Trade
Marches On
By
Harriet Mullaney
Two major trade agreements, currently being
negotiated, will define the Western Hemisphere: the Central American
Free Trade Agreement (CAFTA) and the Free Trade Area of the Americas
(FTAA). CAFTA will delineate U.S. trading relationships with Guatemala,
Nicaragua, El Salvador, Costa Rica, Honduras, and the Dominican Republic
(recently included), with negotiations scheduled for completion by
yearend. FTAA, intended for enactment in 2005, will encompass all
nations with the exception of Cuba. Both agreements seek to extend
the neoliberal principles of the North American Free Trade Act (NAFTA)
that governs trade among the U.S., Canada and Mexico.
This summer I spent five weeks in El Salvador and, as with previous
travel to Guatemala and Mexico, I was struck by the stark contrast
in people’s awareness of these agreements. Most in the U.S.
are familiar with NAFTA, but few know much about CAFTA or FTAA. In
Mexico and Central America, trade agreements such as these are viewed
as further perpetuation of the conquest that has been endured for
500 years. They represent one more instance where the economic interests
of outside parties take precedence over their rights to self-determination
and development on their own terms.
Dr. Raúl Moreno, professor of economics at the University of
El Salvador and president of the Consumer Defense Center, spoke at
a conference I attended on “Migration, Labor Rights and Free
Trade”. Dr. Moreno rebuked any notion that CAFTA offers the
prospect of meaningful economic integration because it does not seek
to address the fundamental daily issues facing people, but rather
caters to the needs of the business elite. He identified five crucial
areas in the negotiations: access to markets; subsidies; privileges/advantages
to foreigners; impact of privatization on social services; and foreign
ownership/management. Critics of both agreements
alike agree on the negative consequences:
Privatization of public services – Privatization
of water, education, healthcare, telecommunications and energy will
result in higher prices and poorer, worsened working conditions,
unemployment, and, in many cases, increased migration.
Increased corporate power, erosion of democracy
and lack of transparency – Transnational corporations will
gain disproportionate power. Lack of participation by broad segments
of society and lack of transparency in the negotiations already
have weakened notions of democratic participation.
Destruction of agriculture and small farmers –
Removal of tariff barriers will adversely affect local farmers and
destroy agriculturally based economies.
Weakening of laws protecting workers’ rights
and the environment – Labor standards, environmental regulations
and enforcement mechanisms will be undermined further.
Many view NAFTA and CAFTA as stepping-stones toward
the full FTAA, a conclusion made more real by recent agreements
with Chile and Singapore that go beyond NAFTA in certain areas:
lack of enforceable protections for workers and the environment;
restrictions on access to generic medicines; use of capital controls
forcing investors to maintain balances in a country for a specified
period; and setting of immigration policies for thousands of professional
and service workers without adequate worker protections. The last
issue is not even one on which Trade Promotion Authority (the new
name for Fast Track) gives authority. Both agreements were passed
by the House and Senate in July and signed by the President on September
3. The only members of the Colorado delegation to vote against the
bills were Reps. Hefley and Tancredo.
In early August, the President announced his intent
to integrate the Dominican Republic into CAFTA, a move supported
by the five Central American trade ministers. The Dominican Republic
currently represents 43% of U.S. trade volume with Central America.
Its inclusion in CAFTA will create the second largest U.S. trading
partner in Latin America, behind Mexico. On its webpage, the Office
of the U.S. Trade Representative clearly states that, “The
Dominican Republic is…working closely together with the U.S.
to push for ambitious market-opening results in ongoing World Trade
Organization (WTO) and…FTAA negotiations.”
One wonders if this momentum can be stopped. Three
more negotiating rounds remain for CAFTA and the thorniest issues
are being saved for last: agricultural and textile sectors representing
the highest volume of exports; labor rights; and environmental protections.
Costa Rica has been persistent in stating that it will not sell
off its well functioning public telephone system. This affront to
privatization will undoubtedly define the outcome of the negotiations.
While I was in El Salvador, the Trade Negotiations
Committee of the FTAA met. As I learned from personal experience,
bus routes were changed to keep the public at bay and security in
the area ran high. Various members of Salvadoran civil society protested
the event although their presence did not deter the talks. Ángel
Ibarra of SINTI TECHAN, a network supporting inclusive economic
alternatives, predicted that the FTAA talks would ultimately fail
because of resistance by el pueblo (the people). He felt that assertions
by Brazil, Venezuela and Columbia against the agreement and resistance
in Central America to the neoliberal model would ultimately defeat
the FTAA. But the process continues, and the FTAA Ministerial will
meet in Miami in November.
While the WTO is not directly involved in CAFTA
and FTAA negotiations, it exerts its own force on the outcomes.
The WTO will be holding its Ministerial where the “Agreement
on Agriculture” will be debated in Cancun, Mexico in September.
Tariffs, subsidies, and the protection of intellectual property
rights will be part of the discussion, and decisions on these issues
within this forum will impact regional trade discussions. The WTO
is often considered the most powerful and dominant international
governance institution. Its mandate is trade liberalization and
its power structure controls capital, which returns us to the starting
premise that agreements like NAFTA, CAFTA and FTAA run counter to
genuine efforts toward self-determination and human development.
The work of justice is never easy.
What You Can Do:
The most important thing is to stand in solidarity
with members of civil society, realizing that our stance can be
an active one. Congress’ hands are pretty well tied by the
President’s Trade Promotion Authority, but that does not reduce
our responsibility to let members know how we feel on the subject
of free trade in the Americas as they ultimately hold the deciding
vote. We can also contact the Office of the U.S. Trade Representative
to express our views on free trade agreements (contactustr@ustr.gov
or phone 202-395-5190). Organizations that track these issues closely
and offer opportunities for participation include: Global Exchange
www.globalexchange.org and the Committee in Solidarity with
the People of El Salvador www.cispes.org.
See the separate announcement in this issue on the protest against
the FTAA in Miami.
Related Articles:
Silver Lining to Free Trade in the
Americas (September 2003)
Free Trade for
Whom? (April 2003) |
