The Free Trade Area of the Americas
and
the Threat to Social Programs,
Environmental Sustainability, and Social Justice
in Canada and the Americas
By Maude Barlow

Maude Barlow is the Volunteer Chairperson of The Council of Canadians, Canada's largest public advocacy group, and a Director with the International Forum on Globalization. She is the best-selling author or co-author of 12 books. Her new book is Global Showdown: How the New Activists are Fighting Global Corporate Rule, co-authored with Tony Clarke, published by Stoddart in February 2001.

Excerpted from: http://www.canadians.org/campaigns/campaigns-tradepub-ftaa2.html

The Free Trade Area of the Americas (FTAA), currently being negotiated by 34 countries of the Americas, is intended by its architects to be the most far-reaching trade agreement in history. Although it is based on the model of the North American Free Trade Agreement (NAFTA), it goes far beyond NAFTA in its scope and power. The FTAA, as it now stands, would introduce into the Western Hemisphere all the disciplines of the proposed services agreement of the World Trade Organization (WTO) - the General Agreement on Trade in Services (GATS) - with the powers of the failed Multilateral Agreement on Investment (MAI), to create a new trade powerhouse with sweeping new authority over every aspect of life in Canada and the Americas.

The GATS, now being negotiated in Geneva, is mandated to liberalize the global trade in services, including all public programs, and gradually phase out all government "barriers" to international competition in the services sector. The Trade Negotiations Committee of the FTAA is proposing a similar, even expanded, services agreement in the hemispheric pact. It is also proposing to retain, and perhaps expand, the "investor-state" provisions of NAFTA, which give transnational corporations unprecedented rights to pursue their trade interests through legally binding trade tribunals and even challenge every publicly funded service of governments, including health care, education, social security, culture and environmental protection.

As well, the proposed FTAA contains new provisions on competition policy, government procurement, market access and dispute settlement that, together with the inclusion of services and investment, could remove the ability of all the governments of the Americas to create or maintain laws, standards and regulations to protect the health, safety and well-being of their citizens and the environment they share.

Essentially, what the FTAA negotiators have done, urged on by the big business community in every country, is to take the most ambitious elements of every global trade and investment agreement - existing or proposed - and put them all together in this openly ambitious hemispheric pact.

Once again, as in former trade agreements like NAFTA and the WTO, this free trade agreement will contain no safeguards in the body of the text to protect workers, human rights, social security, health and environmental standards, or the life of local communities that are often hurt by the transfer of the community's economic assets to impersonal, distant, uninvolved and uncaring corporations. Once again civil society and the majority of citizens who want a different kind of trade agreement have been excluded from the negotiations and will be shut out of the deliberations in Quebec City in April 2001.

What Is the FTAA?

The Free Trade Area of the Americas is the name given to the process of expanding the North American Free Trade Agreement (NAFTA) to all the other countries of the Western Hemisphere except Cuba. With a population of 800 million and a combined GDP of $11 trillion (US), the FTAA would be the largest free trade zone in the world. If reports coming from the Negotiating Groups working on the key elements of the deal are correct, the FTAA will become the most far-reaching free trade agreement in the world, with a scope that will reach into every area of life for the citizens of the Americas.

From the beginning, the big corporations and their associations and lobby groups have been an integral part of the process. In the U.S., a variety of corporate committees advise the American negotiators and, under the Trade Advisory Committee system, over 500 corporate representatives have security clearance and access to FTAA negotiating documents. At the November 1999 ministerial meeting in Toronto, the Ministers of Trade of the Americas agreed to implement 20 "business facilitation measures" within the year in order to speed up customs integration.

Like NAFTA, the proposed agreement would prohibit "performance requirements" whereby foreign investment must enhance the local economy and support local workers. It is based on a model of trade and investment liberalization that locks in the Structural Adjustment Programs (SAPs) introduced earlier into Latin America by the World Bank and the International Monetary Fund (IMF). Under these programs, most developing countries were forced to

Pressure has been placed on obtaining a successful FTAA in the light of the defeat of the Multilateral Agreement on Investment (MAI) at the first ministerial meeting of the WTO in 1996 and at the Organization for Economic Cooperation and Development (OECD) in 1998, and the shut-down of the "Millennium Round" meeting of the WTO in Seattle in December 1999. In fact, WTO officials are finding it difficult to even secure a venue for a new Ministerial meeting. As well, APEC - the Asia Pacific Economic Cooperation Forum - is faltering and few have expectations that it will make the hoped-for breakthrough to become a free trade and investment zone. Many trade observers and pundits have identified the FTAA as the natural heir of these failed projects and are fearful that another such failure could put the whole concept of these massive free trade agreements on the back burner for years. In fact, in a January 2000 statement, Associate United States Trade Representative Peter Allegeier said that the FTAA has taken on new importance after the fiasco in Seattle and may well aspire to go further than the WTO, freed of the need to play the deals off against one another.

The "Miami Group" - the U.S., Canada, Argentina and Chile - are also intent on forcing all countries of the Americas to accept biotechnology and genetically modified foods (GMOs), thereby promoting the interests of biotech companies such as Cargill, Monsanto and Archer Daniels Midland over the survival needs of small farmers, peasants and communities throughout Latin America. Finally, reports Public Citizen, the U.S. is trying to expand NAFTA's corporate protectionism rules on patents to the hemisphere, rules that give a company with a patent in one country the monopoly marketing rights to the item throughout the region, thereby robbing local people of access to traditional medicines.

The agreement will give transnational corporations of the hemisphere important new rights, even in the supposedly protected areas of health care, social security, education, environmental protection services, water delivery, culture, natural resource protection and all government services - federal, provincial and municipal. Essentially, the FTAA will restrict government actions in regards to services through a set of legally binding constraints backed up by WTO-enforced trade sanctions. Its most fundamental purpose is to constrain all levels of government in their delivery of services and to facilitate access to government contracts by transnational corporations in a multitude of areas, including health care, hospital care, home care, dental care, child care, elder care, education (primary, secondary and post-secondary), museums, libraries, law, social assistance, architecture, energy, water services, environmental protection services, real estate, insurance, tourism, postal services, transportation, publishing, broadcasting and many others. If national treatment rights in services are included in the FTAA, all public services at all levels of government would have to be opened up for competition from foreign for-profit service corporations. This agreement would disallow any government or sub-national government from preferential funding to domestic service providers in services as diverse as health care, child care, education, municipal services, libraries, culture, and sewer and water services. For the first time in any international trade agreement, transnational service corporations will gain competitive rights to the full range of government service provisions and will have the right to sue any resistant government for financial compensation. That the real goal of this services/investment juggernaut is to reduce or destroy the ability of the governments of the hemisphere to provide publicly funded services (considered "monopolies" in the world of international trade).

NAFTA was the first international trade agreement in the world to allow a private interest, usually a corporation or an industry sector, to bypass its own government and, although it is not a signatory to the agreement, directly challenge the laws, policies and practices of another NAFTA government if these laws, policies and practices impinge on the established "rights" of the corporation in question. Chapter 11 gives the corporation the right to sue for compensation for lost current and future profit from government actions, no matter how legal these actions may be or for what purpose they have been taken. For example, Chapter 11 was successfully used by Virginia-based Ethyl Corp. to force the Canadian government to reverse its legislation banning the cross-border sale of its product, MMT, an additive to gasoline that has been banned in many countries and that Prime Minister Jean Chretien once called a "dangerous neurotoxin." S.D. Myers, an American PCB waste-disposal company, also successfully used a Chapter 11 threat to force Canada to reverse its ban on PCB exports - a ban Canada undertook in compliance with the Basel Convention banning the transborder movement of hazardous waste - and successfully sued the Canadian government for $50 million (US) in damages for business it lost while the short-lived ban was in place. The FTAA will likely give similar powers to the corporations of the hemisphere. Such powers will allow them to challenge all government regulations and activities, and undermine the ability of all governments to provide social security and health protection to their citizens.

It is unlikely that the United States would not extend the provisions of NAFTA concerning water to the other countries of the hemisphere under the FTAA. These provisions establish a continental water market in the case of the commencement of commercial water exports; for the countries of Latin America concerned about water privatization schemes, this is an issue urgently needing attention. It is estimated that, by 2015, more than half the countries of the world, primarily the poorer countries, will suffer from severe water shortages, leading to illness, death, civil unrest and war. The world's water problems will be only worsened by the commercialization of a free, natural resource and its siphoning off to other countries.

No mention is made of culture or cultural exemptions in the mandates of any of the Negotiating Groups. However, it is very likely that culture will either be fully included in the hemispheric pact or there will be a cultural "exemption" similar to the one that exists in NAFTA. And that is almost as bad as having culture fully included. If cultural services are included in the definition of services, as they appear to be, and the principles of national treatment and most-favored-nation apply to these cultural services, as they also appear to do, then government subsidies to the arts and culture could not be allocated exclusively to local artists, publications, production companies and the like. Since cultural services would have to be applied in a non-discriminatory manner; American and other corporations of the hemisphere in the entertainment industry could demand equal rights to compete and receive government funding. As with social programs, any government that continued to favor the local cultural sector could be sued for compensation under Chapter 11 by transnational industry corporations, from big-box retailers to movie networks. If the proposed FTAA is adopted unchanged, national cultural diversity and cultural industries will become a relic of a past time.

The WTO SPS agreement has had a terrible impact on the right of the world's citizens to safe food. Canada and the United States successfully used the SPS agreement to strike down a European ban on North American beef containing harmful, possibly cancer-causing hormones. The EU, deeply sensitive to lingering concerns about mad-cow disease, implemented a ban on the non-therapeutic use of hormones in its food industry, citing many studies linking them to illness. The WTO panel demanded "scientific certainty" that these hormones cause cancer or other adverse health affects, thus eviscerating the precautionary principle as a basis for food safety regulations. The FTAA appears poised to promote a model of agriculture to the hemisphere where food is not grown by farmers for domestic consumers, but by corporations for global markets. The results will be far-reaching indeed.

The countries of Central and South America and the Caribbean are being given all sorts of promises about the FTAA: more liberalized trade and investment will create the biggest trade powerhouse in history, thereby spreading prosperity to the many millions of the region currently without work or hope, they are told. Latin Americans should examine these promises very carefully before jumping into this pact. For over a decade, the Structural Adjustment programs of the World Bank and the IMF forced most Latin American countries to dismantle their public infrastructures. In order to be eligible for debt relief, many dozens of the countries of the Americas were forced to abandon public social programs, allowing for-profit foreign corporations to come in and sell their health and education"products" to "consumers" who can afford them. Now these countries are allowed to maintain the most basic of public services only for the poor; but these services are so inadequate that the corporations aren't interested in them, and many millions of people in the hemisphere go without the most basic of education and health services. Not surprisingly, Latin American countries are experiencing an invasion of U.S. health care corporations, like Aetna International and American International, who report a 20 percent growth in the region per year. Under the FTAA, this process will accelerate, wiping out traditional medicine, education and cultural diversity. In fact, worldwide economic and cultural harmonization is the goal, says one top U.S. WTO official, who adds, "Basically, it won't stop until foreigners finally start to think like Americans, act like Americans and - most of all - shop like Americans."

The last decade of trade and investment liberalization has already caused great suffering in Latin America. Interest rates on debt payments have soared from 3 percent in 1980 to over 20 percent today. Latin America, as a region, has the highest rate of inequitable income distribution in the world. After swallowing its free market medicine, it now has a poverty rate higher than it was in 1980 and the buying power of Latin American workers is 27 percent lower. Eighty-five percent of all job growth has been in the precarious sector with no benefits or protections. Mexico, eight years into NAFTA, now has record-high poverty rates of 70 percent; the average minimum wage lost more than three quarters of its purchasing power in those years. Ninety million Latin Americans are now indigent and 105 million have no access to health care whatsoever. Child labor has grown dramatically; there are now at least 19 million children working in terrible conditions. Massive environmental degradation has resulted from the region's desperate rush to exploit its natural resources and the use of pesticides and fertilizers has tripled since 1996; there are now 80,000 chemical substances produced and used in the Americas.

If the terms and recommendations of the FTAA Negotiating Groups are the substantive basis for a hemisphere trade pact, the whole process is totally unacceptable and the citizens of the Americas must work to defeat it entirely. In spite of government protestations that they have negotiated these new trade and investment rules in full collaboration with their citizens, the proposed FTAA reflects none of the concerns voiced by civil society and contains all of the provisions considered most egregious by environmentalists, human rights and social justice groups, farmers, indigenous peoples, artists, workers and many others. Every single social program, environmental regulation and natural resource is at risk under the proposed FTAA. As it appears to stand now, there is no possible collaboration to make this trade pact acceptable.

Based on a different set of fundamental assumptions, such as the United Nations Universal Declaration on Human Rights and strong environmental rules, many citizens would likely be prepared to enter into a process to develop closer ties with other countries in the Americas and around the world. However, it cannot start with the assumptions and goals of this FTAA. Current international trade agreements, like the WTO and NAFTA, must be revisited. It is time for a new international trading system based on the foundations of democracy, sustainability, diversity and development, and much good work is being done on these alternatives. As a beginning, Chapter 11 must be removed from NAFTA; water must be exempted; the energy provisions rewritten with an emphasis on conservation; culture must be truly exempted; and multinational organizations should be required to support local communities, rather than robbing them of their economic assets and destroying family and communal life. Most important, the world of international trade can no longer be the exclusive domain of sheltered elites, trade bureaucrats and corporate power brokers. When they understand what is at stake in this hemispheric negotiation, the peoples of the Americas will mobilize to defeat it. That is the fate it deserves.


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