A home from the hemisphere

Port of Spain is hoping to be chosen this year as the headquarters for the Free Trade Area of the Americas, the new trading bloc that will stretch from Alaska to Patagonia. Richard Costas weighs the city's chances

The Free Trade Area of the Americas (FTAA), potentially the world’s largest trade bloc, will need a home of its own if it becomes a reality.
Deciding where to locate the headquarters of this 34-member group, stretching from Canada in the north to Argentina in the south, will be no easy matter, but the bids are all in — and the lobbying continues. Eleven cities in the Americas are vying for the privilege of hosting the FTAA permanent secretariat. Of these, six are in the US: Atlanta, Georgia; Chicago, Illinois; Colorado Springs, Colorado; Galveston and Houston, both in Texas, and Miami, Florida.

Three cities in two Latin American countries, Cancun and Puebla in Mexico, and Panama City in Panama, hope to host the FTAA’s administrative and political powerhouse. In the Caribbean, San Juan, in Puerto Rico, a freely associated dependency of the US, has put in its bid. So has Port of Spain, the capital of the region’s energy and manufacturing giant, Trinidad and Tobago — one of the Caribbean’s most prosperous and entrepreneurial nations.

Opinions vary as to which of the bidders will win, depending on who you ask, but the consensus seems to be that Miami and Port of Spain are the two candidate cities most likely to succeed.

The many millions of dollars that the 11 contenders have spent in making their cases highlight the value of the prize. As far as trade is concerned, the FTAA secretariat will be the administrative, diplomatic, and political hub of the hemisphere. Just as becoming the EU capital made Brussels a prosperous city, and the preferred European location for many international bodies, multinational companies, lobbyists, and lawyers, so the FTAA secretariat will change the face and boost the economy of the city in which it is located.

A 2003 study by Enterprise Florida and Florida FTAA Inc shows that if Miami were the winner, the US state could expect as many as 89,259 extra jobs, an average annual boost to the state’s payroll of US$3.2 billion, a yearly US$13.6 billion increase in the state’s domestic product, and a US$157 million rise in annual tax receipts. While the exact figures would differ for the other contestants, the effect would be much the same: increased economic activity and tax revenues, new jobs, and greater hemispheric clout.

However, the candidate cities have had to show they can meet the stringent criteria set out in November 2003 by the FTAA’s Trade Negotiating Committee (TNC). They must show they have first-rate air and ground transport infrastructures, enough hotel accommodation, a first-class telecommunications infrastructure, a trustworthy security system, sufficient human resources, and a good quality of life. The contestants must also declare what diplomatic missions they already host, address migration issues, and outline the financial and other resources they will provide to keep the secretariat running.

The TNC seems to see air transport as particularly important, and even asks each candidate for detailed information on the fares and the number of flights to all the other 33 capital cities in the FTAA. It will be difficult to beat Miami as regards transportation links and infrastructure. In terms of geography, both Panama City and Port of Spain are almost at the centre of the American continent. Miami is approximately 1,000 kilometres north of centre, but has enormous advantages — it is already a hub for intra-hemispheric air travel, and plays a major part in hemispheric trade.

But politics always affect facts — and the same will be true of the FTAA secretariat. Language, culture, mutual suspicion, ideological differences, and old alliances will all play a role in shaping the final outcome. Miami is favoured by some nations, but others are unhappy with the idea of a secretariat located in the US, giving the hemisphere’s economic giant even greater advantages. Port of Spain comes out better, because many smaller states would prefer the headquarters to be in a similarly small state. Trinidad and Tobago already has the backing of its 14 partners in the Caribbean Community, and has the advantage of being English-speaking; English is the first language of global trade.

Yet others argue that, given the fact that Spanish is the mother tongue of millions of people in the Americas, Panama or another Spanish-speaking country would be preferable. The two-language problem causes others to support Miami, multi-ethnic home of people from all over the Americas. It is English-speaking, but with a huge number of Spanish speakers, enabling it to operate comfortably in both languages. Then again, Brazil, with a Portuguese-speaking population of 174 million people (about 21 per cent of the FTAA total) might feel none of these locations is perfect on the basis of language.

From the point of view of the average human being — and in spite of everything, bureaucrats, politicians, and big businessmen are human beings — we might safely assume that leisure and shopping facilities, a warm climate, and maybe even good beaches will have some influence, however unofficial, on the final decision.

After all, the hemisphere has to have a home somewhere — so it may as well be in a pleasant neighbourhood.

Birth of a trade giant

The Free Trade Area of the Americas (FTAA), an economic grouping comprising all the independent nations in the Americas, with the exception of Cuba, is due to come into being in January 2005.

The most important economic blocs in the world at present are the European Union (EU), with 25 members and a population of 455 million people, and the North America Free Trade Agreement (NAFTA), with three members (Canada, Mexico, and the US) and a population of approximately 418 million. The FTAA’s 34 member states will dwarf both of these with a population of approximately 825 million people, although 285 million of these (a little more than 34 per cent of the FTAA total) live in the US.

The FTAA was first mooted in 1994, at the First Summit of the Americas, a meeting of all the Western Hemisphere’s heads of state, and despite many difficulties, setbacks, and steady opposition by anti-free-trade groups, negotiations are continuing. Proponents of the FTAA believe it will mean lower prices, higher exports — because of the establishment of what in effect will be a huge “domestic market” for its members — and higher standards of living for people in the hemisphere’s smaller and poorer countries.

One of the difficulties, however, is that the FTAA will include economies of very different sizes and types. The economies of the hemisphere’s smallest nations, like most of those in the Caribbean, for instance, are heavily dependent on a single sector, such as tourism or agriculture. Agriculture is also the main economic activity in some Latin American countries — Paraguay and Guatemala, for example. Others countries, such as Brazil and Argentina, have relatively diversified economies with large industrial sectors. The US, of course, is the world’s economic behemoth; figures suggest it will account for some 75 to 80 per cent of the FTAA’s total gross domestic product.

The smaller nations have been lobbying for “special and preferential” treatment in the FTAA — as they have in the ongoing World Trade Organisation negotiations — because they fear their industry and agriculture will be wiped out when faced with competition from much larger economies. Agriculture is an area of particular concern to many smaller nations, because of the large subsidies the US gives to its farmers. The advantage this gives them makes it particularly difficult for farmers in poorer countries to match US prices. Even some of the larger prospective member states, notably Brazil, Venezuela, Argentina, and Peru, have voiced doubts about aspects of the FTAA, and about free trade more generally.

There is little doubt that the FTAA will come into being, but what the “final” agreement will look like is almost anybody’s guess. The baby will come into the world, perhaps kicking and screaming, but babyhood will only be the beginning of a continuing process of growth and change.