Economic Growth in Latin America and the Caribbean
One of the priorities of U.S. foreign policy in Latin America
and the Caribbean (LAC) is the promotion of prosperity to
improve the lives of the people, foster regional stability
and expand and link markets for the mutual benefit of the
region and the United States.
USAID’s technical assistance and training support this
to:
- Strengthen economic legal and regulatory frameworks, including
those concerned with labor and environmental issues.
- Remove impediments to business creation, especially micro,
small and medium businesses;
- Improve access to capital for productive purposes;
- Strengthen property rights; and
- Build the population’s skills to better participate
in and benefit from free trade.
This assistance helps countries to expand economic opportunity
for all their citizens through: a.) promoting economic reform;
b) strengthening the rule of law; c) fostering good governance
practices; and d) supporting civic participation in economic
decision-making at the national and local level.
Training and Support
Specific USAID support includes the following:
- Improvements in civil society’s understanding of
the free trade process and how they can benefit from it;
- Legal support to further protect intellectual property
rights;
- Reform of customs procedures;
- Improvements in sanitary and phyto-sanitary procedures:
- Business development services for micro, small and medium
businesses;
- Facilitation of the use of remittances to the region
for development purposes;
- Technical support to improve rural and non-rural productivity;
- Assistance to improve economic, environmental and labor
law; and
- Identification of business links between buyers and sellers
in the U.S. and other markets, especially small and medium
businesses, and farmers.
Over the last several years, U.S. Government has focused
on negotiating free trade agreements in the region, and USAID
has provided trade capacity building to assist participating
countries to:
- Prepare for trade negotiations;
- Implement trade commitments; and
- Transition to free trade (i.e., linking available resources
to market opportunities).
FTA Update:
Free Trade Area of the Americas (FTAA): Lowering
trade barriers is intended to expand opportunities in countries
throughout the region by tying 800 million people into a vast
market that would produce an estimated $14 trillion in goods
and services per year. While formal FTAA negotiations are
now suspended, USAID Missions currently implement FTAA-related
assistance in Brazil, Guyana, Jamaica, Paraguay, and the Eastern
Caribbean.
Andean FTA: The agreement is still in negotiation,
although the last round produced agreement on language covering
trade capacity. USAID is currently providing trade assistance
to three countries comprising the proposed Andean FTA: Colombia,
Ecuador, and Peru. Bolivia, also in the region, has observer
status in the negotiations, participates in a trade working
group and receives assistance from USAID to help prepare itself
for full membership.
DR-CAFTA: In Central America, USAID’s country-by-country
and regional assistance was instrumental in the signing of
the U.S.-Central American Free Trade Agreement (DR-CAFTA).
Countries included in this agreement are Costa Rica, the Dominican
Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
The agreement awaits U.S. Congressional ratification action.
Panama FTA: The negotiations between Panama and
the U.S. continue, but at a slow pace. USAID has begun to
implement a trade assistance program there.
NAFTA: The agreement between Mexico, Canada and
the U.S. was approved in 1994. Supplemental USAID assistance
fosters rural adjustment to the agreement in Mexico.
Chile FTA: Chile has signed an FTA with the U.S.,
which is in force.
USAID LAC at Work
Bolivia – Assistance to the Timber Industry
Amid the reality of illegal logging, USAID works with both
public and private organizations to improve timber production
to meet both economic and environmental standards. Bolivia,
with more than one million hectares of natural forest management,
is home to eight percent of the world’s eco-certified
forests. With USAID support, its exports have risen from two
to ten percent of certified products in less than a year.
Honduras – Assistance to the Dairy Industry
Three years ago, only 20 percent of raw milk produced in Honduras
was being processed because of its inferior quality. To improve
quality, sanitation and competitiveness, USAID organized small-sized
dairy farmers into cooperatives and helped establish 13 milk
collection centers. A recent study after the initiative indicates
that farmers who participated in the cooperatives increased
their incomes by an average of 346 percent.
El Salvador – Financial Services for the Indigent
To strengthen rural organizations and agricultural policy,
USAID helped to strengthen 38 cooperatives and farmer associations
and to increase their production and sale of crops. The programs
introduced new types of savings accounts into credit unions
and trained staff on modern credit, finance and accounting
techniques. Many of the rural organizations remain operational
and continue to provide services to members/clients.
Nicaragua – Crop Diversification
USAID Nicaragua helped farmers take advantage of a growing
market for plantains in the U.S. By assisting in crop management
and directing new packing procedures that conform to global
standards, farmers directly ship weekly to U.S. distributors
in Miami, Chicago, Tampa and New York. The project is expected
to add an estimated 500 new, local jobs.
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