Latin America Advisor
April 29, 2013
Clyde Prestowitz, founder and president of the Economic Strategy Institute: "The TPP is actually not very important to the Latin American participants in the negotiations with the exception of Mexico. For Mexico, the main issue will be to prevent any new TPP from under- cutting Mexico's current advantages resulting from NAFTA. For instance, reduction of U.S. tariffs on textile imports from, say Vietnam, could well negate the textile arrangements of NAFTA that have greatly spurred the growth of the Mexican textile industry. By the same token, the countries of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) should have the same concerns. There are several issues that could derail the negotiations. One is the investor-state clauses of the agreement that appear to give global corporations the ability to sue sovereign states before a private tribunal if the governments of those states change regulations, tax laws or other legislation that might disadvantage the corporations. Many democracy-promoting organizations and labor unions are strongly opposed to this clause of the TPP. Also, the TPP does not cover practices such as strategic currency management, investment subsidies and competition policy, which are the main drivers of trade flows. Some governments may feel that a trade deal that does not actually apply to the main drivers of trade may be a bit silly."