Compensatory regional policies in the framework of economic integration: reflections on the Free Trade Area of the Americas, Free Trade Agreements and Mercosur

The main premise of this paper is related to the fact that the Free Trade Area of the Americas (FTAA or ALCA in Spanish), as an ambitious project of commercial openness, will have an enormous impact on the re-localisation of productive activities. This will therefore affect the less developed regions in the member countries. That is why, as it has been demonstrated by the experience in the European Union, it is necessary to establish compensatory policies through the creation of Regional Funds. These will allow some regions to alleviate the impact of the commercial aperture. Taking into account the way in which this issue had been addressed during the FTAA negotiations, this paper examines the convenience of establishing or not a free trading zone in the Western Hemisphere.