FTAA:

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 in store.

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 society groups.

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 City.

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...

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