Discussions for an FTAA date back to 1994. In 1997, heads of state from the Summit of the Americas in Bel Horizonte confirmed that negotiations for a Free Trade Area of the Americas would begin in 1998 and defined the nine negotiating groups.

Background of Free Trade Area of Americas

U.S. officials speaking in advance of the April 20-22 Summit of the Americas taking place in Quebec City have highlighted the acceleration in the growth of trade between the United States and its North Americans Free Trade Agreement (NAFTA) partners Canada and Mexico since they concluded their free trade agreement in 1994. President Bush, discussing the benefits of NAFTA in a statement before leaving Washington April 20 for Quebec City and he thought that NAFTA has created more choices at lower prices for consumers in all three of our nations, and it has created good jobs for our workers.

U.S. Trade Representative Robert Zoellick, briefing at the White House April 19, said that between 1993 and 2000 U.S. exports to Canada and Mexico rose 104 percent, while exports with the rest of the world advanced at half that rate.

That kind of performance has inspired hope among backers of the proposed Free Trade Area of the Americas that the FTAA will lead to comparable growth in U.S. trade with the rest of the Western Hemisphere. The leaders of the 34 Western Hemisphere democracies meeting at this year's Summit are scheduled to review as a basis for further negotiation the draft FTAA agreement worked out by their trade ministers in Buenos Aires earlier in the month.

For purposes of trade with the United States, Canada and Mexico of course have the advantage of their proximity, which makes it almost inevitable that there would be large trade flows across the northern and southern U.S. borders. And in fact Canada and Mexico are the two largest U.S. trading partners -- Mexico moving into second place last year.

Currently, U.S. exports to the NAFTA partners are about four times as great as exports to the rest of the hemisphere, and imports from the NAFTA partners five and a half times as great. But given the magnitude of trade among the NAFTA partners, that means that trade with the rest of the hemisphere is still substantial.

In 1999, the U.S. export total to the rest of the hemisphere was $64,000 million and the import total was $59,000 million. Trade at such levels is important for the United States, and it is even more significant for the smaller economies shipping goods to the United States. And that level of trade existing already is one of the factors encouraging the belief among FTAA supporters that the potential gains in trade from hemisphere-wide trade liberalization are great.

In comments April 17 at the Organization of American States headquarters in Washington, Bush noted that implementation of the FTAA agreement would create the largest free trade area in the world, encompassing 34 countries and 800 million people.

Criteria of Consideration in the Free Trade Area of Americas

In fact, the Free Trade Area of Americas is including the main criteria of content such as, agriculture, investment and government procurement.

Agriculture

The preferences applied to trade between the Parties, together with the tariff reduction or elimination programs agreed to in bilateral or subregional agreements, shall remain in effect so long as the preferences agreed to under those agreements are greater than those resulting from the tariff elimination.

The Parties agree to eliminate tariffs from trade between them in originating goods, following the Tariff Liberalization Program established in Annex .The percentage preferential margins shall apply to the tariffs in effect at the time the goods are shipped to the market for consumption. The preferential margin applicable to originating goods as a result of new tariff openings, shall not be lower than those applicable to the original tariff item.

During the tariff elimination process, the parties agree to apply to originating goods traded among them the lesser of either the tariff established under the tariff reduction program. The parties may maintain or increase a tariff when this is permitted pursuant to a dispute settlement provision of the World Trade Organization (WTO) Agreement, or any other agreement negotiated in accordance with the WTO.

Investment

This agreement of free area shall apply to investments admitted into the territory of a Party in accordance with national laws and regulations after the entry into force of this agreement. This Agreement shall not apply to investments made with capital or assets of illicit origin, nor shall it be construed as preventing Parties from adopting or maintaining measures aimed at preserving public order.

Parties may exclude investment in certain sectors from the provisions of this agreement. Smaller economies will be specifically facilitated in this regard. A Party has the right to perform exclusively the economic activities set out in Annex and to refuse to authorize the establishment of investment in such activities.

Nothing shall be construed to prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income or unemployment insurance or social security services, social welfare, public education, public training, health, and child car. Regarding the most favored nation treatment, investors of another Party's treatment will not be less favorable than other most favor nations.

Government Procurement

The purpose of government procurement is to create and maintain a market in order to maximize the investment opportunities. In order to attain this goal, each Party shall guarantee that it is desirable to establish: the principles of non-discrimination, transparency, legality, impersonality, morality, equality and free competition.

In order to apply the measures relating to government procurement in such a way as to allow the highest possible degree of competition which is appropriate to the circumstances, respecting the principles of transparency and nondiscrimination.

Each member countries also promote business opportunities so that the suppliers compete in government procurements preferably on the basis of principles, such as quality-price ratio as long as the application of this principle is compatible with the nature of the procurement in question. The application of this principle is aimed at obtaining the most efficient results with the financial resources allocated to the entities that carry out the procurement, taking into account the public needs of these entities.

The foreseeable effects of Free Trade Area of America

Some people may argue that essential Social services will be endangered. Comparing with the World Trade Organization's General Agreement on Trade in Services (GATS), the FTAA will include commitments to liberalize trade in services such as education, health care, environmental services and possible effects of the FTAA agreement on services can be understood as follow: Removal of national licensing standards for medical, legal and other key professionals, allowing doctors licensed in one country to practice in any country, even if their level of training is different and some people may regard this is not a good effect at all and will maintain a great difference in standard of professional services. However, other may reckon that the free movement of professional can enhance the transfer of services and help to enhance the quality of services at the same time.

Some people do not support the privatization of public schools and prisons. Privatization of public schools and prisons, like in the U.S. which would open the door to greater corporate control, corruption and the cutting of critical corners to increase profits; and privatization of postal services by transferring U.S. Postal Service functions to a few delivery companies like FedEx, which could then send postal rates through the roof.