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State's Wayne Hails Economic Growth in Latin America

Assistant secretary says region is at "critical juncture" on trade liberalization

Posted: December 9, 2005

U.S. State Department's assistant secretary for economic and business affairs E. Anthony Wayne. (State Department file photo)Miami -- Rapid economic growth in Latin America has helped some 13 million people in the region escape poverty in 2004 and 2005, says E. Anthony Wayne, the U.S. State Department's assistant secretary for economic and business affairs.

Speaking December 7 at the Miami Conference on the Caribbean Basin, Wayne said Latin America hit a 24-year high in 2004 of 5.6 percent annual growth in its gross domestic product. Latin America is on track to have higher than average growth in 2005 of 4 percent, while the forecast for growth in 2006 is 3.75 percent, Wayne said.

But, on the downside, he added that over 200 million people in Latin America remain mired in poverty.

Wayne called open trade and "investment regimes" the key to achieving sustained economic growth, saying the United States’ economic relations with its partners in Latin America and the Caribbean "have a sound basis in trade and investment." U.S. trade with those partners, he said, totaled $427 billion in 2004, and U.S. investment in that region increased by about $22 billion in 2004, to a total of $325 billion.

The official said the Caribbean Basin is at a "particularly critical juncture" regarding trade liberalization, with global negotiations on free trade likely to reach "key decision points" at a December 13-18 ministerial meeting of the World Trade Organization (WTO Hong Kong Ministerial Meeting).

Wayne said a successful meeting of the Doha round of multilateral trade talks "has the potential to pull tens of millions of people out of poverty." A successful Doha round, he continued, "could be the biggest economic change of our generation, extending the benefits of free trade to the poorest countries and to the poorest populations."

The Doha round of WTO trade talks, formally known as the Doha Development Agenda, is aimed at creating market access opportunities and reform in agriculture and expanding opportunities for manufactured goods and services.

Wayne said that in addition to its efforts to conclude a global multilateral trade agreement, the Bush administration continues to pursue an "active trade agenda" with regional, subregional, and bilateral free-trade agreements in the Western Hemisphere.

Regarding the proposed Free Trade Area of the Americas, Wayne said 29 of the 34 democratic nations in the hemisphere support moving forward with that trade pact, even though "some partners have not been ready to proceed." Meanwhile, he said the United States is making "significant progress" to conclude subregional and bilateral free-trade agreements with such countries as Panama, Colombia and Ecuador. Wayne also hailed the December 7 announcement that the United States and Peru had reached agreement that day on a free-trade pact.

If the United States can reach free-trade pacts with its partners in the hemisphere, said Wayne, it will signal to investors that the countries of the Americas are committed to global trade and investment rules." The free-trade pacts, he said, can help "accelerate diversification of our trading partners' exports, creating new opportunities and reducing vulnerability stemming from dependence on a few traditional exports which face increasing erosion of trade preferences in the global economy."

Wayne cited increased trade between the United States and Mexico as a "concrete example" of the benefits of trade liberalization. Trade between the two countriesmore than tripled from $81 billion in 1993 to $267 billion in 2004, following the 1994 enactment of the North American Free Trade Agreement among the United States, Mexico and Canada, he said.

The assistant secretary said debt relief, which the United States advocates "when appropriate," is another tool to help develop the poorest countries in the Caribbean Basin and elsewhere in the world.

The United States, he said, strongly supports multilateral debt relief for the world's "heavily indebted poor countries." Wayne said the Bush administration hopes for 2006 implementation of a U.S.-backed proposal by the Group of Eight nations to give $40 billion in debt forgiveness to 18 of the world's most heavily indebted poor countries. Latin American beneficiaries of that proposal would include Bolivia, Guyana, El Salvador and Honduras. Haiti is another country that could eventually benefit from the proposal, said Wayne.

Remittances (money transfers) are another increasingly important source of funds for the Caribbean Basin's development, Wayne said. In 2004, an estimated $30 billion of the over $40 billion in private remittances sent to Latin America and the Caribbean countries came from the United States, Wayne said. He added that the U.S. government continues to support efforts to reduce remittance transaction costs.

All these initiatives, Wayne indicated, have helped lower the number of people in the Caribbean Basin who live in poverty. But more people in Central America and the Caribbean, he said, must share in the economic growth of the last several years "if we are to achieve the enduring prosperity and security" that the citizens of the region "expect and deserve."

For additional information on U.S. policy, see Regional Trade.

Eric Green
Washington File Staff Writer




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