Technical Barriers to Trade will:

recommend specific ways to enhance transparency, especially in standards development;

149
compile information on the bodies that exist which are charged with conformity assessment to
technical regulations in the Hemisphere, and those organizations that accredit such bodies;

recommend methods to promote understanding of the WTO Agreement on Standards and Technical
Barriers to Trade, including through technical assistance;

make recommendations on product testing and certification, with a view to mutual recognition
agreements.

(5) The Working Group on Sanitaryand Phytosanitary(SPS) Measures will:

create an inventory of all agreements on SPS in the Hemisphere and compile in the most efficient
manner possible an inventory of SPS regimes in the region;

recommend specific ways to enhance transparency and information-sharing and improve


understanding of laws and regulations that affect trade flows in the region ;

identify practices that may need improvement, and make recommendations for their improvement ;

promote understanding of the WTO Agreement on Sanitary and Phytosanitary Measures , including
through technical assistance, and recommend measures for the effective implementation of this
Agreement;

enhance mutual understanding of the scientific basis for SPS certification procedures, with a view to
recommend ways to promote recognition of certificates among countries of the Hemisphere;

compile by the most efficient means possible the methods used for risk assessment in the Hemisphere ,
with a view to work toward common approaches.

(6) The Working Group on Subsidies, Antidumpingand CountervailingDuties will:

identify agricultural export subsidies and other export practices with similar effects on Hem ispheric
trade;

recommend ways to address all trade-distorting export practices for agricultural products that are
traded in or with the Hemisphere;

promote understanding of WTO obligations in the area of subsidies, and begin to compile an inventory
of subsidies practices in the Hemi sphere;

review information on the dumping and subsidies laws of countries in the Hemisphere;

exchange view s on the application and operation of trade remedy laws regarding subsidies and
dumping and develop recommendations for further work .

150
(7) The Working Group on Smaller Economies will:

identify and assess the factors affecting the participation of smaller economies in the FT AA and the
expansion of trade and investmem stimulated therefrom;

idemify and examine ways to facilitatethe adjustmem of the smaller economies to the FT AA process ,
including the promotion and expansion of their trade , and provide recommendations on measures to
be taken and issues to be taken into account in the negotiations of the FT AA ;

request the IDB, ECLAC, the OAS and other relevant institutions to provide pertinent information
on their activities to facilitate integration of the smaller economies in the Hemisphere .

INITIALWORKING
W GROUP COORDINATORS

We have agreed that the first meeting of each Working Group will be arranged by the following coordinators,
which will inform all countries in the Hemisphere of the proposed initial meeting:

Market Access: El Salvador


Customs Procedures and Rules of Origin: Bolivia
Investment: Costa Rica
Standards and Technical Barriers to Trade: Canada
Sanitary and Phytosanitary Measures: Mexico
Subsidies, Antidumping and Countervailing Duties: Argentina
Smaller Economies: Jamaica

151
WESTERN HEMISPHERE TRADE AND COMMERCE FORUM
Denver, Colorado
July 1 - 2, 1995

AGENDA

Overview

Toe Western Hemisphere Trade and Commerce Forum will be a series of interactive sessions between private sector and
government representatives from throughout the hemisphere focusing on the core aspects of commercial integration in
the wakeof the Summit of the Americas' mandate to create a "Free Trade Area of the Americas" by 2005.

The program is designed to foster dialogue between the private and public sectors regarding areas the private sector
believescould facilitate progress toward a hemisphere-wide free trade area. Forum sessions will be led by government
officialsand private sector representatives. Forum discussions will result in recommendations from the private sector
that will eventually be presented to governments for their review after the Forum.

Friday June3Q J 995

8:00a.m.- Forwn Registration and Credentialing Location : Colorado Convention Center


8:00 p.m. For those arriving earlier, registration will also be available from 12:00 p.m . - 8 :00 p.m . on Thursday.
A photo ID is necessary to attend all Forum activities.

SHUTTLE BUSES WILL TRANSPORT THE DELEGATIONS TO INTERLOCKEN - TIME AND DETAILS TO BE DETERMINED

8:00P.M. OPENING RECEPTION AND DINNER LoCATION : lNTERLOCKEN BUSINESS PARK


(HOST COMMITTEE)

Saturday, July 1, 1995

Throughout the day on Saturday in Lobby B of the Convention Center, there will be technology demonstrations that
illustratethe themes of the Forum. Live demonstrations will be held from 5:00 to 5:30 p .m.

8:00 a.m. Continental Breakfast Location : Colorado Convention Center Ballroom Foyer

8:30- Opening Addresses


9:30 a.m. "The Spirit of Miami: Building the Bridge~ of CommerrcialIntegration
Themes : The role of the private sector m economic mtegrat1on and the importance of infrastructure to
that process. Commission the Forum to produce _private sector recommendations on means for
streamlining daily business transacuons as a contnbuuon toward hemispheric commercial integration.

Welcoming Remarks
Governor of Colorado Roy Romer
Introductory Addresses
Hon . Ronald H . Brown, U.S . Secretary of Commerce .- Co -Host
H on. Mickey Kantor, United States Trade
fT
Repre sentat ive - Co-Host
.
Hon. Federico Peña, U .S . Secretary o ransportauon
Program Overview
Hon. David Rothkopf, U.S . Deputy Under Secretary of Commerce

153
9:30 a.m. - Sectoral Workshops Location: Colorado Convention Center Meeting Rooms
12:00 p.m. Panelists will include chief executives of the hemisphere's leading companies in their respective fields,
government officials and experts. Discussions will focus on commercial integration issues from a
sectoral perspective, trade andinvestment barriers, related regulatory issues, and major projects in the
region. On the second day (Sunday morning) sectoral workshops will prepare and approve private
sector recommendations which will be presented at the closing plenary session.

I. "Building the Foundation of a Hemispheric Information Infrastructure" Focus on the growing hemispheric
telecommunications and information technologies market, and on advancing hemispheric economic integration through
the creation of a hemispheric information infrastructure by implementing needed policy and regulatory measures.

Chair: Hon. Ronald H. Brown, U.S. Secretary of Commerce

Panel 1: "New Technologies: Shaping the Information Infrastructure for Hemispheric Economic Integration"

Moderator: Ernst Burri, Chairman and CEO, Compañia Dominicana de Telefonos (CODETEL), Dominican Republic

Panelists: Fernando Borio, Secretary General, TELEFONICA de Argentina, Argentina


Maria del Rosario Medero Ranzini, President, ANTEL, Uruguay
Maria Cristina de Mejia, President, Celumovil de Colombia S.A., Colombia
David Porter, Vice President, Technology and Infrastructure, AT&T, USA
Joost Van Damme, Vice President, TELEBRAS, Brazil

Panel 2: "Telecommunications Policy and Regulatory Steps to Achieve Economic Integration in the Americas"

Moderator: Hon. Larry Irving, Assistant Secretary for Communications and Information,
U.S. Department of Commerce, USA

Panelists: Jaime Chico Pardo, Director General, TELMEX, Mexico


Claudio Garcia, Senior Corporate Vice President and Chief Financial Officer, Compania de Telefonos de
Chile, S.A. (CTC), Chile
Jorge Kunigami, President, Organismo Supervisor de Inversion Privada en Telecomunicaciones
(OSIPTEL), Peru
Rolando Rivas, Director General, TELCOR, Nicaragua
Jose Soriano, Director General, CONATEL, Venezuela

II. "Meeting the Energy Needs of the Americas" Panelists will discuss the business opportunities in the energy
sector in _the Americas especially the importance of access to energy as a fundamental aspect of integration and the
opportunities for regional cooperation The d1scuss1onwill focus on vanous factors which will affect the energy market:
privatization, financing, and environmental concerns.

Panel 1: "HemisphericEnergy Integrationand Cooperation"

Moderator: Hon. William White, Deputy Secretary of Energy, U.S. Department of Energy

Panelists: James Bannantine, Principal, Enron Development Corp., USA


Raul A. Aguero, Deputy Secretary for Fuel, Ministry of Energy, Argentina
Thomas G. Boren, President and CEO, Southern Electric International, USA
Stephen Chesebro', President and CEO, Tenneco Gas, USA
Edgar Romero Nava, President, FEDECAMARAS, Venezuela

154
panel 2: "Challenges to Energy Integration"

Moderator: Amb. Paul Boeker, President, Institute of the Americas, USA

panelists: Raul Garcia, President, Ente Nacional Regulador del Gas, Argentina
H.E. Peter Greiner, Executive Secretary for Energy, Ministry of Mines and Energy, Brazil
Douglas Jones, Director, National Regulatory Research Institute, USA
Patricio Perkins, Board of Directors, Yacimientos Petroliferas Fiscales (YPF) and Country Director,
Oppenheimer Argentina, Argentina
Antonio Vives, Division Chief, Infrastructure and Financial Markets, Inter-American Development Bank

m. "Transportation: Moving the Hemisphere Together'' Panelists will discuss how transportation services can
be improved in the hemisphere. The discussion will emphasize developing multilateral policy approaches to transportation
problems, eliminating barriers to free and open competition, reducing the regulation of international transportation,
integrating transportation services firms across borders, and investing in and building transportation infrastructure.

Panel 1: "Transponation Services Bringing the Hemisphere Together"

Moderator: Hon. Federico Peiia, U.S. Secretary of Transportation

Panelists: Guillermo Berriochoa, President, Transportes Inter-MEX, Mexico


Edward Driscoll, President, National Air Carrier Association, USA
Edward Emmett, President, National Industrial Transportation League, USA
Carlos Viveros, CEO, Tecomar S.A., Mexico

Panel.2: "Building the Transponation Infrastructure for the Hemisphere"

Moderator: Humberto Seijas, Chairman, Latin American Delegation American Association of Port Authorities,
Venezuela

Panelists: Jaak Rannik, President and CEO, B & R Group, Dominican Republic
Derish Wolff, President and CEO, Louis Berger International, USA
Jorge Gonzalez, President, Airways Engineering Corporation/AAROTEC, USA
Carlos Roberto Silvestrin, Director Executivo, ADTP/Agencia de Desenvolvimento Tiete Parana, Brazil
Paulo Augusto Vivacqua, Director-Presidente, Consorcio Operacional do Corredor Centroleste, Brazil

IV. "Agribusiness in the Free Trade Area of the Americas" Panelists , drawn from a cross section of industry and
governmentfrom throughout the hemisphere, will discuss the benefits from greater hemispheric integration and the policy
and regulatory challenges that must be overcome.

Panel 1: "Market Opportunities and Challenges"

Moderator: Hon. James Schroeder, Di:puty Under Secretary for Farm and Foreign Agricultural Services, u .S
Department of Agriculture, USA

Panelists: Salvador Carb6 Board of Directors, Bunge and Born, Argentina


Luis Fernando Furlan, Chairman of the Board, Sadia Concordia S.A. lndustra e Comercio, Brazil
Phil Seng President and CEO, U.S. Meat Export Federation , USA
John Wer~er, President and CEO, Heinz Venezuela and Area Director for Latin America, Venezuela

155
Panel 2: "Regulatoryand Policy Issues"

Moderator: Carlos Aquino Gonzalez, Director General, Inter-American Institute for Cooperation on Agriculture

Panelists: G. Allen Andreas, Counsel to the Executive Committee, Archer Daniels Midland Company, USA
Ronald Bown, President, Asociacion de Exportadores de Chile, Chile
Marcelo Avogadro, Under Secretary for International Trade Relations, Ministry of Foreign Affairs,
Argentina
H.E. Pablo Pereira, Minister of Economy and Development, Nicaragua

V. "Tourism: Expanding CommercialHorizons" Participants will identify and discuss possible impediments to
expanding travel and tourism related business trade and investment, and the opportunities in this sector for Hemispheric
commercial integration.

Panel I: "ExaminingCommercialIntegrationof TourismServices"

Moderator: Carlos Asensio, President, Aerorepresentaciones Consultores lnternacionales, Argentina

Panelists : H.E. Lilliana Canale Novella, Minister of Industry, Tourism, Integration, and International Trade
Negotiations, Peru
Michael Halle, Executive Producer of Tourism Technology, Virtual Warehouse, Canada
Alfonso Mujica, President, National Chamber of Commerce of Chile, Chile

Panel 2: "Opportunitiesfor Investmentand Promotionof Tourism-relatedBusiness"

Moderator: Caio Luiz de Carvalho, President, Brazilian Tourist Agency, Brazil

Panelists: Luis Dodero, Vice President and General Counsel, MIGA, The World Bank
Adnan Hassan, Global Manager, Investment Promotion Agency Network, MIGA, The World Bank
H .E. Francisco Alberto Mayorga, Secretary of Tourism, Argentina
Merrett Stierbeim, President and CEO, Greater Miami Convention and Visitors Bureau, USA

VI. "Improvingthe Hemisphere'sHealth through Open Markets" Panelists will assess the changing healthcare
systems and discuss the strategic alliances among governments, universities, and hospitals within the region . The
discussion will also focus on ways to liberalize barriers to trade and create market opportunities for health technologies
and services .

Panel I: "Integratingthe HealthcareInfrastructure"

Moderator: Pablo Valencia, Director, Office of Technology and Transfer, University of Southern California, USA

Panelists : David Brandling-Bennett, Deputy Director, Pan American Health Organization


Arnb. Sonia Picado , Ambassador to the United States from Costa Rica
Ian Rawson, Senior Vice President, Allegheny General Hospital, USA
Jorge Solorzano Mosqueda, Director General, Hospital Santa Fe, S.A . de C.V ., Mexico

156
Panel 2: "Breaking the Barriers to Trade and Creating Market Opportunities in a Hemisphere-wide Free Trade Area"

Moderator: Mario Rafael Caviedes, Executive President, Chilean Association of Private Health Delivery, Chile

panelists: Harvey Bale, Sr. Vice President, Pharmaceutical Research and Manufacturers Association, USA
David Brandling-Bennett, Deputy Director, Pan American Health Organization
Carlos Gracia, Director of Health Programs, Ministry of Health, Mexico
Ronaldo Pitta, Treasury Secretary, Associacao Brasileira da Industrias e Art . e
Euip. Med. Odont. (ABMO), Brazil
Grey Warner, Senior Vice President, Merck Latin American Region, USA

VII. "Environmentand the Economics of Integration" Free trade and increased economic integration are key
factors for sustainable development. At the Summit of the Americas, a commitment was made to make environmental
and trade policies mutually supportive throughout the process of economic integration . Heads of state at the Summit
further committed to emphasize pollution prevention and the promotion of public participation. This workshop seeks
views on how to implement these commitments.

Panel 1: "Environmental Regulation and Trade Integration"

Moderator: Victor Lichtinger, Executive Director of the North American Commission for Environmental Cooperation,
Mexico

Panelists: Jorge Cabrera , Secretary, Central American Environmental Commission , Guatemala


Raul Deju, President, Chemical Waste Management, Western Region, USA
William Futrell, President, Environmental Law Institute, USA
Pedro Tarak, Director, Fundacion Ambiente y Recursos Naturales (FARN), Argentina

Panel 2: "Cooperative Approaches to Cost-Effective Environmental Protection"

Moderator: Ralph Peterson , CEO, CH2M Hill International Ltd., USA

Panelists: P .J . (Jim) Adam, CEO, Black and Veatch, USA


Joel Charm, Chairman , Technical Advisory Subgroup for ISO 14000, USA
Gary Gallon, President, Canadian Environment Industry Association Canada
Manuel Olivera, Manager of Environmental Affairs, Asoc1ac1onNac1onal de lndustriales , Colombia

12:00 p.m. - Special Remarks Location : Colorado Convention Center Ballroom


12:30 p.m. "The Miami Process: The Spirit of Cooperation"
Themes: Results of the Summit of the Americas and activities to implement the Declaration and Action
Plan that were agreed to by Leaders . Hemisph_eric commercial liberalization as an important facet for
advancing the Summit of Americas' Declarauon of Prmc1ples.

Introductions
Gail Schoettler, Lt. Governor of Colorado
Buddy Mackay, Lt. Governor of Florida
Address .
Hon . Thomas F . McLarty, III, Couns elor to the President

(Luncheon will be served between remarks by Counsellor MclArty and the following panel .)

157
12:30 - Luncheon Location: Colorado Convention Center Ballroom
1:15 p.m.

1:15 - Plenary Session Location: Colorado Convention Center Ballroom


2:30 p.m. "Toward a Hemispheric Capital Markel"
Themes: The relevance of enhanced capital flows to commercial integration and the steps governments
and the private sector can take to encourage it. Without modem and efficient capital markets, countries
and businesses will not have access to the resources necessary for steady growth . The Summit of the
Americas' plan of action includes a provision regarding capital markets development and liberalization
which may be addressed.

Moderator: William Rhodes, Vice Chairman, Citibank, USA

Panelists: H .E. Domingo Cavallo, Minister of Economy, Argentina


Enrique Iglesias, President, Inter-American Development Bank
H.E. Marie Michele Rey, Minister of Finance and Economy, Haiti

2:30 p.m. - Functional Workshops Location: Colorado Convention Center Meeting Rooms
S:00 p.m. Panelists will focus on commercial integration issues from a functional, cross-cutting perspective :
regulatory, standards and legal issues that affect all sectors and which can facilitate or impede integration .

I. "Hemispheric Commerce: Setting the Standards of Integration" Transparent and accessible systems for
standards and conformity assessment are critical for market access in the hemisphere. The Panel will explore prospects
and means to harmonize standards, technical regulations, and conformity assessment systems in the Americas .

Panel 1: "Standards"

Moderator: Richard LaFontaine, President, Standards Council of Canada, Canada

Panelists: Andrea Jensen, Senior Director for Standards, NSF International, USA
Pablo Benia, Director, lnstituto Uruguayo de Normas Tecnicas, Uruguay
H .E. Jose Vicente Maldonado, Minister of Industries and Commerce, Integration and Fishing Ecuador
Sergio Mazza, President, American National Standards Institute, USA •

Panel 2 · "ConformityAssessment"

Moderator: Hon. Mary L. Good, Under Secretary for Technology , U .S. Department of Commerce

Panelists : Thomas Castino, President, Underwriters Laboratories, Inc., USA


John Kean, President , Canadian Standards Association, Canada
Silvia Portnoy, President, National Institute of Industrial Technology, Argentina
Augusto Pozo Pino, Director , Centro de Calidad, Mexico
Julio Cesar Carmo Bueno, President, Metrology Institute, Ministry of Industry
Commerce and Tourism, Brazil '

158
II. Enhancing Integration through Legal Systems" Modern legal systems and effective means for settling
cialelis?J1CS
att essential to an integrated commercial system and the facilitation of trade and investment in the
Hemisphere panels will
will lookal ways to address diff erenccs in legal systems in order to promote commercial i01egration
.;i~ poceDlialfoT corruption in the regjon.

Panel 1: Integrating Commercial Law Systems

Moderator Hoo. Ginger Lew, General Counsel, U.S. Department of Commerce

Panelists: JoseAlexander Tavares Guerreiro, Professor of Commercial Law University of Sao


Paulo Law School, Brazil
Boris Kozolchyk. Director, NationalLaw Center for Inter-American Free Trade, USA
Alejandro Ogarrio. Mexican representativeto UNICTRALPartner at Buffete Ogarrio y Dias, Mexico
Stephen T. Zamora.Director International Law Institute University of Houston Law Center, USA

Modetal«: Hon. Ginger Lew, General Counsel, U.S. Departmem of Commerce

Panelists RobertoDañino Partner. Rogers and Wells USA


JamesM. Lyons, Partner, Rochberger, Appel, Powers & Johnson. USA
Heman Perez, Atomey, Empresa .Electricadel Ecuador, Ecuador
Edgard Romero • Nava, President, FEDECAMARAS Venezuela

m. Small and Medium-sized Businesses in a Hemispheric Marketplace• Panelists will discuss the importance
of smalland medium
sized enterprises (SMEs) to the process of job creation and hemispheric integration Discussion
examine impediments to conducting 1:miJ:as for SMEs and will identify potential solutions that could be implementes
the Free Trade Area of the .Americas.
through

Panel 1: "Generating Growth in the Small and Medium-Siad Business Sector Cultivating Job Creation and
Competitiveness

Moderator:Luis de Ja Calle. Director , NAFTAOffice, Embassy of Mexico

Panelists: Leonardo Pizani, Executive Director , Foundation for Sustainable Development Venezuela
Hon . Cassandra Pulley, Deputy Administrator Small Business Administration
Jose Camillo dos Santos Representative Small Business Association of Brazil, Brazil
David C . Lizarraga Preside:lt & CEO, Telacu USA
Hon. Kenneth Valley, Minister of Trade Trinidad and Tobago

P2n:li: Hemispheric
Integration Removing Export lmpediments for Small and Medium-Sized Businns •

Moderator: Thomas E. Ritter, Pre!idem, Inter ContinentalBusiness Associalcs, USA

Panelists: Joyce Higgins de Ginnata Presidenl, Chamber of Small Industries Ecuador


Michael Clark. President. AtlanticPacific Technologies. USA
Martin Duggan. Executive Director, Small Business Association USA E
Hon. Lauri Fitz Pegado Assistant Secretary and Director General of the U.S. Commercial Service, U.S.
Departmeot of Comniace, USA
Norman Garcia, President fOW)(iarion for Investment and Export Development Honduras

159
IV. "Toward a Hemispheric Information ftfarketplace" Toe Summit of the Americas affirmed that a country's
information infrastructure is essential to political, economic, social and cuJrural development. This panel will discuss
issues critical to companiesthat will provide !he enlertainment, educational. and information produces that help integrate
the Hemisphere and that will be pan of the Hemispheric marketplace. Discussion will focus on how procecting intellectual
property and assuring open access to information networks will contribute to creating a Hemispheric marketplace .

Moderator : Hon . Bruce Lehman, Assistanc Secretary of Commerce and Commissioner of Patents and Trademarks

Panel t : •Protection of IntellectualPropertyin the informarionMarket place•

Co-Chairs : Hon. Ronald H. Brown, U .S . Secretary of Commerce, USA


Antonio Mille, President, Instituto Latino de Alta Technologia Informatica y Der echo, Ar gentina

Panelists: Jose Antonio Rios, President and CEO, Galaxy Latin America, USA
Carmen Quintanilla, Director General, Derecbo de Aucor, Mexico
Al Teller, Chairman, MCA Music Entertainment Group , MCA INC, USA
Kenneth Wasch, Executive Director, Software Publishers Assn . , USA
Jose Maria Fernandez Unsain, President, General Society of Mexican Writers , Mexico

Panel 2: "Open Access to the InformalionMarkerplace #

Co-Chair: Jack Valenti, President , Motion Picture Assn . of America, USA

Panelists: Jason A . Berman, Chairman and CEO , Recording Industry Assn . of America. USA
Gustavo Cisneros, Presidenc and CEO, Cisneros Group of Companies, USA
Alberto Pecegueiro, Direccor General , Globosat , Brazil

V. "Private Sector Financing: lnfrastrocture and Privatization" Recognizing that physical infrastructure
development is critical to greater commercial integration, panelists will focus on ways to finance Hemi spher ic
infrastructure projects, and the privatization of state-owned infrastructure enterprises . A two-part discussion will
emphasize the need for private financing as a vehicle for relieving governments• burden for infrastructure fundi ng and
the role of governments in accelerating the shift from public to private sponsorship and risk bearing .

Panel 1: "The Role of Governmentsin AttractingPrivate Capitalto Infrastructure Financing"

Moderator : Rita Rodriguez , Director, Export -Import Bank of the United States

Panelists : H .E . Marie Michelle Rey, Minister of Finance and Economy, Haiti


H .E. Ubaldo Scavone , Minister of Industry and Commerce , Uruguay
Alfredo Volio, Board of Directors, Banco Nacional de Costa Rica, Costa Rica
Carlos Sanchez, Secretary for Trade and Investment, Ministry of Economy , Argentina

Panel 2: "The Role of Private Financingin lnfrastrucrureProjects #

Moderator : Enrique Iglesias, President , Inter-American Development Banlc

Panelists : Roger Dorf, President, AT&T Network Systems , USA


Ashoka Mody , Principal Financial Economist , Toe World Bank
Darin P . Narayana, Executive Vice President, Norwest Bank International, USA
Armando Castelar, . Director, National Bank for Social and Economic Development, Brazil

160
VI. PreparingOur
ourWorkforce for the Age of Comme~cialIntegration and Hemispheric Free Trade " Focus
workplace issues such as labor-management cooperation, worker skills, and labor standards to develop a more
Poductive workforce and ensure that the benefits of economic integration are widely disseminated.

Moderator: Hon. Joaquin Otero, Deputy Under Secretary for International Labor Affairs, U .S . Department of Labor

Panel 1:"Skills Demanded by the Economy of the Future "

panelists: Luis Anderson, General Secretary, Inter-American Regiona l Organization of Workers/lnternational


Confederation of Free Trade Unions (ORIT/CFTIJ)
H.E. Jorge Arrate Mac Niven, Minister of Labor and Social Welfare, Chile
Jorge Eduardo Manoso, Professor, Centro de Estudios Sindicais e de Economia do Trabalho/Universitara
de Campinas (CESET)/(UNICAMP), Brazil
Jose Antonio Guzman, President, Confederaci6n de Producci6n y del Comercio, Chile

Parel2: "Roleof Workplace Practices in Ensuring that the Benefits of Economic Integration are Widely Disseminated"

Panelists: William Doherty, Director, American Institute for Free Labor Development, USA
Hon . Edmundo Gonzales, Deputy Assistant Secretary for the American Workplace,
U .S. Department of Labor, USA
Beatrice Rangel Mantilla, Vice President, Corporate Strategie s, Cisneros Group of Companies, Venezuela
John Scully, Colorado Vice President, US West Communications, USA

6:30 P.M. SHUTILE BUSES DEPART ALL HOTELS FOR RECEPTION

7:00P.M. RECEPTION (HOST COMMITTEE) LocATION: DENVER MUSEUM OF ART

Sunday, July 2, 1995

8:00 a.m. Breakfast Location: Colorado Convention Center Ballroom

8:30 - Plenary Session Location: Colorado Convention Center Ballroom


9:30 a.m. "The Evolution of Integration: Bringing Regional Agreements Together"
Themes : The deepening and widening of various trade arrangements in the hemisphere and achieving
the FT AA by 2005.

Moderator: H.E. Alvaro Garcia, Minister of Economy, Chile

Panelists: H.E. Cesar Gaviria , Secretary General , Organization of American States


H.E. Dorothea Werneck, Minister of Industry, Commerce and Tourism, Brazil
Carlos Sanchez, Secretary for Trade and Investment, Ministry of Economy, Argentina

9:30 a.m. _ Sectoral Workshops Location : Colorado Convention Center Meeting Rooms
10:45 a.m. Sectoral workshops meet again to review reports from pnor day s sessions and prepare private sector
recommendations to be forwarded to the trade ministers for their review .

10:45a.m. _ Presentation of Conclusions Location : Colorado Convention Center Ballroom


11:30 a.m.

Moderator: H on. D av1'd R o op , us Deputy Under . Secretary of Commerce


Sectoral Panel Moderators/Representatives

161
11:30 - Clos.ing Plenary Location : Colorado Convention Center Ballroom
12!30 p.m . "Toward a Free Trade Area of the Americas"
Themes: Speakers will discuss perspectives on the future of the hemisphere and integration and how
the private sector can assist in the process from Denver to the creation of the Free Trade Area.

Chair : Hon. Ronald H. Brown, U.S. Secretary of Commerce

Moderator : Hon. David Rothkopf, U.S . Deputy Under Secretary of Commerce

Panelists : Stephen Chesebro', President and CEO, Tenneco Gas. USA


Manuel Feliu, President, Consejo Empresario de America Latina (CEAL). Chile
Juan Gallardo, Coordinator. Coordinadora de Organizaciones Empresariales de Comercio Exterior
(COECE). 1exico
Kevin . McGrath, President and CEO. Hughes Communications, USA

Concluding Remarks

Hoo . Patricia Schroeder. U.S. House of Representatives


Hon. Ronald H. Brown, U.S . Secretary of Commerce

162
NATIONAL FORUMS FOR FTAA-2005

Toe Hemispheric Trade and Commerce Forum brings together over 1ooocorporate and financial executives
from around the hemisphere. The Forum provides an opportunity for dialogue between private sector leaders
and senior government officials as well as facilitating networking among business leaders from around the
Hemisphere. Because the first Forum meeting in Denver was so successful, a second Forum is scheduled to
be held congruent with the trade ministerial in Colombia in March , 1996, as a major step toward making the
Forum a standing institution .

In Denver several participants proposed that the success of the Hemispheric Forum be replicated throughout
rhe Hemisphere at the national level. Private-sector leaders who attended the fust Hemispheric Forum could
transfer the "spirit of Denver" to their home countries and form the core group around which to structure
national forums consisting of a wider group of corporate and financial leaders . National forums would serve
to:

- Facilitate dialogue between the private and public sector on Ff AA-related negotiations and other
pertinent issues;

Focus national attention on the goal of attaining the Free Trade Area of the Americas by 2005 ;

Stimulate exchanges among executives across economic sectors and help to create a national
consensus on hemispheric trade;

Better prepare national delegations to future trade ministerial and Hemispheric Trade and
Commerce Forums .

Meetings of the Hemispheric Forum will provide opportunities for regular exchanges among representative
from national forums, to allow for a sharing of experiences and "best practices " and to facilitate any
coordination of activities that was deemed to be mutually beneficial.

163
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