No free Trade At All

GRAIN

The Free Trade Area of the Americas (FTAA) is a free trade agreement being negotiated by all the governments of the American hemisphere except Cuba. Its objective is to impose common rules for the entire continent to open up national activities to the free flow of global capital. This agreement will be even more wide-reaching than the World Trade Organisation. The FTAA will result in many restrictions on the rights of all citizens, but especially wage earners, small farmers and indigenous peoples. In contrast, transnational investors will receive a level of protection never before experienced.

Although it is called a “free trade” agreement, the Free Trade Area of the America (FTAA) is all about restricting and controlling trade in favour of the major global enterprises. The FTAA, if approved, will not only affect trade, but also production, services and property rights over land, water and natural resources. Many economic activities, especially small farmer economies, will be put under immense stress. Civil rights and human rights, the rights of local communities, the rights of indigenous peoples, labour rights, the right to knowledge and culture and basic forms of sovereignty will be even more restricted than they are today. We will see the privatisation of remaining public spaces and activities, and we may be confronted with new forms of repression that do not exist today. If the FTAA is approved, it will have a profound impact on the economic, social and political life of American peoples.

The FTAA was first proposed by US president George Bush senior in 1994. It includes 34 countries: all of the Americas except for Cuba. From the beginning, the agreement was presented as something more than an economic agreement. Participating countries would also take on a series of political commitments, in terms of their domestic policies (such as those aimed at promoting privatisation and decentralisation) and also for international actions (with a greater commitment to expanding free trade agreements). Meanwhile, each of the summits has been used by the US to achieve support for its attacks on Cuba and for the militarisation of the Americas (such as the imposition of Plan Colombia). From 1994 to 1998, negotiations focused on defining structure and organisation. Substantial discussions began in 1998, and are scheduled to conclude on December 31, 2004. The agreement should come into effect a year later, pending approval from all the participating countries.

So far, negotiations have been very secretive. Although the negotiating texts are publicly available,1 the positions of each country are kept secret. Even some government officials feel they are in the dark – the Chilean Minister of Agriculture said that he was unaware of what Chile had bargained for on agriculture in the FTAA. Meanwhile, the only governments that have expressed any explicit opposition to the agreement have been Brazil and Venezuela. Brazil is worried that the FTAA might make the Mercosur (a common market being established between Argentina, Brazil, Uruguay and Paraguay) totally irrelevant. The President of Venezuela has indicated he will not sign until the agreement is approved by a national referendum. Nonetheless, negotiations on the FTAA are proceeding.

The negotiations have progressed through three Presidential Summits (or Summits of the Americas – in Miami in 1994, Santiago in 1998 and Québec in 2001), seven ministerial meetings (once every 18 months since 1995) and a long series of meetings of negotiating groups and committees. The Presidential Summits are the final decision-making fora, while ministerial meetings review the agreements achieved by negotiating groups and provide instructions for the following rounds.

Nine negotiating areas have been defined: market access, agriculture, services, governmental purch-ases, subsidies and anti-dumping, competition, intellectual property, dispute resolution and investments. Officially, the negotiations are strictly governmental. But business representatives have participated from the outset. The Business Forum of the Americas is the only non-party (only governments are parties) to have presented formal proposals for negotiation. Business participation in the negotiations has become so ‘official' that documents produced by the Business Forum of the Americas are published on one of the sites alongside official information on the FTAA.2 The participation of other social sectors has been very restricted. The Committee of Governmental Representatives on the Participation of Civil Society only accepts opinions by e-mail, using a rigid format. There is no mechanism to assure that such opinions will be heard.

The ideological framework

To fully appreciate the possible impact of the FTAA, it is helpful to remember three premises. First, the FTAA is part of a broader privatising offensive being pushed through international mechanisms and agencies, including the World Trade Organisation (WTO). This means the agreement not only creates new for-mats for trade and private property, but also imposes a new ideological, legal and political context to define relations between transnational capital, national states and the peoples of Latin America. The FTAA will impose laws, concepts and definitions that will soon affect all aspects of national activity and experience, in order to assure that transnational capital will have no limits and guarantee its profits. The final objective is for every aspect of the lives of a country's people to be controlled by the market, with rules assuring that the entire population will submit to these conditions.

The second premise is that the final text of FTAA will be interpreted every time it is applied. While some of its provisions are extremely detailed, most of them cannot be applied directly or literally, but rather set boundaries for making legal, legislative, economic and political decisions. Interpretation will be put in the hands of individuals or agencies who accept privatisation as the supreme dogma. This will be done in a setting in which states and transnational corporations have been put on virtually equal footing in terms of authority and empowerment. Because of this, it would be foolish to expect that any FTAA ‘overkill' will be worked out once its provisions have been set in place. The current negotiating text already has extremely dangerous provisions, and their future interpretations may be even worse.

Finally, the FTAA creates, transforms or re-writes – explicitly or implicitly – a series of economic, legal and political concepts. For example, a number of government functions, including “activities that are part of a national security system or to establish or maintain public order”, are reworked into “services” and then opened up for “delegation”, meaning the privatisation of public power. Many examples of this are found throughout the text.

It is extremely difficult to foresee fully all of the FTAA's impacts. What we do see is an attempt to launch a powerful apparatus to guarantee the rule of transnational capital over the entire continent. It goes unimaginably far beyond the privatisation and concentration already achieved in the Americas, and must be urgently understood – and rejected.

Political context

It was no accident that the FTAA was first pushed by the US government, whose key objective is to achieve the unfettered expansion of transnational capital in the Americas, and most particularly US capital, which already controls about 80% of the region's production. The US has always used regional imbalances to impose its will, and since the beginning, the FTAA negotiations have forced all countries involved to act as a bloc in the WTO.

Then it started breaking the process down into bilateral negotiations between the US and several countries in the region (none of them having advanced far to date). This was a deliberate strategic move on behalf of the US to avoid any chance of a Latin American and Caribbean negotiating bloc emerging, and to be able to pressure any country that might show some degree of independence. With the active complicity of Chile and Costa Rica in particular, this strategy is likely to work. What is more, the US continues to use other negotiating processes, such as the World Intellectual Property Organisation (WIPO) and the WTO, to pursue its own objectives, since whatever is agreed in those fora will automatically be incorporated into the FTAA.

As an economic strategy, the FTAA is the revival of the Multilateral Agreement on Investments, an agreement once proposed by the Organisation of Economic Cooperation and Development but later abandoned after strong social opposition, particularly in Europe. It also adds teeth to the North American Free Trade Agreement (NAFTA). For example, the investment chapter of the FTAA is a close copy of the corresponding NAFTA chapter, but with an even more dangerous definition of “investment”. The ongoing destruction of peasant farming in Mexico through the exacerbation of poverty and intensification of migration is a clear indication of what the FTAA may bring to the rest of the hemisphere Meanwhile, although the FTAA is now the most important multilateral negotiating process underway in the Americas, it is not the only free trade treaty being negotiated. There are more than a dozen other bilateral and multilateral negotiations going on involving countries of the Americas, and even more agreements that have already been signed. Most important are the agreements with the EU and the above-mentioned attempts by some Latin American countries to gain special agreements with the US, with even worse strings attached than the FTAA. The problem is not just the FTAA but the advance of privatisation and the power of transnational capital. But while any reaction to the FTAA cannot ignore the other negotiations, the FTAA is one of the most aggressive and ambitious of all the processes now underway.

Supermarkets, which are alredy rapidly expanding in Latin America, will replace local markets like this one in Ecuador

 

Nuts and bolts of the FTAA

Latin American rulers recognised from the outset that the FTAA is a political agreement aimed at creating new environment for economic activity and the expansion of big capital. This new setting will be founded on at least the following six pillars:

What this all means is that states and governments will not only lay down their duty to defend the well being of their populations, but renounce whatever limited sovereignty they still enjoy today. Through many different points in the agreement, it is made clear that the central role for states and governments will be to repress their citizens in order to protect capital interests.

Impact on local communities

Because peasant sectors and indigenous peoples have held out the longest against the advance of transnational capital and globalisation, they will be amongst the sectors most violently attacked by the FTAA. This aggression will be effected through three major tools designed especially for the rural world, along with the agreement's more general measures. The three specific measures are:

 

The first two of these measures are discussed in detail in the longer briefing (see details at the end of the article*), but here we will focus on the privatisation of biodiversity.

The privatisation of biodiversity
Control over and privatisation of territory necessarily implies the control over and privatisation of biodiversity. Transnationals have many reasons to want to control both, some of which are:

a) Biodiversity is the fuel for industrial products
Biodiversity (plants, animals, micro-organisms) is the original source of chemicals and raw materials that will probably be the basis for all future industrial development. Biological sources are expected to provide and to produce pharmaceuticals, agrochemicals, medical material, organs for transplants, building material, energy, raw materials for all kinds of industry and almost any element that can be manufactured.

b) Biodiversity sustains the balance of life
Biodiversity is also a fundamental factor that keeps our planet operating within appropriate limits for human life. Yet this balance is becoming more precarious. Factors such as the stability of climate, availability of fresh water, regulation of river flows, the existence of ecological niches that allow species to survive, etc. are gifts from the planet that today cannot be taken for granted. Today, controlling biodiversity and all the ecosystems that nurture it means controlling who gets these gifts and being able to charge for them.

c) Biodiversity = mineral resources
The Latin American ecosystems richest in biodiversity are also the richest in oil and minerals. Yet biodiversity is life and as such easily escapes from any control. While someone may claim a plant, animal or micro organism as their exclusive property, it will continue to reproduce without permission and sooner or later will come into the hands of someone else who will continue to use, change and multiply it. This ‘danger' is all the more certain when the plant, animal or even micro organism falls into indigenous or peasant hands, because it is they who have used, cared for and nurtured the planet's biodiversity for thousands of years and they will find a thousand ways to continue to do so in the future. Transnational corporations have realised that they need to monopolise both biodiversity and the knowledge associated with it, most of which is currently held by local and indigenous communities. To that end, the FTAA sets out an intellectual property system that goes far beyond the provisions of the WTO or the World Intellectual Property Organisation (WIPO). Some of the characteristics of intellectual property under the FTAA are:

We can only imagine various scenarios at this point, but bioprospecting practices to date, along with control mechanisms now in place around privatised maritime and natural zones, give some insight into the mechanisms most likely to be used. The first is that access to areas with biodiversity and to the plants, animals and micro organisms that live there will be under the absolute control of those who have appropriated those areas. If anyone removes plants or animals from such areas, the material would be confiscated and the people would be fined, the same applying to unauthorised reproduction of such organisms. If a company authorised the extraction and use of living material, this could be done under very specific and restricted conditions.

A second situation is that the knowledge of entire peoples and communities will be transferred to companies upon payment to an individual or group of individuals. Once declared the property of a corporation, all the peoples and communities that used and developed the knowledge will be obliged to refrain from disseminating or even using it. Those who do could be fined or even imprisoned. Any new variety of cultivated plant will have to be grown according to the instructions given by the seed companies. In no case can the plants be reproduced. If plants are patented, the companies could even control use of the harvest. If traditional varieties are cross-bred with patented varieties, their use may be prohibited by the patent holders, or they may demand payment for the right to continue planting the offspring. The same rule would apply if a traditional variety has traits that a company has patented, even if the trait was in the local variety long before the company got it.

All of this paints a picture in which the planting of local varieties will be progressively stamped out, even for family use, and those farmers who remain on the land will be obliged to use varieties that are patented or otherwise protected by intellectual property. Such crops will have to be grown under the conditions and for the purposes determined by industry. Industry will have total control over what is planted, consumed and marketed.

Meanwhile, biodiversity-rich zones owned by transnational companies will be exploited to extract mainly oil and biological material, under privately-set rules. As the concept of “environmental services” develops and expands, we may see the imposition of fees by companies that local communities will have to pay for assurance that the company will not destroy the plant cover on territories they have taken over. Communities will not only have to pay for the water but to maintain the sources of water. They may have to pay for every year without natural disasters or extreme temperatures, or for each harvest that was not wiped out by a flood or ruined by a drought. As absurd as all this may sound, the FTAA negotiating text makes it possible. What is more, a government could be accused of expropriation if it does not impose such payments.

The first thing we will see is the ruin and probable expulsion from the countryside of huge numbers of peasants and indigenous people, along with the total disregard for indigenous peoples' territorial and cultural rights. We will see the physical appropriation of territories by transnational corporations, which will be protected by special rules and authorities defined by private agencies. Biodiversity in wild areas will be controlled by big companies and agricultural diversity will be pushed aside for lack of markets or simply declared illegal. Local and indigenous knowledge will become business property and the peoples who created it will have to refrain from sharing or using it. Those who remain or who are allowed to remain in rural areas will have to obey the rules set by transnational companies, possibly as cheap, unprotected labour. Finally, both rural and urban populations will have to pay the companies to maintain the land which they inhabit and for all the resources they need to live.

This is an absurd aberration, made possible by the FTAA.

* This article is shortened from a longer report which can be found on the GRAIN website at www.grain.org or on request from GRAIN. The longer report examines in more detail the provisions of the FTAA with respect to agriculture and how the FTAA will lead to the privatisation of natural resources and territories, including indigenous lands.

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Reference for this article: GRAIN, 2003, No Free Trade At All, Seedling, April 2003, GRAIN

Website link: www.grain.org/seedling/seed-03-04-1-en.cfm

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