Liberation from high tariffs would also make a difference for Caterpillar Inc., the world's largest maker of earth-moving equipment. Worse, though, are delays at customs that make it difficult for Caterpillar to honor its sales promise to deliver replacement parts within 24 hours. In Latin America, the benefits of unfettered trade will fall unevenly. Chile, for example, was the first Latin American country to begin tearing down its tariff walls in the late 1970s, and it suffered heavy job losses as domestic industries lost ground to imports. Despite recent problems, Chile's growth rate remains one of the highest in Latin America.
Brazil is another story, though.
Latin America's biggest economy has lagged others in the region in opening its market. Yet Brazil, for all its concerns, seems to realize that some sort of free trade area is desirable. Brazilian taxpayers can't go on subsidizing and protecting less-efficient industrial sectors. Meanwhile, other members of Mercosur may dash Brazil's hopes of presenting a united front in FTAA talks. Yet El Salvador sees the FTAA less as a threat than as a tool to attract investment and thus break its dependence on foreign aid and remittances from Salvadorans working abroad.