United States-Latin America and the Caribbean Trade Developments 2008-2009

This document provides an overview of the most relevant developments in United States trade relations with Latin America and the Caribbean that took place in 2009 and of measures that inhibit the free flow of goods among countries in the Western Hemisphere.

As the global financial crisis intensified, global trade fell abruptly in the second half of 2008 and first half of 2009, and governments around the world took action to stimulate the economies and prevent major industries from collapsing. Most of the adopted measures aimed at restoring confidence, unlocking financial markets, and/or strengthen demand. However, some of the assistance has had the additional effect of increasing the risk of protectionism around the world. The Western Hemisphere was no exception to the rule. This document presents the trade related measures adopted in the Western Hemisphere since the start of the financial crisis.

With the global economic crisis as a backdrop, the U.S. Administration has been primarily concerned with restoring economic growth and prosperity while tending to domestic issues, including the health care reform and climate change before laying out a new trade policy agenda. The latter will probably focus on the enforcement of trade agreements already signed and seek to take remedial action of the negative economic consequences of the adjustments brought on by trade liberalization on workers, families and their communities.

As a consequence, action on the three pending bilateral free trade agreements with Colombia, Panama and South Korea took the back seat this year and so did the pending U.S. trade preferences program's reform. Although, the 31 December 2009 expiration of the Andean Trade Preferences and Drug Eradication Act (ATPDEA) and of the Generalized System of Preferences (GSP) programs was seen as an opportunity to review and reform the U.S. trade preferences programs, a one year extension was approved by Congress on 22 December 2009. The reforms will likely take place sometime in the near future. The reform is intended to harmonize all U.S. preferences programs, extend benefits to all least developed countries (LDCs), and graduate from the program the most advanced developing countries. A bill laying out some of the potential reforms was introduced to the Senate Committee of Finance and Trade at the end of November.

Significant 2009 developments were the passage of the Clean Energy and Security Act of 2009 by the House of Representatives in June and some legislative changes in trade and travel with Cuba.

The Administration made the decision to join the Trans-Pacific Strategic Economic Partnership (TPP) negotiations as a way for engaging the region. TPP negotiations include Singapore, Australia, Peru, Chile, New Zealand and Brunei. Vietnam would participate as an observer.