Does the FTAA have a future?

International Institute of Economics
Washington DC
October 2005

Paper
Does the FTAA Have a Future?
Jeffrey J. Schott

The Free Trade Area of the Americas (FTAA) will become a reality only if the United States allows increased market access for Brazilian agriculture and competitive manufactures and if Brazil reciprocates by opening its market to foreign competition in goods and services. In both cases, prospective liberalization is contentious and subject to a fractious domestic debate. Unfortunately, support for the FTAA within the United States has ebbed: Congress is distracted by the war on terror, Iraq, hurricane relief, and Supreme Court nominees, and members repel at the thought of another trade vote akin to the Central American Free Trade Agreement anytime soon. US companies are focusing their efforts on the Doha Round and on specific bilateral free trade agreements, where they expect a more immediate payoff than from the FTAA. If Brazil and the United States do not succeed in bridging their differences, then the FTAA negotiations will either continue to drift or devolve into an Asian-style "FTAA-lite." Either way, US trade policy will focus elsewhere.

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