A Plan B for Deepening Economic Ties in the Americas

(Marcela Sanchez — Washington Post)

It has been a frustrating start of the century for those promoting economic integration of the Americas. The hemisphere seems more ideologically divided than at any time since the Cold War, putting off any hopes of reviving the idea of a Free Trade Area of the Americas, snuffed out two and half years ago in Argentina when regional leaders spent more time emphasizing their differences than anything they had in common.

Those who see a free trade agreement as a way to promote growth, reduce disparity and increase competitiveness are asking themselves what to do next. More specifically, they wonder what can be achieved at the Summit of the Americas to be held in early 2009, when a new U.S. president is expected to attend.

It may be time to try Plan B. Nancy Lee, former deputy assistant secretary for the Western Hemisphere at the Treasury Department, contends that rather than striving for an all-encompassing trade agreement, the region should get more of its fundamentals in order and pursue a narrower goal. In a chapter for the forthcoming book “The White House and the World: A Global Development Agenda for the Next U.S. President,” to be published by the Washington-based Center for Global Development, Lee proposes a regional agreement to improve the hemisphere’s investment climate.

Such an agreement would establish standards for doing business in the Americas, a region where many countries are far behind the average global standard. It would aim, for instance, to reduce burdens on private entrepreneurs by simplifying processes to start up a business, pay taxes, clear customs and access credit.

A hemisphere-wide agreement, Lee argues, both would increase investment and boost growth. It would spread economic benefits to areas and populations so far neglected, especially by permitting “small businesses trapped in the informal sector (to) shift to the more productive formal sector.” Read the complete article.