Unveiling "NAFTA for the Americas"
NAFTA + WTO = FTAA
(en español: Quitando el Velo al "TLCAN para las Américas": TLCAN + OMC= ALCA)
What is "FTAA" or "NAFTA for the Americas"?
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 all of the countries in the western hemisphere except Cuba. This massive 34-country NAFTA expansion is being negotiated right now in secret by trade ministers from North, Central and South America and the Caribbean. The goal of the FTAA is to impose the NAFTA model of new corporate investment and patent protections, trade liberalization, deregulation, and privatization hemisphere-wide. The FTAA draft texts are secret, but information that has leaked out reveals that many of the FTAAs chapters are literally extensions of NAFTA rules. These rules would significantly increase the power corporations would have to constrain governments from setting standards for public health and safety, to safeguard their workers, and to ensure that 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.
What can we learn about FTAA from NAFTA?
FTAA would deepen the negative effects of NAFTA that people in Canada, Mexico and the U.S. have already suffered over the past seven years and expand NAFTAs damage to the other 31 countries involved. The FTAA would intensify NAFTAs "race to the bottom." For instance, under the FTAA, the wages of already-exploited workers in Mexico could be leveraged against even more desperate workers in Haiti, Guatemala or Brazil by companies receiving new investor guarantees to produce goods for export back into U.S. markets. A quick look at NAFTAs legacy reveals disastrous consequences:
- Its estimated that over a million U.S. manufacturing jobs have been lost since NAFTA as companies relocated to Mexico to take advantage of $5 per day wages for Mexicos manufacturing workers. Without enforceable labor rights, Mexican workers cannot organize to increase their wages. The laid-off U.S. workers usually find jobs with less security, and wages that are about 77% of what they originally had.
The trade surplus the U.S. enjoyed with Mexico before NAFTA has become an $24.2 billion per year deficit as of 2000.
Despite promises of increased economic development throughout Mexico, only the border region has seen intensified industrial activity. In border maquiladora factories, over one million more Mexicans work for less than the minimum wage of $5 per day today than before NAFTA. Meanwhile, NAFTAs agricultural terms have devastated small farmers, with one million peasant farm families estimated to have been forced out of farming. The displaced campesinos are forced either into emigrating to the U.S. or into Mexicos overcrowded cities where unemployment runs rampant. 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. Along the border, the occurrence of some environmental diseases, including hepatitis, is two or three times the national average, due to lack of sewage treatment and safe drinking water.
Health, safety and environmental laws in the three NAFTA countries have been attacked in NAFTA tribunals. Most recently, the U.S. was ordered to permit access to all U.S. highways for Mexican trucks. The panel cited devastating data describing the severe safety problems still existing with many Mexican trucks, which often do not comply with required driver and truck safety standards, but nonetheless concluded that NAFTAs rules require the U.S. to grant access unconditionally.
Although its 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 started?
High on their 1993 NAFTA victory in Congress, U.S. officials organized a "Summit of the Americas" in Miami in December 1994. There, trade ministers from 34 western hemisphere countries agreed to a U.S. proposal to launch negotiations to establish a hemispheric free trade area. After the so-called Miami Summit, however, little was agreed on FTAA until the "Santiago Summit" in Chile in April 1998. 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 that the FTAA would include rules on 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, nine formally-established working groups have met every few months to lay out their countries positions on these issues and have begun writing the actual text of a new hemispheric free trade agreement.
As with the Multilateral Agreement on Investment (MAI), many Members of Congress have no idea that any of this is going on. Congress never set goals for U.S. participation in these talks. Congress has never delegated its Constitutional role of setting the terms of international commerce to the Executive branch. However, a variety of corporate committees have been and continue to advise the U.S. negotiators. Under the U.S. 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 demands to include public interest negotiating topics on par with those related to corporate interest were rejected. A "Committee of Government Representatives on Civil Society" was established, ostensibly to represent the views of civil society to the TNC. Yet in reality, this so-called committee is little more than a mail in-box. There is no mechanism to incorporate civil society concerns and suggestions sent to the committee into the negotiations, rendering the committee effectively useless as a forum for these issues.
The U.S. is represented by the U.S. Trade Representatives office (USTR), headed by Robert Zoellick. The lead USTR negotiator on FTAA is Peter Allgeier.
What could FTAA NAFTA expansion mean for you?
Because negotiations are occurring in secret and the texts have not been made public, we must rely on our conversations with U.S. negotiators and on FTAA documents leaked by other countries. Unless we act now, the problems described below will be enshrined in a final trade agreement and then it will be too late to change it!
New Corporate Power Tools to Attack Domestic Environmental, Labor, Consumer and Other Public Interest Safeguards: U.S. trade officials confirm that FTAA will include the extreme NAFTA provisions which empower corporations themselves to sue governments in trade tribunals to demand removal of standards or laws designed to protect public health and safety, or cash compensation for compliance costs if the government decides to keep standards in place. In other words, the FTAA would provide a hemispheric "regulatory takings" clause enforceable by corporations outside national court systems. These rules are how NAFTA expansion provides a "back door" for the Multilateral Agreement on Investment (MAI). We didnt call the MAI "NAFTA on steroids" for nothing! The purpose of the MAI was to expand worldwide NAFTAs investor protections and rights, which are significantly more extreme than the terms of the WTOs investment rules. Direct NAFTA expansion is just another way to force a block of countries to accept these extreme new investor privileges. U.S. trade officials say that FTAA will include the most extreme, controversial aspects of both NAFTA and the MAI.
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 and that U.S. tax dollars must be used to pay the corporation back for the courts ordered damages.
The U.S.-based Ethyl Corporation used these provisions to push 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.
U.S.-based Metalclad Corp. sued a Mexican state to demand the right to open a toxic waste disposal site, claiming that the environmental zoning law forbidding the dump constituted an effective seizure of the companys 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 Safety, Hunger & GMOs: Instead of responding to growing U.S. consumer concerns about genetically modified (GM) foods, the U.S. is trying to force all countries to accept these products -- an effort in which unregulated U.S.-based corporations have taken a lead. Food security organizations all over the world agree that the U.S. seed and agribusiness corporations demands to force countries to accept these technologies will increase hunger in poor nations. Being forced to buy expensive patented seeds every season, rather than using locally developed seed which can be saved for replanting will force traditional subsistence farmers in the developing world into dependency on transnational corporations and bring the hemispheres many poor people closer to starvation.
Meanwhile, FTAA will include NAFTAs stringent limits against government policies promoting food safety. For instance, FTAA is expected to list the pesticide standards of the Codex Alimentarius, a corporate-influenced body, to set the permitted pesticide rules. Domestic standards that provide more consumer protection would be presumed to violate trade rules and would be subject to challenge. Vital food safety policies regarding inspection and labeling of meat, produce and more could also be constrained. Even without this new assault, the World Health Organization has reported that globalization of the food supply is increasing the incidence and severity of food-borne illnesses.
If the U.S. position wins out, FTAA will promote the corporate interests of biotech and agribusiness giants like Archer Daniels Midland (ADM), Cargill and Monsanto over the public interest in safe and secure food supplies worldwide.
Empowering Pharmaceutical Giants to Set Monopoly Prices and Deny Access to Essential Medicines: The U.S. is trying to expand NAFTAs rules on patents to the whole hemisphere. These NAFTA "intellectual property" rules give a company with a patent in one country the monopoly marketing rights on the item throughout the region. These rules are a form of corporate protectionism that allow pharmaceutical companies to forbid countries from granting compulsory licensing, to allow competitor companies to manufacture a drug in exchange for paying a fee to the patent-holder 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. It is the intellectual property rules that allow companies to lock down patents on traditional medicines or seed varieties they collect while on "biopiracy" missions in developing countries. The rules grant "ownership" to whomever files a patent first on such items based on traditional knowledge, effectively robbing indigenous people of their cultural wealth.
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 isnt 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.
What is the current status of the FTAA negotiations?
All nine of the FTAA negotiating groups held meetings at two to three month intervals throughout 2000out the positions of their governments on the nine core issues. At last weeks Ministerial in Buenos Aires Argentina, trade ministers continued the process of consolidating proposed text to form a complete "bracketed" (draft) text -- early versions of which have been made available to select groups of government and corporate advisors -- expected to be released to the public shortly after the upcoming Summit of the Americas in Quebec City, Canada in late April 2001, which President Bush will attend. The agreement is to be complete by 2005, with implementation the following year.
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