Introduction – the FTAA

In 1994, the leaders of 34 American nations established the Free Trade Area of the Americas (FTAA), an organization that today involves some 800 million people and a combined gross domestic product of more than US$13 billion. Given the historical and cultural differences among its members, especially where industrial relations are concerned, the FTAA's achievements have been monumental. Over the last decade, Latin America has curbed inflation, decreased import tariffs and, as a result, has stimulated its economic growth. Unfortunately, however, the FTAA's economic and social shortcomings are as salient as its accomplishments. With the organization's final phase of negotiations nearing their end, poverty and inequality still remain widespread throughout Latin America. Moreover, despite the FTAA's important objective of ensuring fair international trade, the diversity and, at some points, incompatibility of domestic labour laws and policies have only been marginally addressed during the FTAA negotiations. Consequently, many Latin Americans now question the wisdom of increasing competition with more efficient economies, particularly those of the United States and Canada.

Economic advantages and disadvantages of the FTAA

From an economic perspective, Latin America's continued participation in the FTAA has both benefits and burdens. On the one hand, membership in the FTAA would not only allow Latin American countries to explore current technology and refined business practices, but would also afford them the opportunity to purchase industrial inputs at a lower price.