A Free Trade Area of the Americas agreement, which would open borders to trade from Canada to the tip of Argentina, and every democratically run island country along the way, has been in the United States' sights since for years.
Meeting for the first time in Miami, leaders of the 34 democracies of the Western Hemisphere agreed to complete trade negotiations by 2005.
The next such meeting will be in Miami Nov. 16-21, and some observers said the air of optimism generated by the CAFTA talks in Houston will carry over.
"I think it's a steppingstone on the way to FTAA," said Randall Baker, professor of public affairs at Indiana University in Bloomington.
Some observers also believe the United States can go into the Miami FTAA talks confident it can reach a hemispheric agreement because it already has trade deals, or soon will, with nine countries.
The United States has trade agreements with Canada and Mexico through the North American Free Trade Agreement, signed in 1993, and Congress approved an agreement with Chile in August.
In January, the United States will begin negotiating with the Dominican Republic, the latest addition to CAFTA, which is made up of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. CAFTA's next and final round of talks are in Washington, D.C., in December.
"From the point of the view of the United States, we're trying to use this as the pattern, so when we do the FTAA, this gives us leverage to structure it the way we want it," said Thomas DeGregori, a University of Houston economics professor.
Ever since the World Trade Organization talks failed, first in Seattle and then most recently in Cancun, Mexico, the United States has made an effort to seek smaller agreements outside of the global group.
In addition to Chile, the United States has reached a trade agreement with Singapore and is pursuing trade agreements with Australia, Morocco and the five member countries of the Southern Africa Customs Union.
The United States' trade representative, Robert Zoellick, walked away from the failed Cancun talks saying the United States would work on regional and bilateral trade agreements with countries that had a "can-do" attitude. A group of what Zoellick characterized as "can't do" developing countries, led by Brazil and India, helped destroy those talks because of their disapproval of agricultural subsidies in Japan, the United States and the European Union.
While Costa Rica, El Salvador and Guatemala were part of that rebel group in Cancun, they softened their stance under pressure from the United States before coming to the Bayou City, according to trade experts and observers.
For the Central American countries involved, CAFTA will be of benefit because it will allow their exports greater access to the huge U.S. market and attract foreign investment, said Peter Morici, a professor of international business at the University of Maryland in College Park.
Once here, they agreed to allow some less controversial U.S. agricultural products into their region duty-free. Those items included sweet corn, cherries, apples, pears and wine. But they didn't include maize, which Central Americans worry could destroy their production because U.S. corn is backed by government subsidies.
Negotiators didn't reveal their discussions about sugar, which is a heated issue for the powerful U.S. sugar lobby. Central Americans want to be able to export more of their sugar to the U.S. market, which pays higher prices than the world market.
Agriculture will likely continue to play a divisive role in the FTAA discussions, especially since Brazil is one of the negotiating partners in the accord.
But through the agreement with Central America and Chile and the 1994 trade deal with Mexico through the North American Free Trade Agreement, the United States has a chance of convincing Brazil to ink an accord.
Trade agreements bring prosperity, and that should attract Brazil's attention, Morici said.
"The best thing the United States can do to sort of change Brazil's view of things is to help other economies in the region to succeed."
Chronicle reporter Bill Hensel Jr. contributed to this story.
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