An alternate vision: new trade and investment policies

We hear the arguments over and over again for the expansion of free trade. They say that it creates jobs, lowers prices, and benefits all countries involved. It is supposed to promote democracy and respect for human rights throughout the world. We are made to believe that NAFTA has been a success and that fears of it eroding labor and environmental standards were unfounded. So if NAFTA has done so much good, then why is there so much opposition to the Free Trade Area of the Americas (FTAA), the proposal to expand it to include all of North, Central, and South America?

It would be difficult to make a case for expanding NAFTA if that agreement has not been beneficial, and many people would argue that NAFTA has been a failed experiment. As discussed in a report by Public Citizen's Tradewatch, available at http://www.tradewatch.org/nafta/reports/5years.htm, hundreds of thousands of high-paying U.S. manufacturing jobs have, in fact, gone to Mexico, causing laid-off workers to take lower-paying service jobs. This has created a situation in which unemployment is lower, but there are fewer jobs that allow people to make a living. The numbers of working poor, people who are employed but still cannot make ends meet, are growing. As many as one sixth of American families now fall into this category. According to the National Survey of America's Families, a family is considered poor if their income falls below twice the federal poverty line and as working if the average annual hours worked by all adult family members exceeds 1,000. The annual earnings of a full-time, full-year worker making $6 an hour, well above the federal minimum wage of $5.15 per hour, are too low to lift a family of three above the federal poverty line.

U.S. manufacturing workers have also had their bargaining power decreased as it became more practical for factories to relocate. According to a study undertaken under NAFTA's labor side agreement, the percentage of U.S. companies following through on threats to relocate as a result of organizing drives has tripled since NAFTA was passed. It is also doubtful that many Mexican workers are benefiting significantly from NAFTA. Economic inequality has increased, and most exporting has been done by multinationals with branches in Mexico rather than Mexican companies.

Another issue of concern with NAFTA is the provision in chapter 11 that allows corporations to sue governments for compensation when they feel that regulations are costing them profits. Ethyl Corp. used this provision to sue the Canadian government for compensation after the government banned MMT, a gasoline additive known to cause nerve damage. Fearing that it would lose the case, the Canadian government agreed to roll back its ban on MMT and pay $13 million in compensation to Ethyl Corp. UPS is currently suing the Canadian Postal Service under the same provision, alleging that, being a Crown Corporation, the Canadian Postal Service has an unfair competitive advantage. The proposed Multilateral Agreement on Investment (MAI), which was killed in 1998 as a result of civil opposition, contained similar language that would establish investor rights to bring lawsuits against governments. It is likely that the FTAA will contain similar language. Democratically elected governments are being overruled by market driven corporations.

Negotiations for a Free Trade Area of the Americas have been going on in secret for several years. Although a draft now exists, it is not available to the general public or to Congress. Canada has recently made its negotiating positions public, but it is the only country to have done so; the United States has made summaries of its positions available but not the actual positions. About 500 business representatives have a security clearance to access the draft, however. It is thus possible that many of our concerns are unfounded. The FTAA may contain no new provisions for investor-to-state lawsuits, and it might not affect Brazil's program to provide generic drugs to AIDS patients. At this point, however, there is no way to be certain without there being more transparency in the negotiation process.

In conclusion, negotiations are taking place in secret to expand a trade agreement that, at best, has dubious benefits to most of the people affected by it. Over the next few weeks, from Buenos Aires to Quebec City, the trade ministers will be met by activists who want a say in the terms of the trade agreements that affect them, rather than trade agreements negotiated in secret that give the power to set environmental and safety standards to unelected tribune members. As the Zapatistas of Chiapas took up arms against the Mexican government the day that NAFTA went into effect, the Mohawk Nation (which is split between the U.S. and Canada) is prepared to allow protesters to cross into Canada for the Quebec summit. People everywhere are resisting and working

to build alternatives that would work for all of society rather than just a few people. Alternatives for the Americas, http://www.web.net/comfront/alts4americas/eng/eng.html, could be an example of an alternative to the FTAA that would encourage global trade while promoting human rights and allowing countries to set their own standards.