Following U.S. Congressional passage of the Trade Act of 2002 in late July, U.S. trading partners around the world praised the long-anticipated authorization of "fast track," or trade promotion authority. While the legislation certainly will have significant global implications, benefits for the Western Hemisphere are particularly critical; coming at a time when much of the region is experiencing economic hardship and political uncertainty. By opening regional borders to more-free trade, the U.S. is helping its own economy as well as those of its closest neighbors to enjoy a much-needed stimulus.

The newly granted TPA for President Bush is expected to have at least three immediate implications on U.S. trade relations with Latin America. It will allow the U.S. to complete ongoing free trade agreement talks with Chile; it will assist in launching FTA negotiations with Central America; and it will help implement the hemisphere-wide Free Trade Area of the Americas by 2005.

As a result of another provision in the trade bill, businessmen and women in Bolivia, Colombia, Peru and Ecuador are breathing a huge sigh of relief while gearing up new business plans to take advantage of the renewal and expansion of the Andean Trade Preference Act. The ATPA, which provides beneficiary countries with preferential trade benefits in the U.S. market, was established in 1991 to help stabilize the region. However, the program expired last December, significantly raising costs to Andean exporters of such products as cut flowers, furniture, asparagus and jewelry.

Colombia's cut flower industry, for example, which accounts for approximately 1 percent of all household income in Colombia, was hardest hit with ATPA expiration because trade benefits lapsed just as Colombian exporters were planning their spring shipments to meet the U.S. demand for Valentine's Day and Mother's Day. The reinstatement of the benefits saved several small flower companies from going out of business and helped many other sectors throughout the region remain competitive during an extremely volatile economic period.

Andean manufacturers of products excluded under the original ATPA, namely apparel executives, staged a formidable lobby effort in Washington to have their products included in order to remain competitive with similar eligible products in the region from Mexico and Caribbean and Central America.

With the help of U.S. companies interested in expanding their purchases in the Andean region, Colombian and Peruvian apparel industries in particular were successful in securing broad benefits for apparel. The four countries now are able to export a limited amount of knit and woven garments made with regional yarn and regional fabric duty free. The bill also includes duty free benefits for certain processed tuna, a provision that is expected to greatly help Ecuador boost its exports to the U.S.

The overall benefits that will accrue to Andean countries and the region as a result of the ATPA program could be monumental. Andean countries need to create jobs to spur their faltering economies, stabilize governments, raise standards of living, and deter illicit activities associated with coca production.

Thanks to the leadership of President Bush, renewed investor confidence in the region will help develop and diversify the economies of the Andean countries creating more than 150,000 new jobs. In addition, the expanded benefits under the ATPA undoubtedly will help level the playing field for Andean exporters and will provide a sourcing base close to home for U.S. companies. Prior to enactment of the Trade Act, many of these U.S. companies began shifting purchases from South America to Asia.

By giving his signature on August 6, President Bush enacted a trade-liberalizing initiative that serves only as a mere steppingstone toward what is expected to become a significant era of market opening successes.

While TPA will provide the tools needed to launch trade agreements in Latin America and elsewhere, ATPA enhancement will create immediate tangible benefits for some of the poorest countries in the region.

By allowing these countries to fully realize their economic potential, the U.S. has more importantly sent a positive and necessary signal to the rest of the world that it is a leader in helping all countries prosper from free trade.