The Free Trade Area of the Americas (FTAA) is planned to be signed in the year 2005.  However, by means of Free Trade Agreements (FTA’s) between the countries of the American Continent and even the Puebla-Panama Plan (PPP), the implementation of the FTAA is already moving forward.  The FTAA will combine all of the negative effects of the FTA’s, and represents the sharp tooth of savage neoliberalism, by which huge multinational corporations promote and legalize their interests.  The World Trade Organization (WTO) is the frame of the rules imposed on the world’s economy, the FTAA is the continental expression, the PPP the regional and a FTA the bi- or trilateral.  But none of this could happen if it weren’t for the World Bank (WB) and International Monetary Fund (IMF), who impose structural adjustment measures on the governments of poor countries that are becoming more and more impoverished.

Saying No to the FTAA is not a demand that comes exclusively from the working and rural classes of the continent.  Nor is it just Non-Governmental Organizations (NGO) or indigenous people or women.  Nor is it the youth or the unemployed alone, or the gay or lesbian community; nor the defenders of human rights or ecological groups; unions, academics or professionals; political parties that have a little bit of common sense, a few lucid bishops, other churches or even business-people that also find themselves affected.  It is a demand of the whole of society.  Aren’t more than 200 million poor people in Latin America and the Caribbean, a number that keeps growing, sufficient to say Enough Already (Ya Basta)?  No single group can monopolize this cause, because it is the cause of millions of poor people across the entire continent.

What is at stake are the human rights of the continental population.  With the FTAA, we all lose.  Even the inhabitants of Canada and the United States, their workers, farmers, students and whichever other sector.  Today they try to make us believe that these neoliberal trade policies are a natural part of human evolution, of the process known as “globalization,” and not as the product of the imposition of certain interests against which the world social movement is developing, living and forming alternatives of inclusive, social and ecologically inclusive and responsible development.  The proposals are there, they exist and may have come from the Continental Social Assembly.  Successful alternatives are being carried out and lived today, however some people do not want to admit that another world is possible and they end up adoring the neoliberal god, or free trade.  They also do not want to admit that there are millions of reasons to reject the FTAA.  In this bulletin we outline some of these reasons:

INCREASING UNEMPLOYMENT

The North American Free Trade Agreement (NAFTA) caused the loss of jobs, workers’ rights, and the minimum wage in Mexico.  This only benefited large corporations.  In five years, 90% of 400 factories in the United States either closed or threatened to close down.  The FTAA will mean more unemployment and less protection of workers, since they will be obliged to compete among themselves to offer more work for less wage and rights.  This will be the only way to keep the company from moving to other poor countries, in Africa or Asia.  In the U.S., a half million jobs have been lost since the treaty took effect.  Approximately 28,000 small businesses have gone bankrupt in Mexico due to the entrance of foreign companies.  In Chile, the telephone company fired more than 4,000 workers between 1999 and 2002.  In Mexico, only last year, a half million jobs were lost.  And 48% of the new jobs that NAFTA generated do not provide benefits to the workers.  On the other hand, the FTAA will grant companies the right to bring professional and capable personnel from abroad, but free mobilization of workers and cheap labor will be maintained by the governments of their respective regions.

ENVIRONMENTAL DESTRUCTION

The policies imposed by the WB and IMF have, over several decades, caused environmental destruction around the world.  The incorporation of natural resources into the world market has caused overexploitation or these resources.  In 15 years of NAFTA, 15 U.S. logging companies have established operations in Mexico, and cutting and transportation activities have increased dramatically.  In the Mexican state of Guerrero, 40% of the forests have been devastated in the last eight years, and mass felling of trees has led to soil erosion, which is destroying the regional habitat.  But this is not happening in Mexico alone – it is also happening in Canada and the United States.  In Chiapas, the jungles are being rapidly deforested.  NAFTA and now the PPP allow immense plantations of monoculture farming of forest resources, specifically for exportation, which produce climactic change, privatize natural protected areas and pollute rivers and underwater reservoirs.  The experience of Costa Rica, where the government privatized natural protected areas by selling them to multinational corporations is a scandal that we should be alarmed about.

The FTAA will accelerate the degradation of the environment, by eliminating the right of the governments to pass rules that protect it.  It will place investment over concerns about environmental harm.  In the cities of Central America as well as the border zone between Mexico and the United States, pollution from residues of the maquiladoras and the careless discarding of chemicals, solvents and other products have increased not only environmental degradation but also health problems in the local population.

WATER SCARCITY

The FTAA will accelerate the process of privatization of water sources, as well as their distribution and commercialization systems.  This will raise service costs and expel the rural and urban population from water-rich lands.  Access to water will be more difficult for the poor of the continent.  When the government of Cochabamba, Bolivia privatized the water in favor of the U.S. company Bechtel, prices rose between 200 and 300%, causing protests and demonstrations during which protesters were killed and wounded.  The FTAA tries to introduce the logic of the market, merchandise and profits into all aspects of life.  The agreement will produce large extensions of monocultures that use up water, rivers and water sources and turn jungles and forests into deserts.  Eucalyptus and African palm plantations already abound throughout the region.  Privatization of irrigation districts is already being threatened.  At the same time, treating investment as an end will keep governments from impeding the construction of hydroelectric dams by multinational corporations, which will speed up the destruction of rivers.  Many dam-building projects are being planned all over the continent: Mexico, Belize, Guatemala, Honduras, El Salvador, Costa Rica, Colombia, Brazil, Chile, etc.

The paper industry and others require lots of water to be able to produce, which is why they are looking for ways to move to regions where there is an abundance of this resource that all of us need in order to live.  International Paper, Kimberly Clark, Coca Cola and other multinational corporations are also behind water privatization.

POVERTY IN THE COUNTRYSIDE

With the FTAA, privatization of natural and strategic resources will accelerate.  The fact that these resources are in the countryside means that their theft by large corporations causes the displacement of millions of rural poor.  As if that wasn’t enough, poverty will get worse because of several basic elements that the FTAA will impose: Latin American and Caribbean countries, but not the United States, will have to eliminate subsidies; poor countries will have to eliminate tariffs on products coming from the U.S., but the U.S. will maintain and even increase their own; poor countries will open their borders to any number of tons of every product, while the U.S. will maintain restrictions and close their own.  To this, we add the elimination of importation permits, quotas, price minimums, guaranteed prices, dismantling of rural credit and commercial institutions that are being privatized, reduction of public investment in infrastructure or technical assistance to rural farmers.  Women will be the most affected when they find themselves without access to land titles or credit and have been abandoned by their husbands who have immigrated to the U.S.

The FTAA plans on pushing the rural farmers out of the rural countryside, in order to make large scale production for exportation easier and to increase Latin American and Caribbean food dependency.  The European Union uses the same mechanisms.  In the end, the benefits will be accrued by the large food companies of the world.  Even now, five companies control 90% of world trade of grains – Cargill, Continental, Louis Dreyfus, Bunge and Archer Daniel Midlands.  The new agricultural rules of the FTAA will do nothing other than legalize robbery by these large corporations, with rules designed by their own hands in order to guarantee their security against the intervention of any government that tries regulation to solve its peoples’ hunger.

The United States as well as the IMF and the WB promote the indiscriminate opening up of the agriculture markets of poor countries, by means of structural adjustment programs that have been imposed since the 80s.  But let’s take a look at some examples.  The U.S. government raised its internal subsidies in 2002 by 80% to more than US$180 million over the next ten years, of which 60% of the direct payments are given to 10% of the companies.  Reducing production costs by 60%, the U.S. can modify world food prices and achieve dependence, which causes disasters in poor, small countries.  If we add to this the pressure being put on governments over the last 15 years to remove their own subsidies and aid programs to the countryside, we see that the FTAA will mean nothing more than violence and hunger.

Because of U.S. tariffs, Brazil has to pay a billion dollars every year to import its orange juice into the U.S. market.  However, at the same time the U.S. forces others to completely open their own borders, so that Colombia, for example, lost its production of wheat, barley and coffee, because they were no longer sustainable.  They no longer cultivate sorghum or soybeans; no more cotton; the milk industry is threatened; the country has begun to import sugar, they are no longer self-sufficient in corn and the chicken industry is about to go bankrupt.  In Mexico the price of corn fell by 45% and its importation has increased dramatically.  Haiti was forced to reduce its tariffs on rice from 35 to 3% in 1995.  Subsidized rice from the U.S. was allowed in and flooded the market, displacing 50,000 poor families that depended on rice production for their livelihood.  Now Haiti buys two-thirds of the rice it consumes.  The Haitian government does not charge tariffs on importers and now it is being forced to privatize its own scarce industries, meaning that it has no resources to buy food.  Their debt is rising as well as their dependence on the IMF and WB and the ensuing conditionality of the rules they dictate and impose.  Does that seem like justice to you?

The United States exports wheat at 46% less than its production cost, and corn at 25% less.  However, the U.S. puts obstacles on the importation of salmon and Chilean mushrooms, flowers from Colombia, Chile, Ecuador and Mexico; tomatoes and tuna from Mexico; and honey from Argentina.  Meanwhile, Texas cotton-producers received in 2002 around US$3.6 billion in subsidies, more than they received from selling their cotton, according to Oxfam.  In this way, small scale producers in Peru saw their country flooded with U.S. cotton, whose importation increased by 284% last year.  Is this free trade on an equal and level playing field?

According to Oxfam, there are 123 million people living in rural areas in Latin America and the Caribbean, which is 25% of the total population.  They depend directly or indirectly on agriculture to survive.  Of these, around 77 million (67.7%) life in poverty and 47 million in extreme poverty.  Farmers in the United States have also lost, since around 14.2% of the rural population is poor and more than 500 small-scale farming companies go broke every week.

Around 214 million people (43%) were living in poverty in Latin America in 2001.  Of these, 18.6% were destitute.  By 2002, the Economic Commission for Latin America and the Caribbean (CEPAL) calculated that 7 million more would be added to these figures in just one year.  In this way, free trade policies, elimination of subsidies and other support for the countryside, and reduction of workers’ rights have accelerated the poverty in the continent.  Poverty will only get worse under the FTAA.

LESS ACCESS TO EDUCATION

The FTAA will accelerate the privatization process of the education sector.  The state sets aside less and less resources towards the guarantee of universal access to education.  Constitutional changes are paving the way towards eliminating the states obligation to provide public education.  The Universal Declaration of Human Rights is becoming less enforceable.  In Mexico, Article 3 of the Constitution that obligated the government to guarantee primary and secondary education has been modified.  Nowadays, whoever wants education has to pay for it.

After selling state companies and eliminating tariffs, among other measures, governments are finding their pockets empty and are unable to attend to the demands of the population.  Without money they are forced to take out more loans in order to supply a poor education.  In Guatemala, this scheme is forcing teachers to work their fingers to the bone.  Teachers are paid by communities that receive state funds and pay their educators.  But in this way the state frees itself from this spending – contracts, offices and other necessary infrastructure.  The teachers are one of the groups that have mobilized across the whole continent against these privatizing measures.

The FTAA forces governments to accept the importation of technicians, researchers, scientists and specialized personnel needed by companies doing business in their countries.  In addition, it imposes an official sanction of lower salaries for the same professional services; the elimination of national standards for medical, legal and other professional permits, which allows doctors with a permit in one country to practice in all of the countries of the area, even if their training was different; the privatization of public schools under corporate control and the increase of profits.  The WB continues to put pressure on governments of the region.  Educational reforms tend to decentralize education, ripping it from the governments’ hands and balkanizing different state structures, disabling and isolating them in order to gain more effective control.

DESTRUCTION OF DEMOCRACY

The FTAA takes Chapter 11 of NAFTA to its fullest, granting foreign companies the right to sue a government if it does not follow the rules of the game, or blocks investment for any reason.  That is, even if a restriction is for the benefit or protection of public, social or environmental health and even if the supposed investment does not comply with the necessary growth requirements, does not generate jobs, or lead to the purchase of local goods, or generate local or regional development, etc.  All sanitary or environmental regulation, all governmental acts that a U.S. company decides goes against their potential profits, allows the company to sue that government before an international court where national laws don’t apply.

There have already been many lawsuits by companies against governments under NAFTA.  The following examples show us the norm of what will go on under the FTAA if it is not stopped.  The funeral chain of the Lowen group sued the United States government for US$750 million for fraud.  The U.S. Ethyl-Corporation sued the government of Canada for US$13 million in damages, since the government had demanded that the company stop using the dangerous gasoline additive MMT, a known toxin that attacks the human nervous system.  A Canadian company, Methanex, is trying to get rid of the prohibition of MTBE, another toxic additive for gasoline, in California, and is demanding that the government pay US$970 million in damages.  Metalclad, a U.S. company, sued the Mexican state government of San Luis Potosí for prohibiting them to keep using a toxic waste dump that was damaging both the environment and public health.  They demanded US$10 million from the Mexican government in compensation for the profits that they could have made.

In this way, state, departmental, provincial and national laws are becoming ineffective facing the undemocratic imposition of transnational laws that are dictated by the very companies that stand to gain.  Even international laws and agreements between states are relegated to the background by these laws imposed by corporations.  Thus, the People are losing juridical sovereignty.

In spite of constant calls to open and democratize the politics of trade, FTAA negotiations have been conducted in secret since the beginning of the negotiation process in 1994.  Representatives from hundreds of corporations are involved in the process, advising the U.S. negotiators and helping them to write the rules.  However, neither the People nor civil society are being taken into account in the FTAA negotiations.  This same structure of negotiation-imposition occurs at the Summit of the Americas, where the presidents of the continent meet.  Then there are the Ministerial Meetings where Trade Ministers meet to develop a work plan.  At another level we find the Vice-Ministerial Meetings of Trade, which take place every 18 months as a Committee of Trade Negotiations (CTN) and have the job of “directing, evaluating and coordinating” the Work Groups and advising the government Trade Ministers.  Finally, there are the Trade Group Meetings or negotiations established by the Trade Ministers that collect information about the current status of trade relations across the American Continent and that take place every 18 months.  In total, there are 12 Work Groups: Access to Markets, Public Sector Purchases (which, by the way, is coordinated by the U.S. and Canadian governments), Small Economies, Investments, Sanitary and Phytosanitary Measures, Norms and Technical Trade Barriers, Politics of Competition, Border Proceedings and Rules of Origin, Intellectual Property Rights, Services, Solution of Controversies and Subsidies, Antidumping Measures and Compensatory Rights.

Through these institutions, the business sector has become the most powerful sector of the continent, and it is the sector that meets with the governments to design the FTAA’s laws behind society’s back.  NGOs have demanded work groups on the issues of democracy, human and workers’ rights, consumer protection and the environment be incorporated, but have repeatedly been denied.

LOOTING AND PLUNDERING

By this we are referring to the issue of Intellectual Property, since it intends to regulate, privatize and remove the People from their own means of development, as well as steal their knowledge, their research, their science, their technology, their biodiversity, their life and whatever it is they have, tangible or intangible.  That means colors, flavors, ideas or widening the concept of “technology transfer” to whatever they want.  Making tamales, atole, pozole, pupusas, or other typical foods of a country will be able to be patented, arguing that it is a technology applied in order to produce something new.  The agreement on Patents, created in 1995 (the same year the WTO was born) did not complete its objective of guaranteeing property rights by recovering the costs of investment, stimulating innovation or contributing to development.  On the contrary, it did the opposite.  Any and everything ancient became a dollar sign and was made new so as to be patented.  And nature too, property of humanity for centuries and millennium, was turned into something private.

The monopoly of knowledge has been concentrated in the richest and most industrialized countries that control 90% of world investment in R&D, according to Oxfam.  This means that the countries of the Third World have to buy whatever knowledge and technology they require, since these companies own their intellectual property for 20 years.  The FTAA fortifies Intellectual Property Rights even more by denying the existence of Traditional Intellectual Property for indigenous people.  This will promote the theft of their knowledge, their plants and whatever genes can be found in their territories, in order to register them, patent them and charge for their use, distribution and consumption.  The bio-pirates are becoming legally constituted bio-corsairs, being given the power to steal all life forms from indigenous people – in whose lands almost 90% of the biological resources of the world can be found.  Indigenous people have historically diversified their seeds and enriched the world’s gene pool, and have maintained the world’s forests and rivers for centuries.

The immense diversity of plant and animal species is the primary resource of the biotechnology and seed industries, which produce genetically modified (transgenic) seeds.  But there are millions of indigenous and rural people in the world as well that rely on these plants and animals.  The FTAA tries to privatize all of this diversity of life with Intellectual Property agreements and to eliminate the right of the campesinos to conserve and reuse their seeds to create their own varieties; to free up companies from having to ask the permission of the indigenous and rural communities.  Monsanto, for example, has already sued farmers in Canada and the U.S. for harvesting their crops because of genetic pollution caused by the company’s seed on other lands.  In Brazil, Monsanto and Dupont already control 75% of the Brazilian market for corn.

For More Information: Mexican Network for Action on Free Trade (RMALC), www.rmalc.org; Common Frontiers, www.web.net/comfront; official web page of the FTAA, www.ftaa-alca.org and webmaster@ALCA-FTAA.org; CIEPAC, www.ciepac.org; Oxfam, issue 37, Comercio con Justicia para las Américas, January 2003; Interamerican Development Bank (IDB), www.iadb.org; World Bank (WB), www.bancomundial.org; International Monetary Fund (IMF), www.imf.org; Organization of American States (OAS), www.oas.org; Secretaría de Comercio y Fomento Industrial (SECOFI), www.secofi.gob.mx; International Forum on Globalization, www.ifg.org; “ALCA, proyecto para la Anexión,” Osvaldo Martínez, Director of the Center of Investigations for the World Economy, from The Economist, February 2002, www.cubaminrex.cu; Global Exchange, www.globalexchange.org; Newspaper “Trabajadores,” Alianza Social Continental: Alberto Arroyo, Results of NAFTA in Mexico, Mexico, December 2001.

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