Included among the methods for achieving economic integration is the Free Trade Area of the Americas, which is defined as a regional economic process by which customs duties and other barriers to trade in products between the countries making up the group are eventually eliminated, but in which each member retains its own (usually differing) trade policy and tariff schedule with respect to trade relations and imports from countries outside the zone. Tariffs are normally reduced gradually until they reach zero rates within the group, with special concessions for relatively less developed member countries.

The FTAA (Free Trade Area of the Americas) is thus a trade negotiation process involving the 34 democratic nations of the Western Hemisphere, which seeks to create a free zone for trade and investment to take effect in the year 2005.

Trade with the FTAA countries accounts for 48% of Chile’s foreign trade, 54% of foreign investment in its economy, and 98% of Chilean investments abroad. Moreover, Chile has negotiated more trade agreements with future members of the FTAA than any other country in the Americas. Its trade in goods with Canada, Mexico, Colombia, Venezuela and Ecuador is virtually duty-free already. Finally, its existing agreements with Peru and MERCOSUR, and its recently signed agreement with Central America, are all moving in this same direction. In this way, the FTAA can by the means for expanding, improving and deepening the agreements already in place.

Given this general backdrop to the FTAA, we will focus on our institutional context as a regional development organization. Chile’s Region VII (Maule) has seen large-scale migration from rural areas into urban centers over the past three decades, almost exactly reversing the 60% rural, 40% urban distribution of its population over that 30-year span. This population movement has occurred primarily among the inhabitants of arid interior regions, coastal areas and the lower slopes of the Andes where a number of municipalities have recorded negative population growth.

The most important productive sectors in our region are agro-forestry, manufacturing, trade, construction and electricity, gas and water, which together account for 76% of the region’s GDP.

Comparing these five sectors in terms of job creation as well as contribution to regional GDP, the clear leader is agro-forestry, followed by trade and manufacturing.

Following a general presentation on our region, Fundación CRATE, as the institution responsible for promoting integrated development of agricultural communities within Region VII, will present certain apprehensions with respect to the FTAA related to the following topics:

• Establishment and enforcement of environmental standards for products and processes. Product standards being understood as those that define the characteristics of the final good reaching a given market, such as pesticide content; quality of packaging; phytosanitary status, which may or may not be considered an environmental factor, etc. Whereas process standards govern the characteristics of the production process and are not evident in the final product, such as the level of water pollution associated with specific processes, etc. We point out these factors because the elimination of trade barriers between countries will bring great pressure to increase production of goods, which may result in serious damage to the environment if the necessary regulations are not in place to prevent this. At the same time, it may also lead to over-exploitation of natural resources, affecting the sustainability of production and development in general.
   
• An associated problem is the greater risk of contamination and adverse effects on human health due to increased pesticide use in response to the pressure for ever-higher production. In addition, we have the problem of soil erosion in dry farming areas due to clear-cutting and “green desertification” as the use of monoculture forestry plantations continues to spread, with the resultant loss of biodiversity.
   
• Increase in the flood of migration from rural areas into the cities, and loss of traditional culture and values since, by eliminating trade barriers for agricultural commodities, our country will be facing strong competition in traditional categories such as wheat, corn, oilseeds, sugar and dairy products - products involving many small producers, which only adds to the dilemma.