Global Policy Forum

Thirty-four countries with 800 million people--all under Uncle Sam's thumb. That's the essence of the proposed Free Trade Area of the Americas (FTAA), Washington's bid to extend the terms of the North American Free Trade Agreement (NAFTA) throughout North and South America--except for Cuba.

U.S. economic, political and military dominance in the Western Hemisphere isn't new, of course. But the FTAA would go much further in locking in the power of Wall Street U.S.-based transnational corporations. That's why the U.S. will host a meeting of trade ministers from the Americas in Miami November 16-21--inside an exclusive, heavily guarded hotel. They'll be answered in the streets by tens of thousands of protesters from the labor, global justice and antiwar movements, from the U.S. and across North and South America. Activists are planning a mass march on November 20, as well as civil disobedience and direct action. Socialist Worker's LEE SUSTAR looks at the origins and aims of the FTAA--and the growing movement that's emerged to oppose it.

Putting NAFTA "on steroids"

President James Monroe laid it out in 1823. The U.S. would regard "any attempt on [Europe's] part to extend their system to any portion of this hemisphere as dangerous to our peace and safety." In other words, the countries of Latin America that had won their independence from Spain were in Washington's backyard--so Europeans had better keep out.

Now, almost 180 years to the day since Monroe drew a line in the Atlantic, the U.S. is trying to erect a new barrier around Latin America to hinder the Europeans economically--and Japan and China, too, for that matter. The World Trade Organization (WTO) this month ruled that U.S. tariffs recently imposed on steel products were a violation of trade rules.

Among the violations was the U.S. decision to exempt Canada and Mexico from tariffs under the NAFTA accord, even as trade barriers were increased with Europe and Asia. This shed light on the real nature of NAFTA and the proposed FTAA--a trade bloc to compete with the European Union (EU), which now has a bigger market than NAFTA, and is set to expand further.

From the beginning, the first President Bush envisioned NAFTA as a prelude to a hemisphere-wide trade deal that could counter the EU. His official justification for NAFTA was to create jobs in the U.S.

The jobs never materialized. In fact, a study on the seventh anniversary of the treaty estimated that the U.S. lost between 200,000 and 600,000 jobs as a result of NAFTA--many of them unionized manufacturing jobs.

In Mexico, meanwhile, real wages dropped to their lowest level since 1939. But that still isn't low enough for global capital. In recent years, Mexico has seen plant shutdowns of its own--with the factories moving across the Pacific to China and other East Asian countries where labor costs are lower still.

Yet there's far more to the FTAA than a race to the bottom in wages. The treaty would greatly expand the NAFTA trade bloc not only by eliminating tariffs and duties on trade, but also by dramatically strengthening the economic and political leverage of major corporations.

To that end, the FTAA includes NAFTA's notorious Chapter 11, which covers so-called "investor-state" relations. This measure gives transnational corporations the right to seek monetary damages for alleged violations of the treaty, with rulings made by unaccountable tribunals tied to the United Nations and the World Bank.

The fair-trade group Public Citizen argues that this gives "rights and privileges to foreign investors that go significantly beyond the rights available to U.S. citizens or businesses in U.S. domestic law." This formulation not only comes dangerously close to foreigner bashing, but it's simply wrong.

Public Citizen's own accounting of major Chapter 11 cases under NAFTA through the middle of last year showed that U.S. companies initiated 11 out of 15, with Canada filing the rest. If Mexican companies didn't seek action against the U.S., it's because smaller or weaker nations can rarely afford to challenge the dominant ones--especially when it's the world's biggest superpower.

For example, to conform to NAFTA, Mexico bowed to U.S. pressure to eliminate its corn tariffs and price supports for farmers, and eliminated subsidies for tortillas, a staple in Mexico. Lower-priced U.S. corn imports then entered the Mexican market--and 1 million Mexican farmers were thrown into poverty as a result.

If George W. Bush succeeds, the FTAA would repeat this pattern throughout the rest of the Americas. It would include many of the features that have proved most contentious in the WTO--like the General Agreement on Trade in Services, which would allow corporations to privatize services currently provided by governments, such as health care and education.

Intellectual property rights would grant hemisphere-wide patent rights as well--again, giving enormous leverage to U.S. businesses, such as pharmaceutical companies. U.S. media conglomerates also want to try to use the FTAA to eliminate barriers to trade in services.

The backlash in Latin America

Yet the bigger the push for free trade, the larger the backlash has been in Latin America. According to a recent Latinobarómetro opinion poll conducted in 17 Central and South American countries, just 16 percent of respondents said they were satisfied with the free market as an economic model.

Big majorities in virtually every country reject the idea that privatization has been beneficial to their societies. Little wonder. The World Bank reports that one-third of the population in 30 countries in Latin America and the Caribbean live in poverty. "Structural reforms have done little or nothing to reduce the income inequality that remains the region's biggest challenge," Newsweek magazine noted.

The world economic crisis has hit the region especially hard. Overall growth was just 0.4 percent in 2001, and the regional economy contracted 1.3 percent in 2002, with weak growth projected for 2003.

Latin America's huge debt to Western banks compounds the problem. Brazil's foreign debt is $285 billion, more than half the size of the country's gross domestic product (GDP). Argentina, hailed as a "star pupil" of free-market reforms by Bill Clinton, now has a debt of $87 billion--equal to 140 percent of its GDP.

Popular explosions over the failure of free-market economic policies in Argentina led to the ouster of a hated president--and three successors--in December 2001. Revolts from below have also driven two presidents out of office in Ecuador since 1997.

And in Bolivia last month, a mass uprising and general strike drove President Sánchez de Lozada from office over his efforts to export natural gas to the U.S. "Neoliberalism has robbed us blind," said Oscar Olivera, a union leader who played a key role in a successful protest against the privatization of water in the Bolivian town of Cochabamba three years earlier. In his first term as president, Sánchez de Lozada privatized everything except the air--all for the benefit of international capital and the Bolivian oligarchy."

Ironically, it was de Lozada's Bolivia that was chosen to chair the FTAA's working group on "civil society" to gather input from labor and social movement organizations.

The battle over subsidies for agriculture

The revolt against neoliberalism has opened the door to political leaders who voice criticisms of the free market and U.S. attempts to impose such policies. These include Hugo Chávez in Venezuela, Néstor Kirchner in Argentina and, most importantly, Luis Inácio "Lula" da Silva in Brazil, who took office in January. Lula, though, has since broken with longstanding positions of his Workers Party to put a top bank executive in charge of the national bank, increase the retirement age and enter into FTAA negotiations with the U.S.

Brazil isn't simply bowing to U.S. pressure. As the economic powerhouse of South America, Brazil is home to important transnational corporations and is a major exporter of both agricultural products and industrial goods like steel and commercial jets. Brazilian capitalists have signaled that they're willing to go along with the FTAA--with a big "but."

They want Washington to agree to drop its agricultural subsidies that crowd out Brazilian exports from U.S. markets--and to reduce tariffs that limit Brazilian steel imports. In fact, it was disputes over agricultural subsidies paid by the U.S. and the EU that led to the collapse of the WTO summit in Cancún, Mexico, in September.

Brazil, India and China led a group of developing countries--calling themselves the "Group of 20 Plus"--in a walkout over the talks. "These countries have the clout to demand greater access to the markets of industrialized nations because together they account for more than half the world's population--and they also have substantial manufacturing centers of their own," the New York Times observed.

As Lula puts it, his aim is for Brazil to have "sovereign insertion into the globalized world"--strengthening its ties to the world market without giving up control over its own affairs. Washington has other ideas.

The U.S. is refusing to budge on agricultural subsidies, which threatens to derail negotiations for the FTAA. "Brazil, by far the largest economy in South America, has little to gain from a hemispheric deal unless the U.S. is willing to lower its huge farm subsidies and limit the use of antidumping rules meant to curb excess imports--both hot-button subjects in an election year," the Wall Street Journal pointed out. As a result, the Journal concludes, the FTAA summit in Miami could see a repeat of the WTO collapse in Cancún: "sunny beaches, protesters, tear gas--and another dashed trade deal."

The other arm of imperialism

The Brazilian government's resistance to the FTAA may be tactical, but the opposition at the grassroots is very different. At the 2003 World Social Forum in Porto Alegre, Brazil, opposition to the FTAA and the impending war on Iraq were seen as two aspects of the same struggle--opposition to U.S. imperialism. It's not difficult to see why.

Conquest, armed intervention and support for military dictators have always been used by the U.S. to further its agenda in Latin America--for example, the seizure of nearly half of Mexico's territory in a mid-19th century war. Fifty years later, the U.S. provoked a war with Spain to grab control of Cuba and Puerto Rico, and over the next half century, it intervened regularly in Central America and the Caribbean.

During the Cold War, the U.S. propped up dictatorships in Chile, Brazil and Argentina in the name of fighting "communism," with tens of thousands murdered--and intervened with a proxy army to bleed Nicaragua's revolution in the 1980s. The dictatorships unraveled under popular pressure in the late 1980s and early 1990s.

But the strong arm of the military was never absent from U.S. policy in Latin America. Colombia is now the third-largest recipient of U.S. military aid--which means Washington is bankrolling that repressive government's civil war.

The publication last year of the White House's National Security Strategy document--popularly known as the Bush Doctrine--makes the links between militarism and free-market policies even more explicit. It calls for a "new era of global economic growth through free markets and free trade"--and prominently mentions the FTAA.

Building real internationalism

If the social movements in Latin America see the FTAA as an expression of U.S. imperialism, views in North America are mixed. The 1999 protests at the WTO summit in Seattle were a milestone, not only because some 50,000 people protested and stood up to a police crackdown, but because U.S. unions broke with the Cold War past and allied themselves with social movements from around the world.

The September 11 attacks and the U.S. war on Afghanistan disoriented the global justice movement. For its part, labor has sometimes pursued protectionist strategies around trade issues--for example, lining up with the right wing in an unsuccessful effort to block permanent normal trade relations with China.

The United Steelworkers of America--which played a prominent role in Seattle and is expected to do so again in Miami--allied with steel bosses to seek higher steel tariffs, which only hurt steelworkers in countries like Brazil. The AFL-CIO, despite voicing some criticisms of the Iraq war drive, backed the U.S. invasion.

Nevertheless, the protests in Miami point to a revival of the global justice movement, including organized labor. The unions' participation alongside their counterparts from around Latin America shows the possibility of reviving international labor solidarity.

United for Peace and Justice, a national antiwar coalition, will also participate in protests against the FTAA, underscoring the link between economic and military imperialism. Thousands more global justice activists will protest as well.

The U.S. occupation in Iraq is unraveling, and Washington's free-trade agenda has run into trouble, too. We can build a movement that can challenge Washington's efforts to run the globe--and replace this unjust system with a world based on genuine democracy and meeting human needs.