FTAA-The Nature of the Beast

By Harold Lavender
New Socialist Magazine January/February 2001

As the Canadian government forges ahead with plans to host the Summit of the Americas in Quebec City beginning April 20, the opposition is organizing and mobilizing against the Free Trade Area of the Americas (FTAA). 34 leaders of the so-called "democratic states of the Americas" (excluding Cuba) will discuss the capitalist future of the Americas.

One agenda item, although far from the only one, will be progress towards the FTAA. For the first time, a proposed draft text will likely be ready for closed-door discussions among hemispheric countries. Secret committee negotiations have laid the groundwork, and hemispheric leaders hope to sign, seal and deliver the FTAA by the year 2005.

The FTAA is another attempt to push the neo-liberal agenda of "free trade", deregulation, privatization and international corporate rights. It is a means to advance the agenda of global capitalism or "imperialism."

A public outcry helped stop the adoption the Multilateral Agreement on Investment (the MAI, an investors' bill of rights). Mass protests helped ensure that a new round of World Trade Organization talks didn't take off at Seattle, although efforts are being made to revive discussions. But what can 't be brought in by the front door can sometimes be slipped in through the back door in agreements like NAFTA and its proposed extension, the FTAA.

Vigilance and mass mobilization are essential. However, mobilization is most effective when linked to clear demands and a clear political strategy.

The Chretien government is leading the snow job on the FTAA. Most of the Summit of the Americas agenda is composed of benign sounding discussion baskets. The Quebec City will be folllowed by pious Summit declarations, noble draft preambles to the FTAA, an avalanche of technical and legal jargon and a smokescreen of increased consultation with "civil society." They have less credibility than the mumbo-jumbo around NAFTA.


From NAFTA to the FTAA

NAFTA, which came into effect January 1994, was the first step toward creating an exclusive tariff-free zone in North America, dominated by US and Canadian imperialist capital.

The Mexican economy is now experiencing economic growth (after going through the fall of its currency, the peso). There has been a spectacular increase in the number of billionaires in Mexico. However, under "free trade" policies, workers' wages and social services have been dramatically slashed, communal lands have been opened to privatization (sparking the Chiapas rebellion that is still shaking Mexico) and some 20 million more Mexicans have fallen below the poverty line. Mexico's integration into the world economy is largely taking place through the rapid expansion of low-wage maquiladoras or special export processing zones.

In Canada, trade deals have been part of economic restructuring, jobs loses, the gutting of social programs and heightened socio-economic inequality. International capital flows have dramatically increased in the 1990s. Canadian capital is among the world's leading foreign investors. Investment in mining, construction and engineering services has boosted Canadian investors' stake in Latin America to over $30 billion. And Canadian imperialist capital wants much more.

US President Clinton, in conjunction with Canadian and Mexican elites, pushed NAFTA through the US Congress and got the ball rolling for an FTAA in 1993. The second Summit of the Americas in Santiago, Chile, in 1997, adopted the goal of an FTAA and process to get there. However, the US was not able to take a big leadership role because fast-track legislation, which would have given the US administration sole power to negotiate the terms of trade deals, was defeated in the US congress due to opposition by a variety of forces including the US labour movement. Reports suggest that incoming President Bush, who wants to increase the "US leadership role in the hemisphere," will make passage of fast-track legislation a central priority in the new year.

Over the last several years, the Chretien government has emerged as the chief salesperson for the FTAA. Canada's leadership role is reflected in the holding of the third Summit of the Americas in Quebec City.

What's at risk

The terms of the FTAA deal will be in line with the worst features of the World Trade Organization. However, the FTAA can go farther. That means it can be used to pressure the WTO to adopt policies that it has failed to agree on because of opposition inside the WTO and, most critically, in the streets.

NAFTA's chapter 11 on investments in many ways better serves corporate interests than current WTO rules. Under Chapter 11, foreign corporations can sue for compensation when the policies of a country restrict trade. High profile losses have left the Canadian government reluctant in this area. However, it appears that the US (with allied neo-liberal governments) wants very strong "investor protection" written into the new FTAA.

Perhaps the most threatening area under negotiation is services. Here, the Canadian government refuses to release its position. The Chretien government claims to be safeguarding health and education. However, the services negotiations could be the lever for a very powerful push to privatize services, as well as opening the huge field of government procurement (by axing local content rules). The biggest push appears to be on the privatization of education services (Canadian corporations and institutions are active in this area, and see themselves as leading world players in an expanding and very lucrative field).

The services discussion has vast sweep. FTAA negotiations include public services in all sectors -- including education, health, corrections and prisons, libraries, museums and cultural programs, water, sewage and more. In other words, we have a potential recipe for a neo-liberal paradise (or hell, depending on who you are) in which potentially profitable services would be privatized and opened to foreign investors. Government would be largely limited to a regulatory role.

A draft FTAA is being readied in negotiations of alarming scope. Everyone who doesn't share the neo-liberal gospel has been excluded. Later, after the fact, there will be outreach to more moderate and pliant representatives of civil society. (Although with Bush in the US presidency, people may not be offered even the virtually toothless labour and environmental sidebars in NAFTA, agreements sometimes refered to as social clauses.)

Our own democratic recipe is to keep our militant voices in the streets.