"'Summit of the Americas Fails to Establish Agreement on F.T.A.A."

Initiated by U.S. President Bill Clinton in 1994, the Summit of the Americas (S.O.A.), which brings together the leaders of the 34 members of the Organization of American States (O.A.S.) every five years, was conceived as a vehicle for promoting Washington's plan for a Free Trade Area of the Americas (F.T.A.A.) that would extend the North American Free Trade Agreement (N.A.F.T.A.) to the entire western hemisphere according to the principles of the "Washington Consensus" -- fiscal discipline, anti-inflation policies, privatization of state enterprises, reduction of state intervention in the economy and of state expenditures, deregulation of the private sector, and receptivity to foreign investment. The F.T.A.A. was meant to be the capstone of the reforms promoted by the Consensus, opening up the economies of the hemisphere to free trade in goods and services.

At its inception, participants in the S.O.A. endorsed the concept of the F.T.A.A. and began to reform their economies along the lines of the Consensus, partly because of their interest in attracting foreign investment and partly because they were dependent on foreign lenders, particularly the International Monetary Fund (I.M.F.), which required that the reforms be undertaken.

Over the past decade, the Consensus has broken down as reform failed to produce sufficient economic growth to raise the living standards of the 50 percent of Latin America's population who live in poverty, and pressures from below grew for governments to abandon neo-liberal policies and increase social spending.

The first serious rupture came in 1998, when Hugo Chavez came to power in Venezuela and started to institute his "Bolivarian Revolution" that had as one of its essential elements the rejection of the F.T.A.A. in favor of a Latin American economic community based on cooperation to achieve a social model of development. [See: "Venezuela's Hugo Chavez Makes His Bid for a Bolivarian Revolution"]