Bush proposes free trade zone to encourage Latin American democracies

(LIMA, Peru) - President Bush has a ``warm spot in his heart'' for like-minded Central American leaders and wants to reward their peaceful democracies - unthinkable just a decade or so ago - by

Sunday, March 24th 2002, 12:00 am

By: News On 6

(LIMA, Peru) - President Bush has a ``warm spot in his heart'' for like-minded Central American leaders and wants to reward their peaceful democracies - unthinkable just a decade or so ago - by creating a free-trade zone linking the region to the United States.

On the eve of Bush's Sunday visit to the capital of El Salvador, his national security adviser, Condoleezza Rice, said Bush's agenda there is a simple one: trade and democracy.

Bush is on the ground in San Salvador for just under six hours from touchdown to takeoff with a couple helicopter shuttles in between. But it will be time enough ``to really celebrate a region that 10, 15 years ago, nobody would have given a chance to be living at peace,'' Rice said Saturday.

Over a quick lunch with the leaders of El Salvador, Belize, Guatemala, Nicaragua, Costa Rica, Honduras and Panama, Bush planned to underscore his intent to make the long uphill climb toward a U.S.-Central America free trade agreement.

As he said Saturday in Peru, ``I believe strongly that if we promote trade, and when we promote trade, it will help workers on both sides of this issue.

''... I mean, the best way for people to get lifted out of poverty is a job. And the best way to encourage jobs is through trade.''

But a special trade pact between Central America and its giant neighbor to the North remains just an idea.

Formal talks have yet to begin, or even be planned, and other trade agreements already in the works offer little by way of promising precedent.

Work on creating the hemisphere-wide Free-Trade Area of the Americas agreement that President Clinton proposed in 1994 is proceeding toward its 2005 target date for completion. But, as long as Congress stubbornly withholds special negotiating authority for the president, would-be partners in the FTAA remain skeptical about its prospects.

The so-called trade promotion authority for Bush passed the House last year but is bottled up in the Democrat-controlled Senate.

Bush sees trade as the ``next phase'' of progress for a region that, not long ago, was wracked by war and revolution, Rice said.

``The president has a very warm spot in his heart for the Central American presidents who, despite very, very difficult odds, where most of them were living in countries that were in civil war just a few years ago, are really making a tremendous effort to make life better for their people,'' Rice said.

The attention is welcome and leaders here have eagerly seized on the promise Bush held out to the region when, in January, he first proposed a free trade treaty with Central America.

Salvadoran President Francisco Flores said Bush's announcement meant ``a new era of economic prosperity'' for El Salvador.

``Just the announcement by the president will cause investors to approach our countries to be in the region when the treaty takes effect,'' he said.

Business leaders have gathered to discuss the prospect of trade advancements this visit by Bush might spark. And the region's finance ministers have met in Washington, in El Salvador and in Nicaragua to prepare.

There was even a preliminary summit in Nicaragua last month by the region's presidents - preceded by talks among their foreign ministers - on what to say to Bush.