Unveiling "NAFTA for the Americas"
by Public Citizen: Global Trade Watch
NAFTA + WTO = FTAA
from Stop FTAA website http://www.stopftaa.org/
What is "FTAA"?
The Free Trade Area of the Americas (FTAA) is the formal name
given to an expansion of NAFTA (the North American Free Trade
Agreement) that would include nearly all of the countries in the
western hemisphere. This massive NAFTA expansion is currently
being negotiated in secret by trade ministers from a total of
34 nations in North, Central and South America and the Caribbean.
The goal of the FTAA is to impose the failed NAFTA model of increased
privatization and deregulation hemisphere-wide. Imposition of
these rules would empower corporations to constrain governments
from setting standards for public health and safety, to safeguard
their workers, and to ensure corporations do not pollute the communities
in which they operate. Effectively, these rules would handcuff
governments' public interest policymaking and enhance corporate
control at the expense of citizens throughout the Americas. FTAA
would deepen the negative effects of NAFTA we've seen in Canada,
Mexico and the U.S. over the past seven years and expand NAFTA's
damage to the other 31 countries involved. The FTAA would intensify
NAFTA's "race to the bottom": under FTAA, exploited
workers in Mexico could be leveraged against even more desperate
workers in Haiti, Guatemala or Brazil by companies seeking tariff-free
access back into U.S. markets. A quick look at NAFTA's legacy
reveals disastrous consequences:
An estimated 395,000 U.S. jobs have been lost since NAFTA
as companies relocated to Mexico to take advantage of the weaker
labor standards. These workers usually find jobs with less security
and wages that are about 77% of what they originally had.
The U.S. trade surplus with Mexico has become a deficit for
the first time.
Despite promises of increased economic development throughout
Mexico, only the border region has seen intensified industrial
activity. Yet even this small "gain" has not brought
prosperity. Over one million more Mexicans work for less than
the minimum wage of $3.40 per day today than before NAFTA, and
during the NAFTA period, eight million Mexicans have fallen from
the middle class into poverty.
In addition, the increase of border industry has created worsening
environmental and public health threats in the area. Every day,
44 tons of hazardous waste are disposed of improperly. In this
time, birth defects have increased dramatically. In the first
year of NAFTA in one Texas border county, 15 babies were born
without brains -- an unprecedented 36% increase from the year
Along the border, the occurrence of some diseases, including
hepatitis, is two or three times the national average, due to
lack of sewage treatment and safe drinking water.
Although it's hard to imagine that anyone would push for more
of a failed model like this, what little we do know about FTAA
is that is likely to look quite a bit like NAFTA. In fact, some
FTAA texts are reported to be literally based on NAFTA, with additional
countries added in. We know what results to expect!
Who is involved in the FTAA negotiations, and how did it get
High on their NAFTA victory, U.S. officials organized a Summit
of the Americas in Miami in December 1994. Trade ministers from
every country in the western hemisphere (except for Cuba) agreed
to launch negotiations to establish a hemispheric free trade deal.
After the "Miami Summit," however, little more was done
on FTAA until the "Santiago Summit" in Chile in April
1998. However, at this second summit the 34 nations set up a Trade
Negotiations Committee (TNC), consisting of vice ministers of
trade from every country and headed by Dr. Adalberto Rodriguez
Giavarini of Argentina. Negotiators also agreed on a structure
of nine working groups to deal with the major areas they agreed
to cover under FTAA: agriculture, services, investment, dispute
settlement, intellectual property rights, subsides and anti-dumping,
competition policy, government procurement and market access.
You would never know it from news reports, but since late 1999,
the working groups have been meeting every few months to lay out
their countries' positions on these issues and try to develop
As with the Multilateral Agreement on Investment (MAI), many
Members of Congress have no idea this is even going on. Congress
has set no goals for the U.S.'s participation in these talks and
has not delegated to the Executive branch its Constitutional role
of setting the terms of international commerce. However, a variety
of corporate committees do advise the U.S. negotiators; under
the trade advisory committee system, over 500 corporate representatives
have security clearance and access to FTAA NAFTA expansion documents.
Organizations such as the Organization of American States (OAS),
Inter-American Development Bank (IDB), and the UN Economic Commission
for Latin America and the Caribbean (ECLAC), collectively known
as the "Tripartite Committee," also provide direction.
Early on, non-governmental civil society organizations (NGOs)
demanded working groups on democratic governance, labor and human
rights, consumer safety and the environment. These were rejected,
and instead a Committee of Government Representatives on Civil
Society was established to represent the views of civil society
to the TNC. Yet this committee is little more than a mail in-box.
It has no mechanism to incorporate civil society concerns and
suggestions into the actual negotiations, so these are mainly
The U.S. is represented by the U.S. Trade Representative's
office (USTR), headed by Charlene Barshefsky as of November 2000.
The lead USTR negotiator on FTAA is Peter Allgeier.
What will FTAA's practical effects be?
Because negotiations are occurring in secret and no texts
have been made publicly available, we cannot know the details
of the draft text. However, our conversations with the USTR have
given us some clues about what to expect once a final agreement
is unveiled -- in other words, once it's too late to change it!
Essential Social Services Endangered: The FTAA will contain
a series of commitments to "liberalize" services, which
is much like the General Agreement on Trade in Services (GATS)
within the WTO. "Services" is a broad category that
includes education, health care, environmental services (which
can include access to water!), energy, postal services and anything
else we pay for that isn't a physical object. Possible effects
of the FTAA services agreement include:
removal of national licensing standards for medical, legal
and other key professionals, allowing doctors licensed in one
country to practice in any country, even if their level of training
or technological sophistication is different;
privatization of public schools and prisons in the U.S.,
opening the door to greater corporate control, corruption and
the temptation to cut critical corners (such as medical care
for inmates or upkeep of safe school facilities) in the interests
of improving profit margins; and
privatization of postal services transferring U.S. Postal
Service functions to a few delivery companies like FedEx, which
could then send postal rates through the roof.
Investment and a Backdoor MAI: FTAA NAFTA expansion provides
a potential "back door" for the Multilateral Agreement
on Investment (MAI), through negotiations focused on investments
and in the financial services sector. We didn't call the MAI "NAFTA
on steroids" for nothing! MAIN is based on NAFTA and direct
NAFTA expansion is just another way to impose these rules. Like
in NAFTA's Chapter 11, the USTR says that FTAA will include "investor-to-state"
suits. These allow corporations to sue governments directly for
the removal of standards or laws designed to protect public health
and safety, which may cost the corporations a little more in operating
costs. In other words, the FTAA would provide a hemispheric "regulatory
takings" clause that explicitly values corporate profits
over human costs. NAFTA cases that set a likely precedent for
FTAA actions under this provision include:
The Canadian funeral home chain Loewen Group used NAFTA investor
protections to sue the U.S. government for $750 million in cash
damages after a Mississippi court found Loewen guilty of malicious
and fraudulent practices that unfairly targeted a local small
business. (NAFTA permits companies to sue governments over rulings
or regulations that may potentially limit their profits.) Loewen
argues that the very existence of the state court system violates
its NAFTA rights.
The U.S.-based Ethyl Corporation forced Canada to pay $13
million in damages and drop its ban on the dangerous gasoline
additive MMT, a known toxin that attacks the human nervous system.
Other regulations protecting public health and the environment
remain open for attack under NAFTA and FTAA.
In a similar case, U.S.-based Metalclad Corp. sued a Mexican
state to allow a toxic waste disposal site, claiming that the
environmental zoning law forbidding the dump constituted an effective
seizure of the company's property a seizure that, under
the property rights extended by NAFTA (and to be perpetuated in
FTAA), requires that the offending government compensate the company.
Food, Agriculture & GMOs: The U.S. is trying to force
all countries to accept biotechnology and genetically modified
(GM) foods in which unregulated U.S.-based corporations have taken
a lead. Yet food security organizations all over the world agree
that these technologies will increase hunger in poor nations.
Being forced to buy expensive patented seeds every season, rather
than saving and planting their own, will force traditional subsistence
farmers in the developing world into dependency on transnational
corporations and closer to the brink of starvation. If the U.S.
position wins out, FTAA will promote the interests of biotech
and agribusiness giants like Archer Daniels Midland (ADM), Cargill
and Monsanto over the interests of hungry people in developing
Intellectual Property Rights (IPR): The U.S. is trying to
expand NAFTA's corporate protectionism rules on patents to the
whole hemisphere. These rules give a company with a patent in
one country the monopoly marketing rights to the item throughout
the region. These rules are enforced with cash fines and criminal
penalties, making these rules even harsher than the WTO IPR rules.
These rules have been used as justification for pharmaceutical
companies to quash compulsory licensing mechanisms to allow competitor
companies to manufacture a drug in exchange for a fee for "renting"
the patent. This monopoly control allows pharmaceutical corporations
to keep drug prices high and block production of generic versions
of life-saving drugs, which spells disaster for the ill and impoverished,
especially in developing nations. These rules also allow companies
to "bioprospect" and lock down patents for traditional
medicines that are considered "traditional knowledge,"
effectively robbing indigenous people of their cultural heritage
to fatten corporate wallets.
What is the current status of the FTAA negotiations?
All the negotiating groups have held meetings at two to three
month intervals throughout 2000. Negotiators have laid out the
positions of their governments on the nine core issues. As of
fall 2000, they are in the process of consolidating proposed text
to find points of agreement among the governments. A complete
"bracketed" (draft) text will be ready in December 2000.
Vice ministerial level meetings on FTAA NAFTA expansion will begin
in early 2001. The next ministerial-level Summit of the Americas
is planned for Quebec City, Canada on April 18-22, 2001, at which
negotiators will start building a whole text. The agreement is
to be complete and implemented in 2005.