Acting Assistant Secretary
Bureau of Western Hemisphere Affairs
Remarks before the Florida Department of State's
International Days 2000 Conference
Tallahassee, Florida, February 23, 2000
The Western Hemisphere in the New Century: Challenges and Opportunities
Let me begin by noting what a pleasure it is to be back in Tallahassee. As many of you may know, I'm a proud FSU grad -- prouder than ever this year, thanks to the Seminoles' come-from behind win in the Sugar Bowl. What an excellent way for Florida to begin this new millennium.
My connection to Florida via FSU makes me proud not only of our champion Seminoles, but also of the long list of distinguished Floridians active in promoting closer ties between the U.S. and Latin America. Florida is the leader in this. Just on the official side, we can count your former governor, Buddy MacKay, now the White House Special Envoy to the Americas; Lula Rodriguez, our Deputy Assistant Secretary of State for Public Affairs; Luis Lauredo, our ambassador to the OAS; Florida's hard-working congressional delegation; Governor Bush and your dynamic Secretary of State, Katherine Harris; the honorable members of your own legislature; the mayors of the multitude of Florida cities taking part in the Sister Cities program with their Latin American counterparts; and many of you here today. The business community of your state is one of the most active in promoting trade with Latin America, and your media has distinguished itself with its coverage of that region. This International Days conference itself is an excellent example of Florida's commitment to improving regional ties.
With this record of deep, consistent involvement in Latin America, those of you here with me today -- and probably many other Floridians -- know how far Latin America has come both politically and economically in the last two decades. You -- and we in Washington -- are so used now to dealing with these nations as democracies, democracies that are making great strides toward a truly modern and globalized economy, that it almost becomes easy to forget how far Latin America has come.
To dramatize that, let's take a brief excursion into the past -- about 20 years back -- and visualize how things were in two contrasting countries at opposite ends of the region: El Salvador and Argentina. Twenty years ago, both were military dictatorships beset by civil conflict and a poor record on human rights. Both suffered from stagnant growth or no growth at all and numerous social and political upheavals.
How things have changed. Today, I'm delighted to note, both Argentina and El Salvador are stable democracies. Human rights violations are almost non-existent and the rule of law predominates. The issues hotly debated include anti-corruption measures and privatizations of parastatals. The economies of both -- though vastly different in scale -- are also, thanks to these countries' steps toward modernization, far more robust (with GDP growth about 4.5% per year through the '90s) than they were under the antiquated systems and chaotic policies of the past.
This example is repeated throughout the hemisphere, with the sadly persistent -- but certainly not inevitable -- exception of Cuba. One country after another has taken the same road as El Salvador and Argentina. All have democratically elected governments. With varying degrees of success, all have at least begun to move toward greater citizen empowerment and good government.
This is a truly remarkable achievement -- nearly unparalleled anywhere else in the world. And the most encouraging aspect of this evolution was that it was something the Latin Americans did themselves. Citizens clamored for this change, they worked for it, they made it real. Did they have help? Of course -- from a revitalized Organization of American States, from public and private sector institutions in states like Florida, and, with bipartisan support from the U.S. Government. But we realize, as I'm sure you do, that this was a Latin American triumph.
The same is true of the region's economic transition. Most of these nations are now firmly on the path of economic reform -- reform that has brought such major successes as the taming of inflation and the return of growth. Countries whose economies have become the most competitive are quickly privatizing state-owned enterprises in a transparent way, reducing trade barriers, and modernizing their regulatory regimes. Many are well-poised to achieve higher growth in 2000 and beyond. Out of the headlines, in Miami significant steps to establish the Free Trade Area of the Americas by the year 2005 are advancing, leaving us very hopeful that this hemisphere will finally enjoy a united market of 800 million people, with over $10 trillion in GDP.
Floridians, with their profound ties to Latin America, have seen as clearly as any American could the region's dramatic political and economic evolution. The questions as we enter the new millennium are two. First, will Latin America consolidate its progress and continue its growth and strengthen further its democratic institutions? And, if it does -- or if it doesn't -- what would that mean for Florida?
Let me share with you my point of view on the opportunities and challenges Latin America presents, and the policy challenges that we in the U.S. will face as we enter the new millennium. As I stated earlier, Latin America is a region where democracies prevail, but it is not irreversible. The great challenge for all Latin Americans is to compose a consensus within the body politic to move toward its vision of the future. This is not easy, as established political parties are under seige in many countries. The situation is complicated by what historian Crane Brinton (you see -- I did take my courses at FSU seriously) coined "the revolution of rising expectations"; in essence, as people become educated as to what possibilities of freedom and prosperity are open to them, as the media exposes the urban poor to what they do not have, they become more, rather than less, dissatisfied with modest or even steady improvements. They become impatient, and may be tempted to opt for more dramatic change that may put what they have gained thus far at risk. Witness Ecuador and Venezuela.
What Latin Americans see is that while democracy has many benefits, it hasn't, by itself, ended corruption, nepotism, or just plain inefficiency in government. It hasn't brought everyone a job or a bigger paycheck, nor ended the vast inequality in the distribution of wealth that most of these countries endure. The situation is further aggravated by the fact that strengthening of public institutions and government's basic services have not kept pace with these growing expectations. And so the result we are seeing in opinion polling is that most Latin Americans endorse democracy as a system, but are less than satisfied with how well democracy in their own countries delivers basic services and improves living standards. This dichotomy is most pronounced in the weaker states of Paraguay and Ecuador, but it is present in most of the region. In Venezuela and Ecuador, traditional political parties are under assault by an alienated electorate.
So what's the solution? First, Latin Americans need to accelerate reform in their own countries to strengthen the underpinnings of democracy. They need to continue to get citizens more involved and to give them a voice in strengthening civic institutions such as local government and particularly the courts. It is judicial reform where progress has been very slow. The hemisphere's private sector must play a role in this process. It is not enough for the private sector to navigate between bribes and political contributions -- they must become true stakeholders for reform. For our part, we -- the federal government, state governments such as your own, NGOs, and the business sector -- need to keep responding to requests from Latin American nations' public and private sectors for expertise and, where applicable, resources, to help strengthen their civil society. Every time any of us takes steps to help Latin America's governments and citizens promote greater honesty and ethics in government -- improve the administration of justice, provide effective and humane law enforcement, and foster greater respect for free expression -- we are helping not only them, but, in the long run, ourselves as well. Floridians more than any other group know the consequences of stability or instability in Latin America.
Now let me turn to the subject of trade and economic growth. And I'll start by mentioning some figures. In 1998, Florida's trade with the Dominican Republic alone was twice its total trade with Germany. Florida did more business with Brazil -- over $8.5 billion worth -- than with the powerhouse economies of Japan, Germany, and China combined. You traded more with Colombia than Japan, more with El Salvador than the United Kingdom or France, and more with Peru than with China. You command 40% of all U.S. merchandise trade with Latin America.
As I noted earlier, there has been enormous progress in forming more realistic economic policies and promoting modernization through privatization and other reforms. But while these measures helped tame hyperinflation and promote significant economic expansion in the region in the '90s, structural reform must continue and deepen for the region to achieve self-sustaining and broadly shared growth.
1999 saw stagnation or a downturn in some important South American economies. However, recovery has been faster than expected. We expect positive growth in 2000 for the region as a whole, as Asia and Europe recover. If that happens, that will be good news indeed for Florida exporters, who I understand suffered a significant decline in shipments to Latin America in 1999.
Florida is already a trade leader. As Latin economies recover, you can expect to profit not only from their increased prosperity but also from the coming Free Trade Area of the Americas -- initiated 5 years ago right here in your state. When the negotiations conclude in the year 2005, Florida importers and exporters will greatly benefit from the hemisphere-wide elimination of trade barriers and regularization of procedures in such areas as investment, services, and government procurement. In the interim, before FTAA is a reality, measures such as enhancements of the Caribbean Basin Initiative (CBI) can help pave the way to greater regional integration. Last year, the Senate approved trade legislation that would expand the CBI. Differences with the trade legislation approved by the House of Representatives still need to be reconciled, but we hope this can be done in the next 2 months.
Concluding trade negotiations for the FTAA will require political will -- including in the United States. As the protest and turmoil which accompanied the opening of the Seattle trade talks last year underlined, many Americans are concerned about the pace and course of global economic integration. There is no question that trade, like any economic change, can be disruptive to particular industries and even communities. But there is also no question that the benefits of trade liberalization -- in terms of increased efficiency, higher growth, more and higher-quality jobs -- far outweigh the costs. Frankly, we need to do a better job of communicating that to American producers and consumers.
The debate over "fast track" authority to negotiate the FTAA also reflects this concern. The current lack of "fast track" legislation is not a problem for FTAA negotiations at this point in the process. The Administration does not need "fast track" authority now to negotiate trade agreements. However, such authority will be essential during the final stages of these negotiations.
We need, as we proceed with FTAA, to do what we can to make sure that the needs of the poor are better addressed. Almost half live on less than $2 per day! The Latin American region has the widest income inequality in the world, a gap that the progress of the last decade has not erased. A wider gap in the disparity of incomes in Latin America could prove fatal to the survival of democracy. Citizens who feel that all democracy did was to let the rich get richer are not going to continue to support it.
Fortunately, there are steps we can take to help head this off. Hemispheric leaders not only recognize these problems but also set forth an ambitious action plan to achieve results. The 1998 Santiago Summit put special emphasis on rapidly improving the quality and accessibility of education, especially to the urban poor, to isolated rural communities, and to indigenous populations. Recent history has shown that universal, good-quality education is the single most important element of any long-term strategy in increasing economic growth, ensuring political stability, and reducing poverty.
As the Free Trade Area of the Americas becomes reality, our young people must be better prepared for future leadership roles in the fields of intra-hemispheric business, finance, trade, and sustainable development. To encourage that process, I have proposed an academic exchange project for outstanding university students in Florida and Argentina, themselves important trade partners. Preliminary response both on the Florida side -- particularly Secretary Harris -- and on the Argentine side has been confident and I am hopeful that the project will come to fruition. And finally, let me mention something that Florida's business sector can do -- probably already is doing, in fact. I hope that Florida companies active in Latin America are practicing good corporate citizenship. Recently, I was present with Secretary of State Albright when she presented an award for good corporate citizenship to Xerox of Brazil for its actions on behalf of poor and disadvantaged communities. I'm sure there are many such examples among Florida companies invested in this hemisphere, and would love to hear about them.
Before I conclude, let me focus very briefly on one of the most severe problems facing the region -- the fight against drug trafficking and drug abuse. Latin Americans now understand that this is everyone's fight. In many Latin American nations, bilateral cooperation has brought excellent results, such as a drop in coca production in Bolivia and Peru of up to 40%, stronger international coordination to break up transnational drug organizations, and increased seizures of narcotics that otherwise would have ended up on U.S. streets.
The case of Colombia will be familiar to all Floridians, I'm sure. Our support for President Pastrana's Plan Colombia -- which intends to advance the peace process in that country; combat narcotics; improve the economy; reform the judicial system; and support democratization -- offers the U.S. and others in the international community a golden opportunity to help Colombia resolve its problems. This is a well-thought out, integrated plan that is very much in our interest to support.
Before I close, let me mention something that affects how well we in the foreign affairs community will be able to fulfill our part of the work to come. In a recent comment on our foreign affairs budget, Secretary of State Madeleine Albright observed that "We are talking about 1% of the Federal budget. But that 1% may determine 50% of the history that is written about our era. And it will affect the lives of 100% of the American people."
It is our partnership with our neighbors in this hemisphere which will assure peace, stability, and progress toward our common goals. This partnership depends in large part on U.S. leadership. Unfortunately, the resources we as a nation have been given to lead effectively and pursue our policy interests have not kept pace with our responsibilities or with the opportunities and challenges before us in this hemisphere. All we are asking for is the tools to do the job the American people expect us to do.
In sum, the U.S. and Latin America stand as neighbors at the threshold of not only a new century and millennium, but also of a new era in which the growing cooperation of the past two decades should be cemented into a permanent bond of mutual support and shared prosperity. By eliminating trade barriers, by helping preserve democracy and reduce poverty in the region, by undertaking a side-by-side joint battle against dangers like the drug trade, we strengthen both our own and our neighbors' stability and well-being.
Florida has a special role in this. Your associations with Latin America go back at least to 1563, when St. Augustine -- the oldest city in America -- was founded by the Spanish. Though Florida is a diverse state, it now, through cultural affinities as well as through trade and geographic proximity, has unique ties to the region which can never be duplicated by our national government or by almost any other state or organization.
I salute Florida's state government, its NGOs, its universities, Sister Cities organizations, business sector, and media for all of the innumerable worthwhile and constructive activities you are undertaking to help deepen ties between your state and Latin America. You are already accomplishing so much.
We stand ready to work with you. Let us go forward together to help make this a hemisphere where security and prosperity are everyone's common heritage.
[end of document]