Apr 012001

Whose FTAA? Rocky Mountain Bullhorn, 1 April 2001

Amory Starr

Why can’t we leave all the complicated economics to the professionals? Because these agreements affect not only “trade”, but every aspect of life. Despite this, the “free trade agreements” (NAFTA, GATT/WTO, and the pending Free Trade Area of the Americas, FTAA) are crafted in secret, with input only from multinational corporations. Citizen organizations of all kinds are kept out, as are our elected representatives. It’s time for everyone to learn how, and for whom, free trade agreements work.

What’s a “tariff”? Under NAFTA, Mexico was forced to drop import tariffs designed to protect the national corn market. This meant that subsidized American corn could be sold in Mexico under the price of production, driving millions of small-scale Mexican corn farmers out of business. Now they stand outside the border sweatshops, hoping for a job that used to be worked by a unionized American. Welcome to the global economy! The FTAA demands all tariffs to be dropped to “facilitate trade”, but for Caribbean countries tariffs are a main source of income with which to pay their crushing debts to the IMF and World Bank.

What’s a “non-tariff barrier”? Well, 80% of existing US environmental laws. In the eyes of international trade lawyers, most environmental regulations, product safety laws, and labor laws are just “excuses” to unfairly “discriminate” against imports from countries which lack these standards. Their corporate clients increase profit margins by externalizing costs on vulnerable workers, the environment, and increasingly dangerous products. The “dispute resolution” process used in these cases is designed to drop to the lowest of international standards.

While “harmonization” usually means internationalizing the lowest standards, sometimes “harmonizing” upward is what is needed to deliver ever more control into the hands of the relatively few international corporations while undermining small businesses everywhere. Under pressure from the WTO, the Indian Congress made a new “health and safety” law requiring cooking oil to be packaged. Overnight, this wiped out millions of tiny entrepreneurs, who sold cooking oil into people’s own containers but could not afford to seal it in disposable packaging.

Isn’t “foreign investment” good for the third world? Under the various names of NAFTA chapter 11, MAI, TRIMS in the WTO, and expected to be included in the still-secret FTAA agreement, free trade in investments gives corporations the right to sue countries if regulations “take” their “expected” profits. They call such “regulatory takings” illegal “expropriation of investor assets”. First world nations’ bans on unsafe products unfair hamper “investment”. Third world countries are being required to revise their sovereign Constitutions, often eliminating land reform laws and resources held in trust by the nation, to conform to WTO rules.

Since the GATS has made little progress in the WTO, it is being folded into the FTAA, so that countries will be forced to privatize now-public “Services” such as transportation, education, healthcare, prisons, parks and historic sites, water, postal, police, and fire departments. Multinational corporations will have the right to bid for and buy a nation’s entire water or education systems and then charge fees for use! Everything we think of as a right will soon be a commodity.

Lest you believe that the drawbacks of free trade are a necessary evil of the marvelous economic growth machine, be perfectly clear that these policies have been enforced on third world countries since the early 1980s in the form of “structural adjustment”, with measurably disastrous results. Inequality has increased within every country of the world as well as on a global level. Since the 1994 implementation of NAFTA, 3 million American jobs have been lost, 8 million middle class Mexicans have fallen into poverty, and (according to the UN) a third of Mexicans can no longer afford to meet daily caloric requirements as Mexican wages have fallen 80% and 35,000 small businesses have been destroyed.

These are just a few of the outrageous, but real, projects of the beguilingly misnamed “free trade” regime. Fortunately people all over the world are wising up and rising up.