Q. Is It Free Trade Or Fair Trade ?
The story of the Free Trade Area of the Americas began -- and may well end -- in Miami. At the Summit of the Americas held here in December 1994, the heads of every nation in the hemisphere (except Fidel Castro, who was not invited) agreed to tear down trade barriers to create the largest open market in the world. Stretching from the North Pole to the Tierra del Fuego, the FTAA would include 34 nations, 800 million people, and a combined annual gross domestic product of $11 trillion. The heads of state had lofty goals when they conceived of the FTAA. In a declaration issued at the end of the summit, the leaders pledged that unfettered trade would "strengthen the community of democracies of the Americas, promote prosperity, eradicate poverty and discrimination in our hemisphere, and conserve our natural environment for future generations."
Nine years later the FTAA idea returns to Miami for the final phase of negotiations as the hemisphere's trade ministers (again excluding Cuba) gather at downtown's Inter-Continental Hotel on November 20 and 21. If successful, the negotiations will wrap up next year in Brazil and put the FTAA into effect by the end of 2005. Local boosters hope that if the pact is created, Miami will become the home to the trade-area headquarters -- known as the permanent secretariat -- making the city indisputably the capital of the Americas. But before that can happen there are a lot of obstacles in the way of the FTAA. This week the trade ministers will face massive protests out on the streets and fierce disagreements among member nations inside the official meetings.
As hundreds of negotiators have hammered out the details in a draft agreement over the past decade, a large, vocal, and wildly diverse movement has organized in opposition to almost every provision. The largest opponent of the FTAA is the Hemispheric Social Alliance, an umbrella group of trade unions and social organizations formed during the 1997 ministerial meeting in Belo Horizonte, Brazil, that now claims to represent more than 45 million people. During the Third Summit of the Americas in Quebec City, Canada, in April 2001 -- as heads of state adopted the second draft agreement of the FTAA and tens of thousands of protesters raged outside -- the HSA hosted a parallel People's Summit at a nearby site, where 3000 delegates from across the hemisphere prepared their own agreement, Alternatives for the Americas. "This is a movement of people demanding their very humanity," the document declares. "They do so by stating that nutritious food, a comfortable place to live, a clean and healthy environment, health care, and education are human rights."
Why all the fuss? Because despite repeated assurances by ministers and heads of state that the FTAA will protect workers, promote general prosperity, and preserve the environment, there are no such safeguards written into either of the first two draft documents of the trade agreement. Instead, critics complain, the FTAA offers protection for the "rights" of investors and of transnational corporations to unimpeded access to all national markets.
Without those safeguards, the FTAA draft looks pretty familiar to detractors. The document codifies economic policies that for the past 25 years have been promoted across Latin America by the International Monetary Fund and the World Bank. The message to struggling governments has been clear: If you want a loan, you'd better cut back on the size of your government, loosen controls over your currency, and open up your markets to outside investors -- even when that means painful sacrifices for the average person. Those economic policies have had drastic political implications, as angry citizens have taken to the streets to oust presidents promoting open trade in Ecuador, Argentina, and most recently Bolivia.
The FTAA draft also looks a lot like the agreements it was modeled after: the World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA). In fact critics call the FTAA "NAFTA on steroids" -- and point to what they consider to be the failings of both the WTO and NAFTA as a way of predicting the likely outcome of the FTAA for workers, the poor, and the environment (see "NAFTA: Saint or Sinner?" page 32). Meanwhile the most recent meeting to finalize various details of the WTO agreement in Cancun, Mexico, this past September collapsed amid a standoff between developed and developing countries over the issues of competition and agriculture, led in part by Brazil.
Although Rubens Barbosa, Brazil's ambassador to the United States, claims that his country's role in the WTO collapse has been exaggerated, and that Brazil is committed to making the FTAA work, the populist administration of Luiz Inácio Lula da Silva presents a formidable challenge to putting the FTAA into practice. Many in Latin America believe the current draft favors the United States, which has helped Brazil entice new member countries to join Mercosur -- the regional trade area that also includes Argentina, Paraguay, Uruguay, and now Peru -- in an effort to form a powerful bloc to challenge the United States.
The same thorny issues of competition and agriculture that helped bring the WTO to a grinding halt in Cancun threaten to derail the FTAA. And those are just two of the nine issues on the FTAA negotiating table (see "Fair Trade Hot Buttons," page 30). No matter what happens on the streets, it's the controversy inside the negotiations that will determine the shape of the final FTAA document. In fact there may be no FTAA at all, dashing local dreams of a Miami secretariat. $
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