Global Policy Forum

by Caritas Panama*

Translation. Herbert Kaser. This e-mail address is being protected from spambots. You need JavaScript enabled to view it volunteer translators (*) The Free Trade Zone of the Americas implies the establishment of free capital flow between the mightiest economy of this planet (USA) and the underdeveloped economies under debt spread over Latin America and the Caribbean's. It keeps up the fiction of a pact between equal partners and ignores the fact, that the total of all cross national incomes of all our nations is one tenth of that of the USA.

According to Hugo Fazio, an economist from Chile, "the opening of the national economies to the great capital has created a predominance of few groups of financial consorts in the region. This hegemony has been predominantly established in the banking sector by the Spanish BSCH and BBVA, by the Citigroup of the USA and the Dutch ING managing private pension funds and using the finance system all over."

Fazio points out that the removal of international regulations for the capital market "has opened up a source of instability, especially by the predominantly short term transfers of resources to obtain higher benefits". Today - since the dismantling of the Bretton Woods treaty, which used to regulate these transactions in the past decades - 90% of the transactions in the world are speculative. They amount to a flow higher than all the money reserves of the G-7 countries.

This speculative capital consists of resources not intended for productive purpose, they are rather brought into the countries and regions looking mainly for profits from high interest rates. It offers a very attractive method to multiply money by trading money for money.

Fazio indicates that one of the characteristics of the new generations of financial crises comes exactly from these inequalities. In those countries, who introduced a regulatory measure - a deposit mechanism - against short term transactions like Chile and Columbia during the "tequila crisis" (the financial crisis in Mexico at the end of 1994) or China and Taiwan during the south-east Asia crisis, the destabilising effects have been avoided or at least cushioned. This option is absolutely banned by the FTAA or the free trade treaty with the USA.

This deposit is an instrument that exactly hinders the influx of "free flying" capital; it forces the capital to stay in the country for a predetermined period of time determined partially by the amount exchanged. This financial controlling instrument has been eliminated by Chile a few years ago.

There are also other effects caused by the constant in and out of "free flying" and speculative capital. First of all, "the experience of the imposition of the FTAA is in fact a grave transgression against the sovereignty and self-determination of the peoples. It concedes privileges to international operators, which suppress the national legislation. A clear example for the above, according to Fazio, is the effort of North America to introduce the articles of chapter 11 of the North American Free Trade Agreement (NAFTA) signed by the USA, Canada and Mexico. It experienced little local resistance.

The article 1110 of chapter 11 of the NAFTA, grants the foreign investors compensations for losses due to sovereign decisions by national authorities as it considers them expropriations. The big change brought about by this agreement is, that it elevates the investors to subjects of international law, which previously was reserved to states only.

Another attack on the sovereignty among others is the postulate of the FTAA to allow any acquisition even if it includes social interests or affects the public sector. It grants preference to "enterprises with more experience and with a higher trade volume" in fact to those of the North.

Human rights are left out.

The growing tendency to globalise the economy has a strong impact on international standards regarding human rights. During negotiations on trade agreements the governments compromise systematically on human rights standards. In fact most of the decisions fall into this category.

Regarding international commerce, decisions are taken in summits and in secret meetings behind closed doors. The people are not invited to participate.

Due to the secret nature of the negotiations many are afraid, that the Free Trade Area of the America (FTAA) will give preference to the "rights of the investors" to the human rights. The elected representatives are overruled if they make decisions to protect civil rights. No legislation of the hemisphere got a chance to study the agreement.

Human Rights are Endangered

The right to a standard of living

"Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing" Art. 25, Universal Declaration of Human Rights.

In 1994 the North American Free Trade Agreement (NAFTA) opened the Mexican market for agriculture. North American corn came on the market with low prices and dumped the internal corn price. Many corn producers were brought to the brink of ruin. The rapid liberalisation of the agricultural sector as a consequence of the NAFTA should have been an integral part of the right to a standard of living and consider the development of new legal instruments for this purpose. No doubt, the rapid liberalisation of agriculture made it impossible for the small farms in the developing countries to compete with the international farming industry, common in the developed countries.

This rapid liberalisation was also an integral part of a political system, which caused heavy losses for small farmers, a decline in production, less bio-diversity, an increase in emigration, and a rise in food prices and - for many small farmers - the destruction of a way of living.

These events not only put the secure food supply in Mexico at risk, it also infringed on the right of the citizens to a proper standard of living.

The right to education

"Everyone has the right to education. Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms". Article 26, Universal Declaration of Human Rights.

Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realised. Article 28, Universal Declaration of Human Rights.

The agreement about the market on services, as it has been negotiated in the FTAA, forces the smaller economies to open the domestic educational sector to foreign private investment. This is a precondition for the right to sell products in countries with greater buying power. In other words: A country that wants to sell e.g. apparel abroad has to open its domestic educational sector before. Many countries in Latin America had to resort to this method before in order to obtain loans from the World Bank and the international monetary fund. These cases open up the spectrum under which we have to see the future.

Chile for instance has privatised great parts of her educational institutions following instructions from the World Bank. Consequently the expenditure of the state for education in the last twenty years has been reduced by approximately 32%. No surprise, in this period of time the quality of education in the affluent sectors has improved while it got worse in the poor sectors. The international organisation for education states, "the forces of the open market make education less accessible and aggravate social inequality". The prognosis is: these measures transgress against the right to education. Therefore the countries which have compromised in the field of human rights have to demonstrate what measures they intend to take to guarantee the principle of free basic education and how they will prevent discrimination in the access to higher education and how they will keep the programs for affirmative action going.

We have to demand from the countries to work in the spirit of international co-operation, as laid down in the Universal Declaration of Human Rights. We have to point out again, it needs resources to develop a system of international relations to defend and foster civil rights, including the right to education. This domestic capability is lost, when the educational services are opened to the private foreign sector.

The right to freedom of expression

Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers. Article 19, Universal Declaration of Human Rights.

Everyone has the right to freedom of peaceful assembly and association. Article 20, Universal Declaration of Human Rights

The right to freedom of expression is based on two principles: The right to free expression and the right of free access to information. These principles together with the right of freedom of assembly are cornerstones of a democratic society. Even if the text of the FTAA does not deny these principles, the way the negotiations have been carried out break these principles and do not fit the right to freedom of expression. Our right to seek and receive information has been threatened by the secret nature of these negotiations. The governments failed to discuss the text in public. Every citizen has the right to express his opinions. This right is violated, when violent or antidemocratic methods are used to restrict this right.

The Union of Civil Liberties in the USA reports more than 500 demonstrators arrested during the WTO meeting in Seattle. More human rights violations:
- Zones, where protests were forbidden, have been created.
- Observation and intimidation of the organizers
- Brutality by the police. Use of excessive force against peaceful demonstrators. Unjustified arrests. Brutality against detainees.

The right to health standards

The States Parties to the present Covenant recognise the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

International Covenant on Economic, Social and Cultural Rights, Article 12.1

The steps to be taken by the States Parties to the present Covenant to achieve the full realisation of this right shall include those necessary for:

The improvement of all aspects of environmental and industrial hygiene;

International Covenant on Economic, Social and Cultural Rights, Article 12.2.b

The International Covenant on Economic, Social and Cultural Rights states, enjoying the right to health depends on labour and environmental hygiene. No doubt, the agreements on free trade have prevailed over environmental standards in some cases presented to the arbitrary committees of NAFTA and WTO. In other cases the findings of these committees have hindered the governments protecting the environment. In case of the NAFTA, these precedents can affect the adoption of similar measures less than done already before the agreement has been signed.

The problem referred to by FTAA allows the corporations to demand from the governments the "rights of the investor", whenever they consider this right violated. Some corporations already have won disputes by arguing, the environmental standards infringe their rights to invest into utilities. The governments had to pay millions of dollars to corporations in out of court settlements. In 1996 the North American company Metalclad, sued the Mexican government for violating Article 11 of NAFTA, because the regional government of San Luis Potosí­ forbade the company to establish a landfill for toxic waste. The regional society was worried about the effects on health and the environment, especially about the effects on drinking water. Under the rules of NAFTA, negating the permit to open a waste deposit comprises an "expropriation". The Mexican government had to pay US$ 16,7 millions in compensation to Metalclad.

The right to intellectual property

The States Parties to the present Covenant recognise the right of everyone:
- To take part in cultural life;
- To enjoy the benefits of scientific progress and its applications;
- To benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author. International Covenant on Economic, Social and Cultural Rights, Article 15

The international human rights grant protection to all types of intellectual property, from scientific progress to design, and of course the knowledge about the traditional medicine of the indigenous people. As a matter of fact, the actual, international commercial rights incline to privilege the protection of intellectual property of the great multinational corporations.

The Agreement on Trade-Related Aspects of Intellectual Property Rights of the WTO, commonly known as TRIPS Agreement, grants the multinationals the facility to exploit exclusively all its original inventions. It is true, that the titles of 97% of all existing patents in the world are held in industrialised countries, while the Native American people are deprived of their collective rights on land, their culture and the traditional knowledge. The indigenous women are affected most.

From the signature to the actual interpretation of the trade-related rights, the right to a patent from an enterprise take precedence over human rights, even over the right to live. An example: The United States fought against a Brazilian program to produce generic drugs. This initiative has succeeded in developing the domestic capability to protect the health of the population for a reasonable price, including the treatment of AIDS patients.

Under this revolutionary program the Brazilian laboratories produced anti-retro-viral drugs for a fraction of the cost in North American labs. This enabled the authorities in Brazil to provide urgently needed medication to 95 000 AIDS patients. In January 2001 the chamber of commerce of the United States filed a complaint to the WTO, to decide whether Brazil was in violation of the TRIPS Agreement.

Who is going to reap the privileges in a Free Trade Area of the America?

Will it be the defence of the right to a standard of living or rather the defence of the rights of enterprises?

AN ALTERNATIVE IS POSSIBLE

To grant everyone the full scope of human rights has to be a key element of every trade policy. In the same way the parliament is busy checking all the proposed laws are compatible with the Charter of Rights and Liberties of Canada, the international trade authorities and the financial organisations have to abide by trade agreements and the investments have to comply with international human rights. Even more, the marks to which trade agreements are formulated and negotiated have to comply with these rules and the results have to be measured on these standards.

During the world conference on human rights held in Vienna in 1993, more than 170 states agreed, that the human rights standards are a prime responsibility of the governments. They demanded, that all legislative authorities formulate rules in a way, which meet these objectives. In the Americas there is a well-developed system to defend the human rights. It includes civil, political, economical, social and cultural rights. It is true; this system lacks human and financial resources. One cannot follow up on the negotiations about a treaty on free trade in the Americas, until the involved governments don't assume the defence of the already existing human rights instruments. Not to do this makes the protection of the environment and the social justice senseless and draws us back to an era in which the society is at total mercy to private interests and a privileged bureaucracy, which is eager to serve them.

*Caritas Panama is a member of Accion Cultural Cristiana
**Translation: Herbert Kaser, Rights and Democracy. Rights and Democracy is a Canadian institution with an international mandate. This organisation co-operates with the civil society, the Canadian and other governments. It promotes human rights, the development of democracy and capabilities and education of the public by dialog and lobbying. The organisation aims its focus on four themes: The development of democracy, women's rights, the rights of the indigenous people, and globalisation and human rights.
Contact: http://www.adital.org.br

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