THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, December 15, 1994 TAG: 9412150022
SECTION: FRONT PAGE: A26 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 56 lines
Summits once involved military superpowers, trying to preserve the peace. Today, they largely involve trading partners, trying to increase prosperity.
The first hemispheric summit in 27 years concluded Sunday in Miami - the de facto capital of Latin America, a city where 40 percent of jobs involve trade.
The summit agreed to establish a hemispherewide free trade zone by 2005. It began the process that will make Chile the next country to join Canada, the United States and Mexico in Nafta. Chile has led the way in adopting democratic capitalism. It's achieved 6 percent annual growth for a decade by lowering tariffs and competing vigorously.
To expand Nafta, the Clinton administration will need Republican help. And the issue could test Republican commitment to free trade since important constituents will oppose the measure. Republicans are also loath to give Clinton the the fast track authority needed to pass such treaties.
The summit also agreed to study how to integrate the region's several existing trade groups under a single umbrella. These include the Mercosur group, the Andean group, the Central American Common Market and the Caribbean Community. Opening trade throughout the Americas would create the largest market in the world - 850 million people and $13 trillion in purchasing power.
The summit agreed to use the case of Chile to establish standards for admission to an expanding free trade zone. Economic criteria will be essential, but also a record of political stability and a commitment to democratic rule.
In addition, the summit made a commitment to integrate capital markets throughout the hemisphere. Many believe this is almost as important as free trade because economic development relies on the flow of capital across borders.
At the same time, participants agreed to steps intended to make drug trafficking less profitable by making it more difficult to launder money through the region's banking establishments.
Finally, Latin America has long been ignored or patronized by the United States, in part because Cold War blinders imposed an East-West view of matters. Now, Latin America has become too big to ignore and too economically dynamic to patronize.
There are big opportunities in the region, but big problems too. The summit took note of the fact that half of the hemisphere's population still lives in poverty and vowed to address problems like infant mortality and limited availability of education.
This summit was a first step in creating a long term working relationship for the countries of the region. It is safe to say the next hemispheric summit won't be another 27 years in coming. by CNB