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<text> <title> The North American FTA: The New World Order Takes Shape </title> <article> <hdr> US Department of State Dispatch, April 13, 1992 The North American FTA: The New World Order Takes Shape In the Western Hemisphere </hdr> <body> Robert B. Zoellick, Under Secretary for Economic and Agricultural Affairs and Counselor of the Department of State Address before the Columbia Institute's conference on "NAFTA: Impacts of a Borderless Economy on North American Regional Competitiveness," Tucson, Arizona, April 3, 1992 What do Switzerland, the Cold War, and NAFTA have in common? This is not a riddle, but a serious question. According to the story, President Salinas was attending a meeting of the World Economic Forum in Davos, Switzerland in early 1990 when he came to a realization about the end of the Cold War. President Salinas reportedly observed that the post-Cold War world would pose new economic challenges for Mexico and North America. On the one hand, many developed nations, especially those of Western Europe, would probably be preoccupied with the demands for investment, trade, and development of the world that was frozen behind the Iron Curtain for over 4 decades. On the other hand, developing countries would have to compete even more vigorously than before for capital, to create jobs, and to expand trade. So, the story goes, NAFTA was born. I start with this perspective because it is important to recognize that we are in fact creating a post-Cold War order, and NAFTA is part of it. Indeed, I believe that NAFTA could be a practical expression of the way that the United States can address a number of the changing challenges of a new era. Of course, this is still a period of transition. This new era is so fresh that we still don't even have a proper name for it, other than to refer to these times as after what came before: a post-Cold War era. Yet to me, this flux represents dynamism, and dynamism means opportunity for those who are ready to leave old assumptions behind and be guided by a vision of the future. One feature of the United States' foreign policy strategy in this post-Cold War world is that our economic policy must become an increasingly critical component of our planning and action. The United States must be economically strong at home and abroad. One or the other won't do. That is why NAFTA is so important. It is a rare strategic opportunity to secure, strengthen, and develop our continental base, economically and politically, in a way that will promote America's foreign policy agenda, our economic strength and leadership, and US global influence. The United States is the only nation in the world today that ranks at the top of the scales of political, military, and economic power. Over the course of the past few years--in Europe, the Gulf, and elsewhere--we have once again demonstrated our political and military leadership. But it is also vital that we remain in the forefront of international economic policy. We've taken important steps in this direction. The US is the largest exporter in the world. Nearly one-third of our growth in GDP from 1986 to 1991 is due to our increased exports. The US worker is the most productive in the world, 31% above Japan, 26% above the western states of Germany. During the 1980s, the productivity of our manufacturing workers grew an average of 3.6% per year. Taken together, exports and productivity produce jobs: Our growth in merchandise exports accounted for about 25% of the total growth in private industry jobs between 1986 and 1990. But no one ever got ahead just by touting accomplishments. We need to develop political and economic structures that enable us to grow stronger, and in doing so, to expand prosperity and opportunity for others around the globe. The NAFTA would be a key component of a network of global, regional, and bilateral arrangements that promote American interests. It can strengthen the capabilities of North America, enhancing our ability to compete globally. Attention to the challenges of regional integration is definitely not the same as the promotion of regional blocs. The signal the United States wants to end the world is that we're committed to opening markets and that we will extend a hand to others who share that commitment. NAFTA is a commitment by the United States, Mexico, and Canada to be outward-looking, promoting liberalization of trade and capital flows in our hemisphere as a step toward promoting them globally. In particular, we want to support the efforts of Mexico, and then the rest of Latin America, to leave behind the illogic of economic autarky. The new leaders building competitive market economies in Latin America want to do business with Asia and Europe as well as North America. It is in our interest to support their transition to the global marketplace. Indeed, this generation of political and business leaders has the opportunity to fulfill a lost promise of America's revolutionary generation. Our revolution won more than our independence; it was viewed at the time as a practical experiment emanating from the Age of Reason, the Spirit of the Enlightenment. That's why in 1782 the new Congress of the United States selected the motto "Novus Ordo Seclorum," New Order of Ages, for the Great Seal of the new nation. Our experiment inspired others, inspired the causes of Bolivar and San Martin. While the revolutions against Spanish colonial authority in Latin America were victorious on the field of battle, their hopes were not fulfilled. Indeed, a traveler to Washington, DC, today can see the special place accorded statues of Latin American liberators--not European, not Asian--among the Capital's memorials to our American heroes; mute statements of a dream not yet realized. For 2 centuries, the United States' hemispheric relations, starting at our Latin border with Mexico, were marked by disappointments and conflicts on both sides. But the original vision still survived, preserved by leaders with imagination on both sides of the border, people who understood the importance of US-Mexican relations. In the 1860s, during the Civil War that almost destroyed our American experiment, President Lincoln still took time to support President Juarez in his struggle against French efforts to install a European Emperor in Mexico. In 1933, shortly after assuming office, FDR rose above preoccupation with a deep depression at home to chart a new course with Mexico and the rest of Latin America. FDR called it the "Good Neighbor Policy." And he dismissed the special interests who argued that Latin America was "different" and not ready for such a special relationship. Almost 30 years later, in 1961, another new President, John F. Kennedy, called for an Alliance for Progress with Latin America. He asked us to reach out to our hemispheric neighbors, to rise above those who lament about what we cannot do, saying the Latins are poor--or "different." Now, after another 30 years, we have the opportunity to sustain and invigorate that vision. After 200 years, history is coming full circle. This generation, on both sides of the border, has the opportunity to integrate North America in a way that will build the foundation for stronger cohesion, growth, and cooperation. The people of the United states may take for granted our geopolitical good fortune. Unlike most of the rest of the world, our land borders, extending about 7,500 miles, are marked by the absence of military threat. But the challenges of the 21st Century will be of economics, environment, narcotics, and migration, as well as military. The security of our citizens will encompass this broader set of challenges. So we need to complete the North American reconciliation in a way that s