Enterprise for the Americas Initiative promotes economic growth - statement by Assistant Secretary for Inter-American Affairs Bernard Aronson - Transcript

US Department of State Dispatch, June 29, 1992

The Role of EAI

President Bush launched the Enterprise for the Americas Initiative 2 years ago to respond to these dramatic changes. His vision - free trade throughout the hemisphere, greater investment, debt relief, and increased environmental cooperation - has been well received. It fits the vision President Salinas has for Mexico: "We think not about a walled market, but an open market to the rest of the world." And because it is based on trade, not aid, it is an initiative, in the words of President [Patricio] Aylwin of Chile, "better than any of those from the past because it is free of a paternalistic and protective flavor."

The progress made to date has been significant.

Trade. The North American Free Trade Agreement [NAFTA] negotiations, now in the final stages, will create a single market of 370 million consumers and a combined GDP [gross domestic product] of over $6 trillion. Last month, President Bush announced that free trade talks with Chile will follow completion of the NAFTA.

We have signed trade and investment framework agreements with 31 countries in this region. These agreements are vehicles for discussions about liberalizing trade and investment regimes in preparation for hemispherewide free trade. For many countries, these discussions identify the policy measures they need to take to ensure that their economies will be competitive under a freer trade regime. They also identify measures needed to improve investment climate, such as passing laws that protect intellectual property rights.

Investment. A $1.3 billion multilateral investment fund, established last February under EAI, will help countries identify the measures they need to take to attract investment; develop privatization plans; target special loans to smaller enterprises; and provide grants to help train workers, managers, and environmental protection professionals. Japan has pledged to match the US contribution of $500 million to this fund, and 19 other nations from Europe and this hemisphere have pledged to contribute. These countries have responded to President Bush's proposal to create this facility. We urge Congress to approve the full US share of the multilateral investment fund.

The Inter-American Development Bank responded to President Bush's call for a new, fast-disbursing loan facility to promote investment reform. Chile received the first loan last June; since then, Bolivia, Jamaica, and Colombia have received loans, and El Salvador, Guatemala, Costa Rica, Uruguay, Honduras, Argentina, Trinidad and Tobago, Barbados, and Paraguay are under consideration. These loans support a wide variety of measures to improve the climate for private investment and to ensure that all sectors of society can participate in renewed economic growth.

We have signed bilateral investment treaties with three countries, and discussions are underway with seven others. These treaties make invaluable contributions to attracting foreign investment by providing protection against unwarranted expropriations and discriminatory treatment of foreign investors, by establishing clear and transparent rules for settling disputes, and by codifying rules for capital repatriation.