Europe and the Americas: Toward a TAFTA‐South?

Five years ago, European officials proposed the negotiation of a transatlantic free trade area (TAFTA) linking the United States and the European Union in the world's largest free trade zone. Flush from their successful conclusion of extensive multilateral trade reforms in the Uruguay Round, it seemed logical that the two leaders of the world trading system could work together to resolve their remaining trade problems and in the process set powerful precedents for the rest of the world to follow. In so doing, they would accelerate progress toward the ultimate goal of "global free trade". Transatlantic free trade seemed such an easy task. Bilateral trade and investment was already large and largely unfettered (except in agriculture) and the proposals garnered support from both business and labor organizations. After the acrimonious debate over the ratification of the North American Free Trade Agreement (NAFTA), proponents felt that the TAFTA would not raise the same concerns about social and environmental dumping that nearly killed the North American pact. However, the initial fervor for such talks soon dissipated when it became clear that sharp differences in US and European regulatory policies, as well as agricultural support measures, made the negotiating task exceedingly difficult. Moreover, officials failed to assess the potential damage to the nascent World Trade Organization (WTO) that could result if the world's most powerful trading nations struck a deal that discriminated against suppliers from the world's developing countries. The grand vision of TAFTA was shelved and replaced by