Free Trade Agreement of the Americas
- forwarded message. note that there will be demos in Quebec City April 20-22
and a labor anti-FTAA conference in Mexico City. plenty to coordiante
with. -- Tom Condit <tomcondit@...>
UNVEILING NAFTA FOR THE AMERICAS
NAFTA + WTO = FTAA
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 weve seen in Canada, Mexico and the U.S. over the past seven years
and expand NAFTAs damage to the other 31 countries involved. The FTAA
would intensify NAFTAs 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.
A quick look at NAFTAs 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 brainsan unprecedented 36% increase
from the year before! 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 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 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, subsidies 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 treaty language.
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 Representatives office (USTR),
headed by Charlene Barshefsky as of November 2000. The lead USTR negotiator
on FTAA is Peter Allgeier.
What will FTAAs 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 unveiledin other words, once its 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 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
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 didnt 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 NAFTAs 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 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, 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 nations.
Intellectual Property Rights (IPR):
The U.S. is trying to expand NAFTAs 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
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.