Uncertainty was the watchword at the annual planning meetings of the Association of American Chambers of Commerce of Latin America and the Caribbean (AACCLA) recently in Miami.
Among rapidly unfolding, and at times unsettling, developments in areas such trade negotiations, trade enforcement and legislation, AACCLA members have been left to wonder about the future course of U.S. commercial engagement in the region.
Because the 24 American Chambers of Commerce (AmChams) across Latin America and the Caribbean that make up AACCLA are comprised of companies that account for more than 80% of U.S. investment in the region, the uncertainty felt by the AmChams over U.S. economic policy in the hemisphere reflects that of American business more broadly. Fortunately, the coming months offer important opportunities for the U.S. to solidify its engagement across the region, and AACCLA has identified three areas in which our government can help reassure U.S. exporters, investors, and regional partners of its unwavering economic commitment the region.
Successfully conclude a modernized NAFTA
As has been well documented, Canada, Mexico, and the U.S. are in the midst of renegotiating the 24-year-old North American Free Trade Agreement (NAFTA). A once-in-a-generation opportunity to modernize the pact and harness the benefits of the digital economy has thus far been stymied by a handful of controversial proposals put forth by the U.S., which are opposed by Canada, Mexico, the U.S. business community, and leaders on trade in the U.S. Congress.
AACCLA members are clear that the unease sown by contentious NAFTA negotiations extends beyond North America. AmCham leaders representing the ten U.S. free trade agreement partners in the Caribbean, Central, and South America don’t know what to make of the president’s executive order to review all U.S. trade agreements, and they anxiously monitor NAFTA negotiations for answers.
“We are looking and observing with great expectation what is the progress of the NAFTA negotiations and what the outcome will be to try to gauge what possible impact those will have on other trade deals,” said AACCLA Chairman José Antonio Muñoz.
The U.S. administration has made laudable, growth-oriented strides domestically through regulatory and tax reform, but AACCLA members are quick to assert that those gains could be jeopardized by uncertainty in the U.S. regional trade agenda. With the eighth round of NAFTA negotiations scheduled for April, U.S. negotiators have an opportunity to reverse course on unworkable proposals in areas such as dispute resolution, government procurement, and rules of origin. The pursuit of a modernized NAFTA can reassure AACCLA members and American business interests across the hemisphere about U.S. commercial commitment to the region.
Venezuela – pursue targeted, multilateral sanctions against the Maduro regime
The Trump administration is carefully weighing additional sanctions against the regime of Venezuelan President Nicolás Maduro ahead of what a majority of Organization of American States (OAS) members believe will be a rigged re-election of Maduro to a new term in April. While an increasingly tyrannical Maduro regime and its repression of ordinary Venezuelans must not go unanswered, U.S. officials are correct to take a cautious approach to additional sanctions that avoids harming U.S. economic interests and exacerbating the misery of the Venezuelan people.
For the reasons originally outlined here, the U.S. Chamber and AACCLA continue to believe the United States should pursue multilateral sanctions in lieu of unilateral sanctions and refrain from punitive measures tied to the U.S.-Venezuelan petroleum and petrochemical trade. Secretary of State Tillerson is to be commended for seeking to establish consensus among key allies on his recent visit to the region.
Together with like-minded governments throughout the Americas, the European Union, and beyond, the U.S. should consider applying targeted sanctions on hundreds of Maduro regime members. Coordinated international action to seize assets, limit financial transactions, or restrict travel of every member of the regime’s illegitimate 545-member constituent assembly and key henchmen would inflict significant personal cost on the individuals propping up the regime, while sparing both the long-suffering Venezuelan populace and U.S. businesses direct harm.
Achieve permanent legislative solutions for DACA and TPS beneficiaries
Those permitted to reside in the U.S. under the auspices of Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) currently face an uncertain future. The U.S. Chamber has made clear its view that failure to find permanent solutions for “Dreamers” protected by DACA, as well as Haitian, Honduran, and Salvadoran immigrants protected by TPS runs counter to American principles and presents a significant threat to the U.S. economy.
Forced repatriation of these individuals to their countries of origin would also exacerbate already crushing poverty and high unemployment in countries like El Salvador, Guatemala, and Honduras, inevitably sparking a new wave of immigration to the U.S. El Salvador alone counts some 28,000 of its citizens protected by DACA and more than 200,000 able to remain in the U.S. thanks to TPS.
It is estimated that remittances account for up to 18% of El Salvador’s GDP with Salvadorans in the U.S. under TPS contributing nearly a third of the total. Efforts in the U.S. Senate to permanently resolve the issue fell short recently, and it is imperative that the White House and Congress get back to the negotiating table. Dreamers, TPS recipients, key regional partners, and the U.S. economy are counting on it.
AACCLA is proud to have played a pivotal role in driving U.S. commercial and economic engagement throughout our hemisphere for the past 50 years, and seamless collaboration with the U.S. government has been a key to success. We look forward to supporting our colleagues in the U.S. administration and Congress in 2018 to advance these three issues and much more across the region on behalf of American workers, farmers, and businesses.