Corporate Rule for the Western Hemisphere?
by Mark Swier, Alliance for Global Justice
50 Years Is Enough newsletter, April 2001
With the World Trade Organization (WTO), the International
Monetary Fund (IMF), and World Bank now pulled out from under
their respective rocks and into the light, students, environmentalists,
labor activists and progressive religious institutions are in
high gear in the movement against corporate-driven globalization.
But trade and investment policymakers have yet another neoliberal
project up their sleeve: the Free Trade Area of the Americas (FTAA).
As if the corporate-driven agenda of the North American Free Trade
Agreement (NAFTA), which covers the U. S., Canada, and Mexico,
wasn't bad enough for labor, the environment and democratic sovereignty,
magnify it ten times and we've got an idea of what the FTAA has
The links between trade treaties like the FTAA and the IMF
and World Bank are clear. The international financial institutions
serve as "shock troops" for the trade and investment
negotiations, by creating huge debts and liberalizing economies
through structural adjustment. It was the global business environment
created by the enforced liberalization of the IMF that set the
stage for corporate demands for a more powerful enforcer of trade
rules, hence the WTO. The FTAA, like NAFTA, is another attempt
to "lock in" the gains already achieved by corporations
over national governments and people's interests.
The goal of trade negotiators, business leaders and policymakers
working on the FTAA is to unite the 34 capitalist countries in
the Western Hemisphere (i.e. all but Cuba) into one big free-for-all
market for the wealthy and powerful. Perhaps the clearest indication
of what the real priorities are for the FTAA trade negotiators
lies in the symbiotic relationship they have with the Americas
Business Forum. The ABF was formed in 1996 specifically to provide
a mechanism for corporations throughout the Americas to exert
influence on the FTAA process, and includes over 1,000 of the
hemisphere's business leaders. The ties between the ABF and the
negotiators are remarkably open: the ABF has exclusive rights
to table recommendations at all Trade Minister meetings, and to
control the direction of the different negotiating groups. In
1997, the Interamerican Regional Organization of Workers (ORIT)
proposed the establishment of an Americas Labor Forum to have
a similar voice in the FTAA process; that proposal was rejected.
At the IMF, World Bank and WTO, the absence of public participation
correlates to programs with a decisive pro-corporate, anti-people
bias. It is alarming, then, that the negotiating process for the
FTAA has been conducted in secret: no complete draft of the FTAA
agreement has been released, and there has been no role for civil
An analysis of the FTAA as a "shell game" for the
failed Multilateral Agreement on Investment (MAI) may explain
the FTAA's reluctance to open its doors and "liberate the
text." The MAI was defeated in 1998 after public pressure
exposed its profit-over people agenda. Since then components of
the MAI have been popping up in other venues, such as the IMF.
The American Electronics Association, part of the ABF, explicitly
suggested that the FTAA "draw upon the principles of the
MAI." According to Public Citizen's Global Trade Watch, the
investment chapter of the proposed FTAA will be virtually the
same as the MAI, which is often referred to as "the investors'
bill of rights" because it would have denied governments
and citizens the rights it accorded to corporations and investors.
Further liberalization of investment simply means more power in
the hands of corporations, at the expense of democracy. NAFTA's
policies have led to higher unemployment, lower wages, inhumane
working conditions, increased privatization of public resources,
and environmental destruction.
Acting Assistant Secretary of State Bryan Samuel recently
highlighted the neoliberal illusion that open markets, deregulation
and privatization necessarily yield prosperity: "Through
the reduction of trade barriers and the institution of fixed and
clear rules, the FTAA will strengthen the values of openness,
accountability, and democracy." But as Mexico, East Asia
and Brazil have seen recently, decreasing capital controls and
deregulating foreign investments are a recipe for economic crisis.
Even prominent mainstream economists like Paul Krugman, Jeffrey
Sachs and former World Bank chief economist Joseph Stiglitz have
now spoken out on the need for capital controls to ensure stability.
Already Chapter 11 of NAFTA-which extends new rights to investors
to sue for "discriminatory" trade barriers (such as
the banning of products for environmental reasons) -has facilitated
hundreds of "investor-state dispute resolutions," or
corporate lawsuits for hundreds of millions of dollars against
national and state governments. In one high profile case, the
Canadian corporation Methanex initiated a suit against the state
of California last year for $970 million after the governor banned
the gasoline additive MTBE in the interest of preventing the contamination
of ground and well water.
The FTAA would magnify the principle of "national treatment"
in which NAFTA's investment rules are based. "National treatment"
requires governments to foreign investors the same investment
status that they give domestic enterprises, belying y efforts
to foster sustainable local investment and development. In Mexico
since NAFTA's inception, "national treatment" as contributed
to the market being flooded by cheap genetically-modified hybrid
corn from the U.S., putting thousands out of work. The FTAA Business
forum has also called for the elimination of "performance
requirements" which require corporations to hire local workers,
locate headquarters regionally, and associate with local investors
so that local economies can benefit from trade. The FTAA negotiators'
expressed goal is to "level the playing field" for corporate
investors, but what is equal about pitting elephants against ants?
The language of neoliberalism is the only voice heard in the
FTAA process. Translated, it means far more power for corporations
and investors, and far less power for people. It is a threat to
democracy. For indigenous and impoverished people, women and the
environment, the FTAA would make things worse. The FTAA would
hack away the sovereignty of governments in favor of corporate
profit, and takes a further step toward a homogenous neoliberal
world order, where people have little or no input into decision-making,
no self-management and no empowerment.
But despite the efforts of FTAA and business-sector negotiators,
the negotiations haven't gone completely unnoticed by civil society
groups. Since 1997, civil society groups have organized "People's
Summits" to parallel the FTAA official negotiations. These
summits have brought together thousands of delegates each year,
out of which came the idea to form a broader alliance of all the
labor, NGOs, trade unions and environmental groups represented.
The Hemispheric Social Alliance (HSA)was formed in March 1999.
The HSA's working document entitled, "Alternatives to the
Americas," represents both a necessary critique of trade
liberalization policies and a viable, people-based alternative
to the neoliberal model. In addition to the HAS, activists across
the progressive/radical spectrum are organizing to oppose the
FTAA, and will be out in force at the Trade Ministers' meeting
in Buenos Aires, Argentina from April 6-7 and the meeting of heads
of government at the "Summit of the Americas" in Quebec
City, Canada, from April 20-22.
The April meetings do not represent the end of the road for
the FTAA negotiations, but rather a "check-in" point.
The target date for a final agreement is 2005, though it may come
sooner. Activists know they cannot at: ford to wait until another
disastrous trade deal is signed, sealed, and delivered, so people
are mobilizing all over the hemisphere to educate and stage solidarity
actions in the month of April with those in Buenos Aires and Quebec
The movement against corporate-capitalist globalization is
concentrating its energies against the FTAA, and dozens of campaigns
have sprung up in the past couple months. Teach-lns are being
planned, coalitions are forming, road shows are traversing the
country, and we are filling our ranks with creativity and collective
resistance. Things are building at all levels, locally, nationally
and hemisphere-wide and across the spectrum of political orientation...
/ FTAA page