Later this month, on November 20 and 21,
government and business officials from 34 countries in North,
Central, and South America will gather behind closed doors
in Miami, Florida, to discuss a proposed trade agreement called
the Free
Trade Area of the Americas (FTAA). If it is enacted, it will
create the largest trading bloc in the world, with a combined
GDP (gross domestic product) of $11.4 billion and with a population
of about 800 million people.
It is telling that of those 800 million, only a select few
hold the power to make these massive decisions. The FTAA will
override local, state, and national laws. Content aside, the
way the agreement is being formed has been widely criticized
by many, including the Nobel Prize winning economist Joseph
Stiglitz, as being profoundly anti-democratic.
The FTAA is a vast expansion of the 1992 North American Free
Trade Agreement (NAFTA) between the United States, Canada,
and Mexico. Like the FTAA, NAFTA was crafted mostly in secret,
the only non-governmental input coming from corporations.
The Labor Advisory Committee (LAC), which, according to the
1974 Trade Act, must have input on any trade-related subjects,
was given a copy of the lengthy agreement only 24 hours before
the deadline for their report. Even then, the LAC, consisting
mostly of moderate
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conservative union leaders, predicted in
their report that NAFTA, while a boon for investors, would
be extremely detrimental for the working classes of the US
and Mexico and for the environment as well. They also noted
that the agreement firmly protected property rights, but offered
little protection for workers’ rights.
The reservations of the LAC, shared by many economists and
financial watchdog groups, have clearly become reality in
the decade that NAFTA has been in place. By making it exponentially
easier for American companies in search of cheaper labor to
move their production to Mexico, thousands of U.S. workers
have lost jobs, while the influx of corporations in Mexico
have driven down the working wages by 52 percent.
According to the Canadian Labor Congress,
Mexican workers have been faced with a “huge decrease
in living standards and massive job losses,” which serves
as a “clear warning” of the “lethal dangers
of deregulatory international financial markets” and
to “integrating economies at different levels of development.”
Unfortunately, no one ever listens to Canada. The FTAA is
a mammoth version of NAFTA and does precisely
what the Canadian Labor Congress warns against
— massive market deregulation and integration of both
extremely powerful and fledgling economies.
Both US and foreign workers will suffer from its passage —
Americans will lose jobs as corporations look to other countries
as a source of cheap labor, and foreign economies will become
even less stable and more dependant on the U.S. as they are
flooded with American products. So why would anyone want to
enact this agreement if it will cause most people to lose?
Because one small group of people will win — corporations
and private investors. The FTAA will open the doors to many
markets that were previously inaccessible and it will also
allow companies to find cheap labor abroad. Furthermore, the
FTAA (like its predecessor, NAFTA) awards a huge amount of
rights to corporations, such as the right to actually sue
the governments of countries it believes to be interfering
with “free trade.” It alsostrengthens intellectual
property rights — which is actually antithetical to
the idea of free trade. Which tips us off that this is ultimately
less about the goal of strengthening economies through a free
trade arrangement, and more about strengthening corporations
through market dominance. Remember that the only other individuals
besides government officials allowed to contribute to the
agreement are a fraction of the population that will actually
profit from the FTAA.
But it has not happened yet. Although NAFTA has been in place
for a decade, the FTAA has yet to be agreed upon. And negotiations
have not gone as smoothly as the U.S. and others pushing for
it have expected. Brazil, which has the largest economy in
Central and South America, has strong reservations about the
agreement, the same issue which caused the collapse of the
recent WTO meeting in Cancun — U.S. farm subsidies and
its restrictions on certain imports, two actions which are
directly against the concept of a free market. Since FDR’s
New Deal, the U.S. has provided very generous subsidies (totaling
in the millions annually) to U.S. farmers (the money is supposedly
for “family farmers,” but the bulk of it generally
ends up going to large corporations), which makes it extremely
difficult for developing nations which cannot afford such
payments to its farmers to compete with the U.S. in a global
market. Additionally, the U.S. has a number of restrictions
on certain imports, such as beef and sugar — two of
Brazil’s main exports. Thus, Brazil would have to allow
the U.S. to flood its market without being able to compete
in the US. The “free market” that the U.S. government
heralds at every opportunity is not very free at all.