Free Trade Area of the Americas favors only corporate interests
April 11, 2001
When thousands of people converge on Quebec City, Canada, in late April, they will probably receive a great deal of ridicule. They will be there to protest the Free Trade Area of the Americas (FTAA) -- an expansion of NAFTA to the entire hemisphere.
Pro-free trade politicians and pundits will almost certainly dismiss the protesters as misguided, misinformed and just plain mistaken. Free traders will also try to brand the protesters as "protectionists."
It's a curious label, since free trade is fundamentally protectionist -- it protects big business, and most everyone else loses.
Free-market fundamentalists like to say that free trade benefits everyone. But treaties such as NAFTA and the proposed agreement put the interests of investors and multinational corporations above environmental protection, human rights and the needs of working families.
NAFTA has already proven unfavorable on labor issues. In the United States, almost 400,000 jobs have been lost due to the trade agreement, and those who are still working in occupations affected by NAFTA are receiving, on average, only 77 percent of the wages of their earlier pre-NAFTA employment, according to Public Citizen's Global Trade Watch.
What's more, since the trade agreement has been implemented, 1 million more Mexicans earn less than the minimum wage, and 8 million families have slipped from the middle class into poverty, Public Citizen reports.
Under NAFTA, several "investor-to-state" lawsuits have resulted in reduced government powers to protect the public interest. These lawsuits grant corporations -- but not citizens or nongovernmental organizations -- the ability to sue foreign governments. If a corporation feels that a certain government regulation diminishes its potential for future profits, it can sue the government for damages.
In a 1998 case, Canada dropped its ban on the chemical MMT -- a fuel additive linked to nervous system damage -- after the U.S.-based Ethyl Corporation used the NAFTA dispute mechanism to challenge the law.
And in August 2000, a NAFTA tribunal forced Mexico to pay $16.7 million to a U.S. corporation after a Mexican state government prevented the company from reopening a hazardous waste-disposal center.
Finally, a case is currently pending under which the United States may have to pay almost $1 billion to the Canadian corporation Methanex because of a California phase-out of the fuel additive MTBE, which is poisoning the state's ground water.
U.S. trade negotiators are pushing for the proposed free trade agreement to include similar investor-to-state lawsuits.
The rules for intellectual-property rights for FTAA also protect corporate interests at the expense of those who need life-saving drugs. The pharmaceutical industry has pushed hard for strict patent regulations, arguing that unless its products are guarded, there will be no financial incentive to produce new drugs.
The pharmaceutical companies' greedy position jeopardizes the lives of millions of people. New monopoly patent rules and limits on patent exemptions contained in FTAA will constrain the ability of governments to produce generic versions of the life-saving drugs their populations need.
While the proposed free-trade agreement goes to great lengths to protect corporations and investors, it does nothing whatsoever to defend the environment, labor rights or human rights. The Bush administration says it will fight the inclusion of even watered-down labor and environmental "side agreements" like those contained in NAFTA.
The imbalance between corporate interests and other values is not too surprising when you consider how FTAA is constructed. While citizens groups -- and even members of the U.S. Congress -- are locked out of the negotiations, corporations have been helping write the rules of the FTAA. More than 500 corporate representatives enjoy the security clearances needed to review the FTAA documents, according to Public Citizen's Global Trade Watch.
It's not bad to want to protect something. We should protect good-paying jobs. We must protect human rights. We need to protect the environment. Unfortunately, free-trade agreements do none of these things -- they merely guard corporate interests. Let's hope that someday, international trade and finance agreements will be truly protectionist, in the best sense of the word.
Kevin Danaher is a co-founder of the human-rights organization Global Exchange in San Francisco. He is the author of "Democratizing the Global Economy: The Battle against the World Bank and the International Monetary Fund" (Common Courage Press, 2001). He can be reached at pmproj@progressive.org.