It has also been acknowledged that participation from small economies is imperative for the success of the FTAA. A hemispheric economic space cannot exist without participation from small economies. Heads of State and Government, as well as Ministers responsible for trade negotiations have expressed the urgent need to ensure effective participation from small economies, for their own benefit and also for the success of the entire process. During the 6^th Ministerial Meeting convened in Buenos Aires, Argentina, the Ministers indicated the following: 

We reaffirm our commitment embodied in previous Ministerial Declarations to take into account, in designing the FTAA, the differences in the levels of development and size of the economies in our Hemisphere to create opportunities for the full participation of the SMALLER economies and to increase their level of development. We recognise the broad differences in the levels of development and size of the economies in our Hemisphere and will remain cognizant of these differences in our negotiations so as to ensure that they receive the treatment they require to ensure the full participation of all members in the construction and benefits of the FTAA.1.

In addition, the Trade Negotiations Committee was instructed to formulate by November 1, 2001, with support from the Consultation Group on Small Economies and the Tripartite Committee, guidelines or directives on ways of applying the treatment of the differences in the levels of development and size of economies.

Special and differential treatment is a principle that has been incorporated into the framework of the World Trade Organization (WTO). WTO provisions on this issue constitute the basis for the establishment of the same provisions within the FTAA. The FTAA will be a more profound agreement with greater coverage. Consequently, special and differential treatment in the FTAA may extend what is included in the WTO, in coverage, range and character.

This document focuses on special and differential treatment that responds to differences brought about by the size of economies.

Defining those countries that may be considered as small economies is a decision of a political nature. Nevertheless, we understand that all CARICOM and Central American countries, in addition to several South American countries may be considered as small economies. The key question therefore is to determine the treatment that will be given to these small economies.

II. Principles of special and differential treatment for small economies

1. Special and differential treatment can in no case be less than that contemplated in WTO rules.
   
2. These measures must be flexibly implemented in such a manner that countries can determine the rhythm and nature of the adjustment process in different topics and sectors.
   
3. The determination of special and differential treatment must be considered in each negotiating group.
   
4. For certain subjects, it could be necessary for differential treatment to be granted by productive sectors based on a case-by-case analysis.
   
5. Once differential treatment is defined, its duration will be determined, depending on the analysis done in each case.
   
6. In some negotiating groups, many categories of countries might be needed for applying special and differential treatment. These categories would be unique for all subjects.
   
7. The FTAA needs to have a Hemispheric Cooperation Plan. Sources of cooperation must therefore be identified, and there must be support from the Tripartite Committee.
   
8. Special and differential treatment must promote, among other things, the enhancement of competitiveness.
   
9. Special and differential treatment must be specific and enforceable and go beyond “best endeavours” measures.

III. Type of Measures

The following list of measures is not exhaustive but one which is open to further additions:

1. Provisions aimed at increasing trade opportunities (access to technology, information networks, etc.).
2. Flexibility in the application of norms.
3. Lower levels of requirements in certain disciplines.
4. Longer implementation periods.
5. Exceptions to commitments in certain areas.
6. Enabling small economies to use dispute settlement access mechanisms.
7. Technical assistance and training before and during negotiations, and also during the implementation stage.
8. Mechanisms for dealing with balance of payments problems.
9. Special safeguards which address the peculiar needs of small economies.

IV. Adjustment mechanism
To explore the establishment of a financing fund to facilitate de adjustment of small economies.

V. Defining small economies
The Meeting agreed that there is a need to continue working on the definition of small economies, using as a reference quantitative and qualitative criteria.

1.

Selected Paragraphs on
Special and Differential Treatment for Small Economies in the Context of the Free Trade Area of the Americas (FTAA)

Sixth Meeting of Ministers of Trade of the Hemisphere

Ministerial Declaration

Buenos Aires, Argentina

April 7, 2001

6. We reiterate the importance of cooperation to enable the strengthening of the productive capacity and competitiveness of these economies. Similarly, in the light of general principles which we approved in the San Jose Ministerial Declaration, we reaffirm the need for technical assistance as well as specific provisions to meet the needs of those countries with different levels of development and size of economies, including the special needs of the SMALLER economies, to enhance their capacity to derive maximum benefits from their participation in the FTAA.

13. We also instruct the Trade Negotiations Committee to continue its consideration of the treatment of the differences in the levels of development and size of the economies in the Hemisphere, including the SMALLER economies, and to provide, in this respect, ongoing guidance to the Negotiating Groups in their consideration of specific proposals submitted by the countries and groups of countries on each one of the substantive negotiating areas.

14. With the support of the Consultative Group on SMALLER economies and the Tripartite Committee, the Trade Negotiations Committee should formulate, no later than 1 November 2001, guidelines or directives on ways of applying the treatment of the differences in the levels of development and size of economies.

20. In this regard, we welcome the approval of the Multilateral Investment Fund (MIF) Technical Cooperation Project - which comes under the authority of the Inter-American development Bank – which will contribute towards facilitating the implementation of customs measures, taking into account the differences in the levels of development and the size of the economies, including the SMALLER economies.

26. In this connection, we instruct the Committee of Government Representatives on the Participation of Civil Society, to foster a process of increasing and sustained communication with civil society, to ensure that civil society has a clear perception of the development of the FTAA negotiating process. To this end, we instruct the Committee to establish a list of options for the consideration and decision of the Trade Negotiations Committee at its next meeting, which could include dissemination programmes in SMALLER economies, which could be funded by the Tripartite Committee or other international sources of funding.

Consultative Group on SMALLER economies

32. We have received the report of the Consultative Group on SMALLER economies and are grateful for its recommendations on activities and work to be completed in the future work of the Group with the aim of successfully treating the differences in the level of development and size of the economies of the Hemisphere. We recall that considerations related to differences in the levels of development and size of the economies of the Hemisphere must be taken into account within the context of each Negotiating Group. We instruct the TNC to consider ways to improve the flow of information between the Negotiating Groups and the CGSE on issues arising relevant to the interests and concerns of SMALLER economies so that the CGSE can adequately fulfil its mandate. We appreciate the considerable progress made in developing a database containing the technical assistance needs and sources of technical assistance for SMALLER economies, and are grateful for the further efforts made to enhance the system.

Instructions to the Negotiating Groups
General Instructions

4. We reiterate to the Negotiating Groups the obligation to consider proposals, which ensure the treatment of the differences in the levels of development and size of the economies in the Hemisphere, in particular, the situation of the SMALLER economies, through consideration of the proposals submitted by the countries or groups of countries.

Third Summit of the Americas

Quebec City Declaration

April 20-22, 2001

We instruct our Ministers to ensure that the negotiations of the FTAA Agreement are concluded no later than January 2005, to ensure its entry into force as soon as possible, and no later than December 2005. * This will be a key element for generating economic growth and prosperity in the Hemisphere, and will contribute to the achievement of the wider objectives of the Summit. The Agreement should be balanced, comprehensive, and in keeping with the rules and disciplines of the World Trade Organisation (WTO), and must constitute a single undertaking. We consider it of tremendous importance that in its design, the Agreement should take due consideration of the differences in size and the levels of development of the economies of the participating countries.