Jonathan C. Hamilton, “Trans-Pacific Partnership: A Free Trade Agreement of the Americas?” based on remarks at the Inter-American Dialogue (2015)

What is the foreign policy context of the Trans-Pacific Partnership (TPP)? Would it be a form of the previously abandoned Free Trade Agreement of the Americas (FTAA)? It was late 2015 and trade treaty policy appeared to be in the balance as the 2016 U.S. election approached. These comments by Jonathan C. Hamilton are based on remarks at an event hosted by the Inter-American Dialogue, the Washington, DC, think-tank dedicated to Western Hemisphere affairs.

A quarter of a century ago, there were no free trade and investment agreements involving Latin America, and no treaty mechanisms for resolution of investment disputes through international arbitration.  As part of a broad “Washington consensus” on macroeconomic development policy in the 1990s, however,  Mexico, Canada and the United States ratified NAFTA and a range of countries ratified numerous bilateral treaties.  The inaugural Summit of the Americas held in 1994 in Miami contemplated a Free Trade Agreement of the Americas.

A hemispheric trade and investment agreement never happened.  Instead, fragmentation emerged among states favoring free trade agreements, states following the status quo and states which have sought to roll back free trade agreements.  Much attention has been focused, in particular, on steps by Venezuela, Ecuador and Bolivia to terminate or reexamine bilateral treaties and to denounce the Washington Convention providing for investment arbitration under the auspices of the World Bank.

At the same time, countries like Chile, Peru, Mexico and the United States, as well as Colombia others, have continued to move the free trade agreement agenda has forward, through CAFTA-DR and a series of bilateral agreements not only within the hemisphere and around the world.  Those countries have faced relatively fewer cases and achieved relatively better results in international investment disputes than certain Latin American states that have sought to alter the treaty frameworks agreed in the past, including with respect to investor-state dispute settlement (ISDS).

In this context, two major multilateral trans-oceanic trade and investment agreements, each involving the U.S., but only one of which involves other major Western Hemisphere states:

• Transatlantic Trade and Investment Partnership (TTIP), a multilateral U.S.-European deal, which is mired in negotiations that will extend into 2016 at the least;

• Trans-Pacific Partnership (TPP), its transpacific counterpart, for which a negotiated text was agreed October 5, 2015, in Atlanta, following seven years of negotiations.

The full list of negotiating parties to the TPP includes:

Western Hemisphere

• Canada

• Chile

• United States

• México

• Perú

Asia/Oceania

• Australia

• Brunei

• Japan

• Malaysia

• New Zealand

• Singapore

• Vietnam

The TPP, unlike TTIP, includes not only the U.S. but also its NAFTA partners, Canada and Mexico, as well as Chile and Peru.  Other countries in the region could follow in due course, perhaps beginning with Colombia, which also is part of the Pacific Alliance together with other “Pacific Pumas” Chile, Mexico and Peru. 

Does the TPP herald the belated arrival of the FTAA, or something entirely different?  This question will be in play as policymakers, stakeholders and politicians consider signature and ratification of the TPP.

A quarter of a century ago, there were no free trade and investment agreements involving Latin America, and no treaty mechanisms for resolution of investment disputes through international arbitration. As part of a broad “Washington consensus” on macroeconomic development policy in the 1990s, however, Mexico, Canada and the United States ratified NAFTA and a range of countries ratified numerous bilateral treaties. A hemispheric trade and investment agreement never happened.   Fragmentation emerged among states favoring free trade agreements, states following the status quo and states which have sought to roll back free trade agreements.

Jonathan C. Hamilton