(3) The U.S.-Chile free trade agreement is an example of a bilateralFTA. For example, the United States recently ratified CAFTA-DR and is movingforward on negotiations with Panama and the Andean countries as part of its overall trade strategyfor free trade in the Americas. Economic Effects of Trade Integration

Supporters of trade integration in the Americas view hemispheric free trade as supportingU.S. economic and political interests in several ways. They argue that the movement towards tradeintegration is beneficial for U.S. economic prosperity and will serve to strengthen democraticregimes and support U.S. values and security interests. Forming closer economic relations withcountries in the region is seen by some as a means to improve cooperation on other issues such asthe environment and anti-drug efforts. U.S. opponents to regional integration in the Americas areconcerned that hemispheric free trade would lead to a loss of jobs in the United States. They arguethat trade agreements would result in U.S. companies shifting production to lower-wage countrieswith weak labor and environmental standards. U.S. Trade Policy in Latin America and the Caribbean

Since the passage of NAFTA, the United States, Canada, and Mexico have pursued tradeliberalization through bilateral, regional, and multilateral negotiations. The last round was held in February 2005. U.S.-Panama merchandise trade is small. imports. (33) 

		Free Trade Area of the Americas (FTAA)

The 1994 vision of hemispheric free trade has been embraced by President George W. Bushand promoted by the formal negotiations in the FTAA process but also by the expansion of bilateralfree trade agreements. An FTAA could have 34 members and nearly 800 million people. Thispopulation would be nearly twice the population of the European Union. (39) 

	Regional Integration Initiatives in the Americas

Countries in the Western Hemisphere have been forming regional trade agreements since1961 when the Central American Common Market was formed. (40) In an effort to increasetrade with other countries, Mexico has negotiated a total of 12 trade agreements involving over 40countries (see Table 4). Officials from the Caribbean and Mercosur countries held talks in February2005 about establishing a free trade agreement between the two regions. (60) Leaders expect that theintegration of South America would put South American countries in a stronger position innegotiations with the rest of the world, including a possible free trade agreement with the EU andthe Free Trade Area of the Americas (FTAA). (61) 

	Policy Issues and Implications

		Continuation of Bilaterals and Regional Trade Agreements

In the absence of an FTAA, it is highly possible that the number of bilateral RTAs in theWestern Hemisphere may continue to increase. (70) 

		Trade Integration and U.S. Interests

Trade integration in the Americas has gained momentum since the 1990s. The possibilityof forming an FTAA or trade agreements with Andean countries and Panama is of interest topolicymakers because of the economic and political implications for the United States. As theeffects of NAFTA on the U.S., Mexican, and Canadian economies become clearer, policymakers arefaced with the issue of whether trade agreements are beneficial to the United States and how theUnited States should proceed in its trade policy in the Western Hemisphere. As pointed out earlier, some analysts do not believe that bilateral tradeagreements are the best course of action because they take away the focus from energizing the FTAAnegotiations and are slowing down the process.
Since the 1990s, the countries of Latin America and the Caribbean have been a focus ofUnited States trade policy, as demonstrated by the passage of the North American Free TradeAgreement (NAFTA), the U.S.-Chile Free Trade Agreement, and, more recently, the CentralAmerica-Dominican Republic Free Trade Agreement (CAFTA-DR). The Bush Administration hasmade trade agreements important elements of U.S. trade policy. The United States currently is inthe process of completing trade negotiations with Andean countries for a free trade agreement (FTA)and on reactivating talks for a U.S.-Panama FTA and a Free Trade Area of the Americas (FTAA). The FTAA is an on-going regional trade initiative that was first discussed in 1994 and formallystarted in 1998. The last FTAA trade ministerial meeting was held in Miami in November 2003, butthe talks are currently stalled.
The efforts of the United States in regional trade integration in the Americas are significantfor Congress because U.S. entry into any free trade agreement may only be done with the legislativeapproval of the Congress. U.S. supporters of trade integration in the Americas believe it helps U.S.economic and political interests in several ways. Proponents believe that the movement towardstrade integration of the Americas is beneficial for U.S. prosperity, and also serves to strengthendemocratic regimes and support U.S. values and security. Forming closer economic relations withcountries in the region is seen by some as a means to improve cooperation on other issues such asthe environment and anti-drug efforts. U.S. opponents of trade integration proposals are mainlyconcerned that hemispheric free trade would lead to a loss of jobs in the United States throughincreased import competition or as a result of U.S. companies shifting production to lower-wagecountries with weak labor standards.
The number of regional trade agreements in the Americas has been increasing since the1990s. Major trade arrangements include NAFTA, CAFTA-DR, the Southern Common Market(Mercosur) in South America , the Andean Community (CAN), the Caribbean Community andCommon Market (CARICOM), the Central American Common Market (CACM), and the LatinAmerican Integration Association (ALADI). With a total of 12 trade agreements involving over 40countries, Mexico is one of the countries with the highest number of agreements. Supporters notethat if countries in the Western Hemisphere ultimately establish an FTAA, it could have as many as34 members and nearly 800 million people, nearly twice the population of the European Union.
Trade integration in the Americas is of interest to policymakers because of the implicationsfor the United States. Issues under debate include the pros and cons of deepened trade relations withLatin America and the Caribbean, and whether the current focus on bilateral and regional FTAs isthe most appropriate trade policy. Some analysts do not believe that such a policy is a good ideabecause it is creating a complicated network of trade agreements throughout the region could slowdown the FTAA process. Others believe that regional trade agreements lead to the consolidation ofregional trade areas into larger free trade areas, and although a slow process, may eventually lead toa hemispheric free trade area.