MercoPress. South Atlantic News Agency

Expanding regional trade

The creation of the Americas Free Trade Association, AFTA, will boost economic growth in Latinamerica and should be accepted as part of a necessary process towards a more open continental trade.

Interamerican Development Bank, (IDB), president, Mr. Enrique Iglesias talking in Sao Paulo, Brazil, said that Latinamerica is the second most important United States trade partner and "this reality would become even stronger with AFTA, which is scheduled to begin in 2005".

Mr. Iglesias insisted this all Americas integration process can be complemented with other free trade initiatives such as the current Mercosur European Union discussions. The words of the president of the strongest multilateral Latinamerican financial institution come at a particularly tense moment since Brazil is having second thoughts about the April all Americas Quebec presidential summit when AFTA is supposed to take off, after laying dormant several years under the Clinton administration.

Brazil favors engaging continental trade negotiations from a strong Mercosur block, not in a country to country basis, and is demanding that agriculture and subsidies be considered in the agenda before tariff reductions as apparently is the Bush administration's target."It's an unfair competition, because our agriculture competitiveness can't compete with the fiscal capacity of rich countries, as is currently happening", stressed Mr. Iglesias. However, the banker pointed out that integration of the world economy is "irreversible". Brazil and Untied States also differ regarding AFTA's timetable: while US wants to advance the original target of 2005 to 2003, Brazil insists in changing the agenda's priority and leaving 2005.