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Front Page » Top Stories » Caterpillar Executive Endorses Hemispheric Trade Pact At Talk

Caterpillar Executive Endorses Hemispheric Trade Pact At Talk

Written by on May 31, 2001

By Paola Iuspa
Preparing to open a third site in Miami, Caterpillar Inc. is strengthening the local muscle behind the push for a Western Hemispheric trade agreement that would eliminate trade quotas and tariffs.

Robert Petterson, vice president of the Latin American division of Caterpillar, said the proposed Free Trade Area of the Americas, or FTAA, among all countries in the Americas except Cuba could happen if it gains public support. Caterpillar, a manufacturer of engines and construction and mining equipment, is opening a logistics center in Beacon Station.

Ms. Petterson made his remarks last week at the Hyatt Regency Miami as featured speaker for the Brazilian-American Chamber of Commerce of Florida. He said it was important people call their representatives in Washington to support the accord.

"There is a strong lobby effort coming alive," he said. "I believe there is a chance. Here, Florida FTAA Inc. is starting a major lobbying effort. But we need to get the facts out on the table so people understand" what the trade agreement means.

Florida FTAA Inc., a month-old nonprofit chaired by Florida Secretary of State Katherine Harris and based in the Biltmore Hotel in Coral Gables, is creating support to bring the FTAA headquarters to Miami and to convince the Florida delegation in Washington that the state supports the treaty.

Mr. Petterson said his company, a US-based global competitor with half of its sales coming through overseas exports, is trying to build public support and backing within its own firm by telling Caterpillar employees the advantages company management sees from a trade agreement.

"Our own blue collar workers saw the FTAA as a threat," he said. "So we are spending time educating our people. We tell them once the market expands, production will also increase, creating more jobs. It seems the business community is not good at educating the public."

The Latin American headquarters of Caterpillar are at Waterford at Blue Lagoon. The Fortune 100 firm also has a distribution center in Miami.

Caterpillar, a leading US exporter with $5.2 billion from US exports only, has more than 100 manufacturing plants worldwide and more than 68,000 employees, Mr. Petterson said. The Peoria, IL-based company generates about $20.18 billions in sales and $1.5 billion in profits, he said.

Signing the free trade treaty, with a 2005 self-imposed deadline, would open countries’ borders to a market of 800 million consumers.

"It will produce a higher domestic growth in the hemisphere," Mr. Petterson said, "of about a 11/2% per annum."

Investment, he said, would start pouring into countries to finance construction of the infrastructure needed to support expanded trade. A larger offer of products would produce "cheaper prices and keep inflation in check," he said.

The treaty, Mr. Petterson said, would need to be carefully drafted to lessen possible disadvantages such as the "dislocation of some sectors less developed that may have a hard time when the borders open."

He said other issues to watch for are reactions from labor, non-tariff barriers and a rethinking of regional treaties such as the 1991 Mercosur pact among Brazil, Argentina, Paraguay and Uruguay, and the dynamics among the Andean Community block formed by Bolivia, Colombia, Ecuador, Peru and Venezuela.

He said FTAA negotiators should address anti-trade groups’ concern such as labor laws, environment and sovereignty. The US, he said, must also place anti-dumping proceedings on the table and give public access to the now government-to-government negotiations while anti-global arguments must be countered with facts.

Treaty opponents include US labor unions, environmentalists, sugar growers, farm and textile groups and trade unions representing steelworkers and others seeking protection from foreign competition, observers said.

The plan, with more than $1 trillion in commerce at stake, is being jeopardized by interest groups such as the American Sugar Alliance and the Florida Fruit & Vegetable Association, which are lobbying against allowing cheaper imports from Brazil, Peru, Ecuador and Central America, backers said.

Mr. Petterson said it is fundamental for US legislators to give the president the authority to negotiate the treaty.

"Foreign governments will not negotiate with the US if we do not have fast-track authority," he said. "No one wants to negotiate if they think they will have to come before the Congress to negotiate it again."