Date: Sun, 16 May 1999 23:41:25 -0500 (CDT)
From: "Agent Smiley" <email@example.com>
Subject: Chile and Nafta
Former envoy urges Chile to reconsider Nafta Pact should be accepted on its terms: McLarty
Kevin G. Hall, Journal of Commerce staff writer
16 May 1999
SANTIAGO, Chile -- Almost six years after Chile was invited to join Nafta,
President Clinton's former special envoy to Latin America said Chile should
again consider membership.
Speaking to a small group of mostly Latin American economic reporters
Wednesday afternoon at the start of the World Economic Forum's Mercosur
Summit here, Thomas "Mack" McLarty suggested Chile could resolve a deadlock
by simply agreeing to the North America Free Trade Agreement as written.
"I think this kind of approach would perhaps yield some results," Mr.
McLarty, now in the private sector, said.
He noted now is a good time to press initiatives as Congress is debating
trade with China. Although invited to negotiate access to Nafta in December
1994, Chile refused to join the pact because President Clinton has been
unable to win broad trade negotiating authority, called "fast-track"
authority, that permits a legislative vote on proposed trade deals without
Independent of Mr. McLarty's suggestions, Chile and the United States this
month are expected to exchange information on their respective labor and
environmental regulatory systems with an eye toward gauging how much
Although Nafta is a pact directed at North American economic integration,
most of the disciplines in the agreement are supported by Chile in other
But Chile's foreign affairs secretary, Jose Miguel Insulza, discounted any
trade pact without U.S. fast-track authority.
"Fast-track for us is a political sentiment. It's an insurance that we
want," Mr. Insulza said, noting the no-amendment nature of fast-track
authority reduces pressure for unpopular concessions after a negotiation has
If Chile were to simply agree to current Nafta rules, it would have to
abide by labor and environment side accords largely focused on U.S.-Mexico
issues. The labor provisions of Nafta generally address workshop issues and
efforts to harmonize workplace safety practices. But the environment panels
created by Nafta, in particular, have less relevance to Chile.
Chile has moved aggressively to pursue other free-trade opportunities. It
has negotiated a trade pact with Canada that could also serve as a base for
a bilateral treaty with the United States, and also revamped a pre-existing
pact with Mexico. Both the Mexico and Canadian trade pacts use Nafta
mechanisms for resolving controversies and several other disciplines.
Chile is also an associate member of the Mercosur trade bloc -- which
includes Brazil, Argentina, Paraguay and Uruguay -- and would be a full
member if it did not have to raise its average global tariff to come in line
with Mercosur tariffs.
In the first few years after the invitation to join Nafta, Chile publicly
presented itself as a bridge between the more-sophisticated Nafta and the
tariff-reducing Mercosur customs union. Chile had more in common with Nafta
since its judicial system and regulatory environment are generally more
sophisticated than those of its Mercosur neighbors.
But in his speech to reporters, Mr. Insulza said Chile sees itself as a
natural member of Mercosur. Still, Chile wants its neighbors to go beyond
on tariff reduction and coordinate macroeconomic policy and negotiate
agreements on services, and create new dispute-resolution mechanisms, he
"We still want to be a bridge," Mr. Insulza insisted, noting Chile's
outreach to other countries to forge accords that include Nafta-like