Due to the United States economic crisis and the after-effects of the September 11th attacks, the Bush administration has accelerated the process of negotiating free trade agreements (FTAs).  Through these agreements, the U.S.A. seeks to dominate the market, access to raw materials, labor, prices, trading routes, and, clearly, consumers themselves.  The U.S. strategy is based on three tactics. These are: 1) Accelerating bilateral trade agreements with Latin American countries (in Central America, Chile, etc.) in order to implement the principles whose full implementation is being delayed by opposition to the Free Trade Area of the Americas (FTAA).  2) Advancing in agreements with other countries before the Fifth Ministerial Summit of the World Trade Organization (WTO), which will take place in Cancun, Mexico from the 10^th to the 14^th of September and which will be protested around the globe.  And 3), meeting in summits with Latin American governments before and after the WTO meeting.

During June of 2003, economics ministers from many of the countries closest and most subservient to Washington´s policies have met with U.S. Trade Representative Robert Zoellick.  Among them are the governments of Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, El Salvador, Jamaica, Mexico, Panama, Peru, the Dominican Republic, and Trinidad and Tobago.  These sealed meetings point toward the ministerial meeting for the FTAA which will take place in November 2003 in Miami, Florida, two months after the WTO meeting in Cancun.  The U.S. government will then have only one more year, 2004, in which to close all of the negotiations for the most terrible free trade agreement that has ever existed, given that it hopes for the FTAA to come into effect in 2005.  

In order to continue to highlight the positions of different groups on the FTAA, we reproduce here examples of the Churches’ positions.  In their February 2001 meeting in Haiti, the presidents of the Conferences of Religious People of North America, Latin America, and the Caribbean, who represent over 270,000 people of faith from the American continent, declared that, “We believe that the agreement (the FTAA) has serious problems with its proposals ... Our experience has shown us that the implementation of similar agreements has not obtained the promised results or promoted the common good.  Daily, we observe the effects of the economic policies of the free market on the residents of our countries: displaced peoples, destruction of local cultures and economies, a growing number of homeless, deterioration of health and education services, exploitation of women and children, and unemployment ... ”

THE CHURCH IN NORTH AMERICA

In January 2002, the Commission for Social Issues of the Humanizing the Global Economy conference published the report “Selling the Future.” It is a reflection on the relationships between states and investors under NAFTA and under the proposed FTAA, sponsored by the Canadian Conference of Catholic Bishops, the Latin American Episcopal Council and the United States Conference of Catholic Bishops.  In it, the bishops state, “Free trade agreements are a new and controversial experience for Canada.  Among the concerns over NAFTA, a very important one is the right, granted by the treaty, for powerful private companies to sue states for apparent lost profits.  These suits threaten the sovereignty of states, the ability to legally protect the environment, and the democratic participation of people in their future governments.  This situation demands from the People of God a serious reflection in the light of faith and of Catholic social thought.”(www.cccb.ca)

The bishops summarized the hemispheric economic process: “The FTAA represents the final effort in the process of trade and investment liberalization.  The agreement is modeled on NAFTA, signed in 1994 by Canada, the United States, and Mexico.  In fact, the FTAA is described as an expanded NAFTA.” Their analysis states that gap between rich and poor in all three countries continues to grow, while a handful of people at the top regulate trade rules for their own benefit, excluding the majorities from the benefits of a equitable development.

According to the bishops, “These negotiations have been carried out behind closed doors, excluding not only citizens but also organizations from participating in analysis and debate of the FTAA´s propositions.” This is the way in which governments, supposedly representatives of their citizens´ will, delink themselves more and more from the people who put them in power.  The bishops´ analysis summarizes this process: “Serious indicators permit us to see the way in which trade and investment could separate from all forms of citizen control and from the authority of democratically elected governments, leaving transnational corporations (TNCs) and trade tribunals to operate independently and secretly.”

The bishops use four specific examples to analyze governments’ loss of sovereignty and TNC’s corresponding gain.  This loss becomes even more serious under the FTAA for the weakest countries in Latin America and the Caribbean.  It is to be hoped that the micro, small, medium, and even large businesses understand that the FTAA and FTAs are not designed for all the business sector, but rather to bring medium- and long-term benefits to large TNCs, which are buying up and merging with everything they find in their way, steamrolling over a struggling and ever-more-indebted business sector. 

To give ourselves an idea of what would happen under the FTAA, let us examine the effects of NAFTA.  The objective of Chapter 11 of NAFTA, on Mechanisms for Relationships between the State and Investors (see case studies by the Continental Social Assembly at www.noalca.org), is to limit or eliminate the capacity, the sovereignty and the obligation of governments to protect health, human rights, and the environment, among other public goods.  In 2001 alone, around 15 suits have been brought by companies against the governments of North America.  Although these are very secretive processes, using available information we can get an idea of the magnitude of what is happening.

FIRST CASE: The U.S.-based Ethyl Corporation sued the Canadian government in 1997 for having prohibited it from importing gasoline with the additive MMT, which is toxic for human health and the environment.  The tribunal found in favor of the corporation and ordered Canada to pay it US$250 million to compensate for lost profits.  Finally, the Canadian government decided to settle out of court, paying Ethyl Corp. $13 million and lifted the prohibition on the additive.

SECOND CASE: In 1998, the U.S. corporation S.D. Myers Inc. sued the Canadian government for US$30 million for prohibiting the export of toxic PCB-contaminated waste between 1995 and 1997.  The waste began to reenter Canada in 1997.

THIRD CASE: In 1999, the Canadian company Methanex Corp. sued the government of the U.S.A. for US$970 million over the state of California´s 2002 ban on MTBE, a gasoline additive which can contaminate aquifers.  The corporation argues that this environmental-protection law has reduced its profits.

FOURTH CASE: The U.S. corporation Metalclad sued the Mexican government in 1997 for not allowing it to continue its waste-disposal business, which had already contaminated water and caused health risks for the population in the state of San Luis Potosi.  The government had declared the dump an ecological zone and ordered the closing of Metalclad’s plant.  Metalclad demanded compensation of US$90 million, and in 2000 the NAFTA tribunal found in its favor, ordering the Mexican government to pay the corporation over US$16 million to cover the costs of its investment.

These are only a few examples of what would happen if corporations manage to include Chapter 11 provisions in the FTAA.  It would allow them to operate in secret, with impunity, and with the rights to evade national laws.  The bishops´ response to this situation is, “Those who support free trade agreements describe them benignly as easy and simple means to promote the exchange of goods between countries.  In fact, however, the treaties are less about trade than they are about investment, permitting corporations to move capital to wherever is most advantageous for them.  Curiously, under these treaties, including NAFTA, capital is permitted to cross borders without impediments, but workers are not allowed to move freely.”

The social struggle is now found all over.  For the bishops, “Canadians are publicly pressuring their government as they realize that NAFTA, and in particular Chapter 11, erodes the power of all levels of government, in their capacities to provide public services and to act in the best interest of their citizens. ... Both citizens´ groups and civil society groups are proposing an alternative to the current rules on trade and investment.  They believe that trade regulations should ensure respect for basic human rights, workers´ rights, the environment, and the rights of indigenous groups, as defined by international agreements, and that all these should take precedence over the rights of investors.”

In their analysis, the bishops add that, “The real income of salaried Mexican workers declined 25% from 1991 to 1998, while the incomes of self-employed workers declined 40%.  During the 1990s, the purchasing power of the minimum wage in Mexico declined almost 50%.  In manufacturing, salaries declined 21% between 1993 and 1999.”

However, although for the bishops, “Today, poor countries are forced by the World Bank and the International Monetary Fund to deregulate their economies,” the effects of neoliberal policies are affecting many sectors of the rich countries as well.  The bishops state, “Purchasing power, both from salary and from other forms of income, has declined in each country for the majority of people.  At the same time, social programs that protect citizens and the environment have been disappearing. ... In Canada, the wealthiest 20% of families increased their share of the country´s total income rise from 41.9% to 45.2% in 1998.  The bottom 20%, on the other hand, saw its share decline from 3.8% to 3.1% of national income. ... NAFTA eliminated an estimate 760,000 job opportunities in the United States between 1994 and 2000, and the trade deficit between the U.S. and its northern and southern neighbors increased substantially.”

It is to be hoped that the governor of Chiapas, Pablo Salazar Mendiguchía, understands what the bishops have so clearly captured.  He wants to put Chiapas in debt to the World Bank, a course which would lead the state to atomization and greater poverty.  The Bank has already completed a first study and set of “suggestions” of policy adjustments for Chiapas, focused, as usual, on increasing government revenue through taxation in order to service the debt.

From 1998, the 29 countries of the Organization for Economic Cooperation and Development (OECD) were secretly negotiating the Multilateral Agreement on Investment, intended to apply to all the countries of the world.  These plans provoked international alarm, which apparently halted them.  In that year, the Commission for Social Issues of the Canadian Conference of Catholic Bishops sent a letter to the Canadian Minister of Commerce in which it expressed its “great concern” over the support of its government for the MAI.  The Commission described the agreement as “a development strategy based on trade liberalization, deregulation, and economic privatization.”  The bishops feared that the MAI would further strengthen transnational corporations “at the cost of weakening other actors at the local, regional, and provincial levels.”  The bishops also indicated to the Minister that “all rights, including those to property and free trade, should be subordinate to the common good.” 

Nevertheless, the objectives sought by the MAI were negotiated in other forms, such as in NAFTA, the Plan Puebla Panama, the FTAA, and the WTO.  But the Canadian bishops did not let down their guard.  Again in 2001, the Commission sent an open letter to Canadian legislators, urging the parliamentarians to “work for the common good and with the goal of eliminated economic exclusion.”  The bishops pointed out the growing gap between the richest and poorest Canadian families and the continuing poverty among women and children, a poverty which is growing “while the budgets for social, health, and work-related programs are shrinking.”  This reduction in the role of the State, as we can see, is now invading the richest countries as well.

In the letter, they warned of the “shameless pursuit” of profit by industry which increases environmental destruction.  Nevertheless, the presidents will meet again in 2001 in the city of Quebec, in a zone protected by wire fences and thousands of police, to continue negotiations behind the backs of the continent´s citizens.  More than 60,000 people from all the countries of the continent protested, marched, and demanded to be heard.  The response was deaf ears and repression.

Surprisingly, in that moment, the archbishop of the city of Quebec, who is the highest-ranking Catholic leader in Canada, came out in defense of the continent´s people.  He bravely stood up to the economic powers gathered there, where the world’s largest and most powerful corporations danced in unison with the presidents and their ministers.  In an press conference, the archbishop of Canada presented the document “Let none be excluded,” and proposed that it be approved by the Permanent Council of the Canadian Conference of Catholic Bishops and prepared in conjunction with the archdiocese.  In it, he cites a paragraph of Pope John Paul II´s Ecclesia in America from 1999: “If globalization is guided exclusively by market laws applied according to the convenience of the powerful, it will lead to negative consequences.  These include attributing an absolute value to economic concerns, unemployment, the reduction and deterioration of public services, and unfair competition which puts poorer nations in a situation of increasing subordination.” 

The Permanent Council added, “It is evident that the creation of wealth does not by itself lead to a more equitable distribution of that wealth, and that the ´new economy´ produces greater inequality at a rate even higher than before.”  They stressed that reflection must be at the center of contemporary economic theories, in the sense that governments have received the mandates of their citizens to promote the common good, and therefore that they should not abandon their powers of intervention.  If that were to happen, governments “would become impotent in the face of economic forces able to increase production and wealth but incapable of guaranteeing a just distribution of those benefits.”

Los obispos canadienses han dado muestras de mucho valor ante el poder y le retan a enfatizar en los derechos humanos y las estructuras democráticas, y promover un desarrollo que respete la dignidad de individuos y comunidades. Lo que no queda claro para muchos obispos de América Latina y el Caribe coludidos con el poder, para ellos su misión queda clara: “¿De qué forma puede la economía ayudar al pueblo a vivir en dignidad y plenitud, libre de la penuria y la miseria? ( ... ) Con el desarrollo del ALCA, la Iglesia debe de prestar aún más reflexión ética a estas temas tan críticos”. (http://www.wcc-coe.org/wcc/what/jpc/argentina-s.html)

The Canadian bishops have acted courageously toward the powerful and have challenged them to emphasize human rights and democratic structures and to promote a form of development which respects the dignity of individuals and communities.  Their mission is clear to them, although it is not clear to many bishops from Latin America and the Caribbean who collude with the powerful: “How can the economy help the people to live full lives with dignity, free of penury and misery? ... With the development of the FTAA, the Church should provide even more ethical reflection on these extremely critical themes.”  (http://www.wcc-coe.org/wcc/what/jpc/argentina-s.html)

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