Integrating the Americas: FTAA and Beyond; Free Trade and the Environment: Mexico, NAFTA, and Beyond

Free trade agreements are the contemporary equivalent of security alliances. Assuming Congress ratifies the U.S.-Central American agreement this year, free trade will stretch from Alaska to Panama, and the Bush administration is negotiating additional pacts with Colombia, Peru, and Ecuador as stepping-stones to a full-blown Free Trade Area of the Americas. In 23 stimulating essays compiled in this valuable reference guide by the Inter-American Development Bank and Harvard University's David Rockefeller Center for Latin American Studies, seasoned analysts explore the economic, social, and legal ramifications of hemispheric free trade--including on macroeconomic policies and exchange rates; competition and regulatory oversight; productivity, wages, and income distribution; foreign investment flows; and labor and environmental standards. Unfortunately, absent from these competent technocratic endeavors is a genuinely integrating vision of institutions linking freer markets, democratic governance, and social equity.

Gallagher's study, meanwhile, provides ammunition for both defenders and detractors of the North American Free Trade Agreement. In a conclusion consistent with other expert findings, Gallagher states that Mexico has not served as a pollution haven; there has been no "race to the bottom." Economic growth has continued to degrade Mexico's environment, yet he cannot isolate and therefore cannot credibly blame international trade and investment. At the same time, Gallagher finds that NAFTA has failed to halt the damage caused by growth to Mexico's air and water; its environmental institutions have generated some good pilot programs, but they lack the money and power to carry real bite. Mexico, for its part, has developed an elaborate set of environmental laws but not the political will or resources to enforce them. (With apparent calculation, the government sharply increased the number of plant inspections just before NAFTA's ratification but decreased them precipitously soon thereafter.) Gallagher joins contributors to integrating the Americas in advocating cooperative approaches to environmental (and labor) standards, calling on the international community to help Mexico and other developing countries build the capacity to implement their own national laws.