Global Policy Forum

Towards a 'Free Trade Area of the Americas'


Chasing the Holy Grail of Free Trade

By Dorval Brunelle

Monde Diplomatique
April 2001

At the heart of the free-trade doctrine lies the conviction that exports drive growth. If every country, or group of countries, were to act in accordance with this belief, the contest would in theory become a zero-sum game as long as the players had comparable levels of development. But it is quite another thing when development levels are unequal. Removing trade barriers means that the strong get stronger, and drives weaker countries further into dependence, preventing them from fashioning policies to meet the needs of their populations, especially in agricultural matters. Such is the logic of the proposed Free Trade Area of the Americas, which will be up for discussion at the Quebec summit on 20-22 April. The FTAA proposes to extend throughout the continent the provisions of the North American Free Trade Agreement, which has already ruined Mexican agriculture. Backed by Washington, the FTAA is so untenable for the other nations of the hemisphere that their parliaments were not even told of its provisions. These countries are now ready to deliver a resounding 'no' to the FTAA.

The proposed Free Trade Area of the Americas (FTAA) agreement will come under discussion in Quebec City on 20-22 April. The FTAA project stemmed from the Enterprise for the Americas Initiative, proposed by President George Bush Sr. in June 1990 and initiated by his successor, Bill Clinton, at the first Summit for the Americas held in Miami in December 1994 (1). In that same year the North American Free Trade Agreement (Nafta), signed by Canada, the United States and Mexico, came into effect. Heads of state and government from 34 nations of the Western hemisphere (excluding Cuba) will be attending the upcoming third Summit for the Americas.

At the urging of the new US president George W Bush and his trade representative, Robert Zoellick, the pace of FTAA negotiations is to be accelerated. The negotiations, originally scheduled to be completed by 2005, aim to extend Nafta's provisions throughout the Western hemisphere and seek to enshrine the principles of national treatment and non-discrimination within all sectors, most notably in those pertaining to services, investments and governmental contracts. Indeed the standards pertaining to investments were among the most contentious provisions in the ill-fated Multilateral Agreement on Investment (MAI). For example, Nafta's chapter 11 allows foreign investors to bring proceedings against countries in case of losses caused by the application of public standards, such as those relating to environmental protection. As a result, the Mexican government had to pay $16.7m to the California-based Metalclad Corporation because the Mexican state of San Luis Potosi denied Metalclad permission to install a waste disposal facility that posed a public health hazard and against which the local population had voiced its strong opposition (2).

In its current form, the FTAA aims to integrate a dozen sectors, divided into four main "baskets": education, democracy/human rights, poverty and economic integration. However, it is in the economic arena that the implications of hemispheric free trade are most evident. Moreover, a lavish gift to the multinationals is being prepared on the quiet: a new wave of deregulation and privatization. Washington will agree not to enforce its anti-dumping laws and will grant access to the North American market for foodstuffs produced by countries of the South.

At the fifth trade ministerial meeting held in November 1999 in Toronto, the negotiating groups were given a mandate to draw up a framework commercial agreement for the sixth such meeting, in Buenos Aires on 6-7 April, a little more than two weeks before the Quebec summit.

Lopsided and unequal

A statistical overview may provide a better understanding of what is at stake in the FTAA negotiations and may shed light on the potential consequences for the parties involved. Although neoliberal policies aimed at boosting Latin America's under-developed status have been in effect for two decades, more than 36% of Latin American households - some 220m people - were still living in poverty at the beginning of last year. This figure is similar to the 1994 level and slightly higher than it was in 1980 (3).

As of last year, the three Americas (North, Central and South) had 750m inhabitants and their gross domestic product (GDP) totaled $11,000 billion - although the relative weight of the individual economies was extremely unequal. The US' share of the total GDP was 75.7%, compared to Brazil's 6.7%, Canada's 5.3% and Mexico's 3.9%. The other 31 countries represented only 8.4%, with Nicaragua and Haiti each representing 1/2,000th of the total. The data for per capita GDP also confirm this lopsided trend: the US led the way at $30,600, followed by Canada ($19,320), Argentina ($7,600), Uruguay ($5,900), Brazil ($4,420) and Mexico ($4,400). At the other end of the scale Nicaragua's per capita GDP was $430 and Haiti's was $460, or 70 times less than that of the US (4).

These examples of lopsidedness and inequality raise a number of questions and problems, including the potential effects of profound economic integration on the so-called "small-sized" economies, for which no development funds or safety nets have been provided.

The strategy of conducting the FTAA negotiations behind closed doors has thus far served the various governments well. Over the past few months the 900 negotiators have focused on the provisions of the 1994 Miami summit, even though the multilateral negotiations were temporarily suspended. Indeed, while the French government wrested back control of the MAI from its negotiators at the Organization for Economic Development and Cooperation (OECD) in October 1998 and the WTO Millennium Round of negotiations broke down in December 1999 in Seattle, the FTAA project kept apace without encountering significant opposition.

The top-secret, closed-door nature of the FTAA discussions has meant that neither ordinary people nor their elected representatives have been informed of the details of the negotiations. Moreover, representatives of the business community, reunited under the banner of the Americas Business Forum (ABF), have obtained no less than official status at the talks (5). The ABF's role is a crucial one since "many of the recommendations proposed by participants at the San Jose Forum [Costa Rica] are reflected in the mandate of FTAA negotiating groups and in the plan of action that came out of the 1998 summit of the Americas" (6).

Nevertheless, the elected representatives' limited role has set the tone and atmosphere for the FTAA negotiations. The same may be said for the Parliamentary Conference of the Americas (known by its French acronym Copa), which includes elected representatives from 35 countries, 164 provincial and state legislatures, as well as delegates from various regional legislative bodies. In the declaration issued at Copa's second general assembly held in Rio Grande (Puerto Rico) last July, the organization urged heads of state and governments to take into account the level of development of the countries affected by the proposed FTAA agreement and to ensure the participation of elected representatives from all jurisdictions to ensure transparency. Thus far no executive-branch leaders have acted on these recommendations.

Geraldo Magela Pereira, Copa's newly elected president and a member of Brazil's National Congress, subsequently requested that a Copa delegation be granted observer status at the Quebec summit. Pereira was informed that his request could not accommodated owing to the summit's timetable (7).

Parallel summits

Over the course of the FTAA negotiations, various organizations from all over the Western hemisphere, representing some 35 countries (including Cuba), have set up a number of national and sectoral anti-FTAA networks. At the Denver trade ministerial meeting in 1995, the trade union movement, supported by the Inter-American Regional Labor Organization (known by its French acronym, Orit) - the Western hemispheric branch of the International Confederation of Free Trade Unions (ICFTU) - set up a parallel conference. The participants followed up with a declaration outlining their various concerns and grievances.

Similarly, in 1996 in Cartagena (Colombia) the trade union organizations of the Americas issued a new discussion paper and sought to bring pressure to bear on the governmental representatives. The latter, in their own joint ministerial declaration, recognized "the importance of the further observance and promotion of worker rights and the need to consider appropriate processes in this area, through our respective governments."

In December 1996 the presidents of the member states of the Southern Common Market (Mercosur) (8) and the presidents of Chile and Bolivia met in Fortaleza (Brazil). The largest American trade union group (AFL-CIO), in conjunction with Orit, sent a delegation to support various South American trade union groups that had called for an international day to commemorate the struggle for Mercosur workers' rights.

Shortly thereafter, in parallel with the third trade ministerial meeting held in Belo Horizonte (Brazil) in May 1997, representatives of the trade union organizations of the Americas met with delegates from various anti-free-trade groups at the third trade union summit. The anti-free-trade coalitions have subsequently tried to find common ground and to come up with alternatives to the systematic liberalization of health services, education, investments and governmental contracts. The most innovative of the measures adopted at the trade union summit was the decision to launch the Hemispheric Social Alliance (HSA), thereby establishing a broad-based coalition with a view to developing "viable and concrete alternatives to the FTAA" (9).

In 1998 the principal national coalitions successfully organized the first Summit of the Peoples of the Americas, held in Santiago (Chile) on 14-17 April 1998 in parallel with the second Summit of the Americas. The Summit of the Peoples of the Americas was convened by five national anti-free-trade coalitions, four of which were based in North America: the US Alliance for Responsible Trade (Art), the Mexican Action Network on Free Trade (RMALC), Common Frontiers-Canada and the Quebec Network on Hemispheric Integration (RQIC). The host coalition, the Chilean Action Network for People's Initiative (Rechip) (10), is based in South America. Other organizations that also took part in the Peoples' Summit included Orit; various environmental, feminist and indigenous groups; and the Brazilian Institute for Social and Economic Analysis (Ibase).

Alternatives for the Americas

The first Summit of the Peoples of the Americas was a signal moment in the history of the anti-free-trade movement. Activists from far afield found broad areas of agreement, culminating in the release of a draft document entitled "Alternatives for the Americas. Building a people's hemispheric agreement". National-level coalitions were becoming broader and further reaching. The Brazilian Network for the Integration of the People (Rebrip) was founded; and Central America then formed its own coalition, the Civil Initiative for Central American Integration (Icic), while the Latin American Congress of Farmworkers' Organizations (Cloc) joined forces with the HSA. On a national level these groups in turn are rallying a growing number of organizations from within civil societies in the Western hemisphere.

Stemming from the work begun in Belo Horizonte, "Alternatives for the Americas" represents an important milestone in the ambitious effort to form a social alliance encompassing an impressive number of sectors and participants from the 35 civil societies of the Americas. The document makes the following arguments: trade and investment should not be considered as ends in themselves but rather as means leading towards equitable and sustainable development. It is essential that all citizens exercise their right to take part in the formulation, implementation and evaluation of the hemisphere's social and economic policies. Moreover, the primary goal of such policies should be to promote economic sovereignty and collective welfare, while reducing inequalities at all levels.

In November 1999 close to 200 HSA representatives gathered in Toronto to coincide with the fifth trade ministerial meeting. The HSA members successfully consolidated their alliance and laid the groundwork for the Quebec summit. Unanimous resolutions were passed denouncing the clandestine nature of the FTAA negotiations and calling for greater transparency. In particular the member coalitions of the HSA are calling for the details of the Americas agreement to be made public in a timely fashion.

All the same, transparency issues are secondary to the more disturbing general trend. The FTAA negotiations under way have involved the creation of a partisan regime, one based on extensive collaboration between governments and the business sector. This system is even more selective and doctrinaire (if such a thing is conceivable) than that found at the multilateral level. This same strategy, while undoubtedly explaining the negotiations' stunning pace, has also lent credence to the rising tide of anti-FTAA sentiment and to the criticisms of the democratic deficit that has characterized the FTAA negotiations throughout the Americas.

FTAA opponents will be out in full force in Quebec City: the HSA's member coalitions, disturbed at the prospect of economic integration in the West, are far from being alone. Non-violent action groups, regional coalitions and issue-based groups from all over the Americas will also be making their presence felt. Moreover, events will not be limited to those held in Quebec City or Buenos Aires, where the sixth trade ministerial meeting takes place on 6-7 April, since the anti-FTAA groups will also be organizing parallel summits concurrently in other locations.

Opposition to globalization has become more entrenched since the events in Seattle, Prague and Nice. It remains to be seen, however, both in Quebec City and elsewhere, to what extent the various parallel anti-FTAA summits will be in keeping with the spirit of last January's World Social Forum in Porto Alegre (Brazil) and what contributions they will make to next year's forum.

About the Author: Dorval Brunelle is a Professor in the department of sociology of the University of Quebec at Montreal and co-director of the Groupe de recherche sur l'intégration continentale (Hemispheric Integration Research Group). Author of Droit et exclusion: critique de l'ordre libéral, L'Harmattan, Paris/Montreal, 1997

(1) The Plan of Action released at the conclusion of the first summit was reformulated and clarified at the second summit for heads of state and government held in Santiago (Chile) in April 1998.

(2) Caminando, Paris, December 2000.

(3) "La brecha de la equidad: una secunda evaluación" (The Equity Gap: A Second Evaluation), Economic Commission for Latin America (Cepal), Santiago, Chile, June 2000.

(4) Calculations are based on data published in the Bilan du Monde (World Assessment), Paris, 2001.

(5) The Plan of Action stemming from the second Americas summit states that governments agree to "facilitate private sector participation in local and transnational infrastructure projects, that can serve as a basis for bilateral and multilateral agreements."

(6) ABF-Canada, Document d'information, Fifth Americas Business Forum, Toronto, 1 November 1999.

(7) Copa made its request at the beginning of this year. See the Bulletin de la COPA, Quebec City, February 2001. It should be noted that Copa has its roots in an initiative of Quebec's National Assembly (Quebec's provincial legislature). In the eyes of the Canadian federal government in Ottawa, this has irrevocably tainted Copa. The Canadian government responded by proposing the creation of the Inter-American Parliamentary Forum (IAPF), to be placed under the auspices of the Organization of American States. The members of the IAPF would be determined by the executive-branch leaders. For the time being the Canadian federal initiative seems to have stalled.

(8) Argentina, Brazil, Uruguay and Paraguay.

(9) "Des alternatives pour les Amériques. Vers un accord entre les peoples du continent" (Alternatives for the Americas. Building a People's Hemispheric Agreement), preliminary version, October 1998, p. 5.

(10) The Chilean coalition is now called the Chilean Alliance for Just and Responsible Trade (ACJR).

Translated by Luke Sandford

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.