US FY 1999 Congressional Presentation

Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
ACTIVITY DATA SHEET

PROGRAM: LAC REGIONAL
TITLE AND NUMBER: Progress Toward Resolving Key Market Issues Impeding Environmentally-Sound and Equitable Free Trade in the Hemisphere, 598-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $3,680,000 DA; $700,000 ESF
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2000

Purpose: To resolve key market issues impeding environmentally-sound and equitable-free trade in the Western Hemisphere. This LAC Regional program responds to the 1994 Summit of the Americas' initiatives to establish the Free Trade Area of the Americas, to foster Hemispheric economic integration and trade, and to support economic prosperity and environmentally sustainable development.

USAID Role and Achievements to Date: The Hemispheric Free Trade Expansion (HFTE) program supports trade-induced economic expansion as a catalyst for reducing poverty and sustaining economic growth and political stability in the LAC region. USAID collaborates closely with the Office of the U.S. Trade Representative (USTR) and USG agencies that participate on the Interagency Trade Policy Staff Committee, while closely monitoring the reports of the Hemispheric Working Groups that meet on Free Trade Area of the Americas (FTAA) issues and process. USAID works closely with the USTR, USG agencies, and other HFTE partners to assist the LAC smaller-economy countries and subregional trading blocs (e.g., Andean Pact, Central American Common Market-CACM, Caribbean Community-CARICOM, South American Common Market-MERCOSUR, and G-3 (Mexico, Colombia and Venezuela)) to access technical assistance to facilitate reforms in key trade disciplines. HFTE initiatives in trade liberalization are complemented by support for interventions which advance trade-related labor/management relations, market participation, and environmental management.

An important achievement under trade liberalization was the negotiation and start-up of a Memorandum of Understanding for Caribbean Economic Diversification in response to the President's Caribbean initiative. Specifically an assessment of Sanitary and Phytosanitary Barriers to Trade for the Americas was completed and serves as the basis for the design of a comprehensive U.S.-Caribbean Food Safety program. Additionally, a plan of work to guide joint U.S.-CARICOM analysis of Caribbean agricultural competitiveness in support of its regional agricultural negotiations was completed. Other accomplishments include the completion of a series of hemispheric-wide workshops on customs reform, competition policy and statistical accounting for trade in services completed by our U.S. government partners. Related to trade and labor/management relations, a new trilateral system of interest-based negotiations between sub-national entities of labor, management and government in contrast to traditional national level collective bargaining was introduced in the Andean Pact region. For the MERCOSUR region, a Labor Inspectors Manual to guide labor standards enforcement was completed. For the CACM, a workforce development study was completed and distributed throughout the region to assist with trade-induced workforce retraining requirements. Trade and market participation efforts were directed to foster improved micro, small and medium-sized producer and enterprise access to capital, technical and property markets.

Progress in microenterprise lending through ACCION affiliates in 11 countries to link NGOs to bank credit was achieved. Market integration was enhanced with the establishment of an Internet website serving as a clearinghouse for digitized spatial data and with the establishment of an electronic agribusiness network (AgroInfo Americas) to link partners, customers, and beneficiaries. Progress on property rights for indigenous groups to facilitate their participation in the trade in the extractive industries was furthered with the successful introduction of a participation model which includes a modern mapping technology based system to clarify land rights complemented by an interest-based negotiation process between the indigenous population and the concessionaire codified by government. In trade and the environment, several important initiatives were sponsored including the first comprehensive analysis of LAC trade and environmental issues; hemispheric meetings and analysis on
private sector investment in sustainable forestry; a model program developed for "greening" the tourism hotel industry; and a regional clean mining initiative.

Description: In FY 1999, with HFTE DA and Windward Islands Development ProjectSee footnote 1 ESF funding, USAID will continue to focus on: (1) trade liberalization--strengthen the capability of LAC countries to implement trade discipline reforms consistent with country obligations for World Trade Organization (WTO) and FTAA membership; (2) trade and labor/management relations--foster the adoption of improved trade-related labor and management practices through support for democratic free labor movements and modern labor-management relations; (3) trade and market participation--in coordination with the Santiago Summit of the Americas, support an expanded initiative to accelerate micro, small and medium-sized producer and enterprise access to key productive resources, specifically, capital through microenterprise lending programs and property through property titling programs; and (4) trade and the environment--develop and disseminate replicable models integrating policy, technology and investment considerations (e.g., improved standards, regulations, financing mechanisms, market-based incentives and management practices) for clean mining, clean food processing, clean tanneries, sustainable shrimp aquaculture, sustainable forestry, and sustainable tourism.

Host Country and Other Donors: The HFTE program is working with the IDB to support economic growth and trade initiatives, and World Bank to support environmental initiatives in support of the 1994 Summit of the Americas and Bolivia Summit on Sustainable Development. In FY 1999, donor coordination will be expanded to include the FTAA Tripartite Committee--the IDB, OAS Trade Unit, and Economic Commission for Latin America and the Caribbean (ECLAC) to foster improved donor coordination on strengthening the capacity of the Hemisphere's trade policy education infrastructure to play a constructive educational role vis-a-vis civil society. As HFTE builds a stronger partnership with other donors, USAID will begin to leverage other donor resources (e.g., allocation of IDB loan funds to support country-level investments in customs automation, targeting European Union STABEX funds to support infrastructural investments in the Eastern Caribbean Windward Islands, etc.).

Beneficiaries: The HFTE program will focus its activities primarily on the LAC smaller-economy countries, while emphasizing the equitable integration of small and medium-sized producers and enterprises into the Hemisphere's evolving socioeconomic system. LAC governments, producers, industry, NGOs, and civil society groups will all benefit.

Principal Contractors, Grantees, or Agencies: Selected U.S. partners include the State Department, USTR, Department of Agriculture, Food and Drug Administration, Federal Trade Commission, Department of Justice, Customs Service, Department of Commerce (NTIA), U.S. Geological Survey, Department of Labor, and the Federal Mediation Conciliation Service. Other partners include the National Center for Food and Agricultural Policy, Inter-American Institute for Agricultural Cooperation, Catholic University of Chile, ACCION International, World Resources Institute, Institute of the Americas, National Association of State Development Agencies, and the Environmental Law Institute.
Major Results Indicators:						Baseline	Target
Number of subregions with at least one-third of the countries
advancing toward resolving identified trade-related equity issues 	     0		2 			
(e.g., WTO consistent sanitary/phytosanitary standards).
Number of subregions with at least one-third of the countries
advancing toward resolving identified trade-related environ-		     0		2
mental issues (e.g., clean mining and industrial export sectors)
Footnote: 1 The WIDP provides technical assistance and training in agricultural diversification and rural microenterprise development to help the four Windward Island nations offset the economic and social dislocations accompanying the loss of their preferential banana market in Europe.

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