Challenging Trade Liberalization in the Americas

Photo courtesy of brasil.indymedia.org Protesters in Rio de Janeiro, Brazil mobilized in global action day against the WTO before its 2001 meeting in Doha, Qatar.

Two-Headed Monster is Born
Key Issues in WTO and FTAA
Envisioning a Monster-Free World: The Global Justice Movement's Alternative Agenda
Specific Themes
Slaying the Two-Headed Monster: Protest and Mobilization
Citizen Action
The Battle Continues
Resources

Time is critical as proponents of corporate globalization step up their efforts in governmental trade talks. So the opposition is increasing grassroots efforts to mobilize and educate people, critique the official model, develop an alternative agenda, and break through the undemocratic barriers to closed negotiations.

This autumn, the “two-headed monster” of the World Trade Organization and the Free Trade Agreement of the Americas will set foot on the shores of North America. The Fifth Ministerial Meeting of the WTO is scheduled for Sept. 10 to 14, in Cancún, Mexico, and the Eighth Ministerial Meeting of the FTAA is set for Nov. 20 to 21, in Miami.

These meetings represent crucial turning points in the battle over the future of globalization and economic integration. At issue are competing visions of the economic landscape. One vision, spearheaded by developed countries and their corporate allies, is of a global trade regime favoring and protecting the interests and investments of large transnational corporations. The opposing viewpoint, though not united, generally sees trade and economic integration as a tool for development, one that should be subject to social and environmental concerns and domestic development goals. Negotiations for both are scheduled to conclude by the end of 2004, with ratification in 2005.

Two-Headed Monster is Born

The WTO was born in 1995 as a transmutation of the General Agreement on Tariffs and Trade (GATT) established in the 1940s. Unlike the GATT, the WTO has teeth. Not only is it a legal agreement on trade practices, but also the WTO is an international body with dispute settlement and enforcement capabilities. Member countries suffer clear and sharp consequences for violating WTO provisions, enacting or maintaining trade practices deemed by that body to be unfair or restrictive.

The WTO became a major focus of the opposition at its 1999 Ministerial Meeting in Seattle. There, delegates failed to reach agreements on a new round, due in large part to massive protests. Since Seattle, the WTO has joined the Group of Eight as a symbol of global domination by a political and commercial elite. Its official and informal meetings have been placed squarely on the agenda of international protest at Doha, Qatar, and Genoa, Italy, in 2001; Quito, Ecuador in 2002; and at Evian, France, Sacramento, U.S., and Montreal, Canada in 2003.

Formally the WTO is democratic, since each member country has one vote, but in reality much work is done through consensus building in small, selective meetings. Additionally, large, developed nations are able to put their weight behind threats or sanctions, weakening the negotiating position of small or developing countries. Deals are brokered and strategies aligned. In addition to official trade representatives, the private sector is well-represented, with over 500 corporations and business representatives having "trade adviser" security clearance. In all processes, there is no formal structure for participation by the rest of civil society and nongovernmental organizations--leaving out citizens directly affected by WTO policies.

Former U.S. President Bill Clinton announced plans for the hemispheric FTAA shortly after the North American Free Trade Agreement (NAFTA) came into effect in 1994. Progress soon halted with the Mexican peso crisis and related economic crisis in many Latin American countries in the mid-1990s, but resumed again with the 1998 Second Summit of the Americas in Santiago, Chile. Currently nine negotiating committees are working on the themes of agriculture, services, market access, investment, intellectual property rights, government procurement, competition, subsidies, anti-dumping and countervailing duties, and dispute settlement. The proposed FTAA would establish the world's largest regional trading bloc, encompassing all countries in the Americas, except Cuba, and creating a market of 800 million people with a combined gross national product of $11 trillion.

The proposed FTAA builds on existing WTO agreements and is modeled after the NAFTA, but reaches new sectors and would restrict regulation at all levels of government. Further, all sectors or goods are covered unless expressly excluded at the time of negotiation--severely limiting future policy flexibility. Current negotiations are effectively closed to the bulk of civil society, though members of the business community enjoy liberal access to the process.

Governments have been resistant to publicizing their positions and the released draft text is mostly bracketed, signifying lack of consensus on many proposals, while failing to note which countries support the proposal.

Key Issues in WTO and FTAA

As they stand now, the WTO and FTAA both seek further liberalization and extension of corporate and investment rights at the expense of national sovereignty and sustainable development focused on human development rather than profit-maximization. Critics charge that both agreements will serve to further the interests of existing wealthy corporations and developed countries, subjugating developing countries to further poverty and dependence. The following is a breakdown of the dominant WTO and FTAA positions on central themes:

Agriculture

WTO: At issue are heavy U.S. and EU subsidization of export crops and dumping1,--and developing countries' efforts to insulate so-called "security crops" from market fluctuations and to protect rural development and food sovereignty.
FTAA: Negotiations are based on WTO rules but fail to recognize and protect land reform processes for equalizing property distribution. Rules for precautionary measures on such things as genetically modified foods are not included. Government promotion of national food security, agricultural support to small farmers, or regulatory programs could be considered unfair trade practices.

Services

WTO: Developed countries will likely push for privatization of or foreign access to all service sectors: education, health care, water, energy, social security, transportation, publishing, etc. In many developing countries these sectors are publicly owned and run.
FTAA: Opens all service sectors, including public services, to foreign corporations. Foreign companies would be treated the same as (or better than) local corporations under "most favored nations" and "national treatment" clauses. Public services could not be exempted if provided, even in part, commercially or in competition with private providers. All services would be covered unless expressly excluded.

Investment

WTO: New rules are being sought to curtail national governments' ability to set conditions on foreign direct investment.
FTAA: Like the WTO, the agreement would limit governments' power to regulate foreign investment and ban official performance requirements on business. It would allow for investor-state lawsuits.

Trade Related Intellectual Property (TRIPs)

WTO: Talks on this theme center on U.S. promotion of pharmaceutical industry demands to strictly limit the number and kinds of diseases qualifying as public health crises eligible for generic drug production or importation. Patent owners receive 20-year monopolies.
FTAA: Based on the WTO TRIPs trend, current FTAA proposals would further limit the situations in which governments could authorize the production, importation, or exportation of cheaper generic medicines. Indigenous traditional knowledge about medicinal uses and protection of biodiversity; communal heritage, including artisan craft designs and geographic designations; as well as life-forms would be open to patenting by individuals or corporations with sufficient resources.

Government Procurement

WTO: Rules would prevent use of most noncommercial criteria in procurement decisions and prohibit social criteria for contracts; so there would be no favoring domestic companies, requiring a living wage, establishing local content, or sustaining community investment requirements.
FTAA: Like the WTO rules, the agreement would prohibit the use of noncommercial criteria in procurement decisions. It would open all sectors to coverage by the FTAA, unless explicitly excluded during the negotiations.

Competition Policy

WTO: The policy would end the right of governments to protect domestic monopolies, thereby opening locally controlled industries up to competition with transnational corporations.
FTAA: Talks currently focus more on state monopolies rather than private monopolies. (Monopolies resulting from a patent are expressly permitted.) The terms would likely foster competition among the largest firms at the expense of small and medium enterprises. The state would guarantee a completely deregulated market.

Dispute Settlement

WTO: Currently settlements are state-to-state, resolved by a WTO arbitration panel of trade experts, and closed to civil society. Losing countries must either change their policy to conform to WTO rules, pay cash compensation, or face ongoing, escalating trade sanctions.
FTAA: Included would be the WTO state-to-state mechanisms, plus NAFTA investor-state provisions in which private corporations can directly sue foreign governments before an arbitration panel for so-called "physical takings" and "regulatory takings" of their investments or future profits. Both mechanisms are non-transparent and closed to civil society.

Envisioning a Monster-Free World:
The Global Justice Movement's Alternative Agenda

Citizen groups across the hemisphere view this corporate-profit driven model of globalization and integration as a threat to democracy, sustainable development, and national sovereignty. Through a wide range of organizations and actions that reflect the diversity of the movement, they are stepping up mobilization against the current negotiations and working to develop and promulgate an alternative vision.

The central motivation of those opposed to the corporate brand of globalization is a fundamentally different vision of how economic integration in the Americas should be constructed. The movement, however, is made up of a diverse assortment of individuals and groups, each with a significant stake to lose if the current dominant model succeeds within the WTO and FTAA. Some call for scrapping the agreements altogether and others call for drastic revisions. Environmental groups, organized labor, small farmers, indigenous communities, students, progressives, and women are primary players within the movements against the WTO and FTAA. Many groups in small and developing countries view the current trend toward corporate globalization as a second colonization of their lands and peoples, subjugating them to the needs of northern businesses and transnationals. Other motivations include protecting gains in labor and civil rights and advances in environmental protection. Though each group differs in its principal reason for opposing the WTO or FTAA, they all are beginning to join forces in unprecedented ways to mount a powerful challenge to corporate globalization. Despite this diversity, most groups share a common set of concerns.

Specific Themes

Agriculture and Food Security: Current agricultural subsidies in developed countries have mainly benefited large landowners and transnational agribusiness, focusing on export commodities, and thus contributing to lower producer prices and displacement of small farmers in developing countries. Agriculture should be removed from trade agreements, according to some opponents. Others demand special and different treatment for developing countries. Most argue that subsidies are a tool in developing countries for encouraging rural production, supporting small and medium producers, sustaining national food security, and reducing general inequality but that export subsidies promote predatory market practices like dumping and should be eliminated.

Services: Services include many vital, daily needs and society must assure access to all its members. Commercial motives of profit maximization do not insure access or quality of services, particularly to the poor, or isolated, rural populations. Nor does it assure long-term provision for environmental objectives.

Investment: Government ability to protect and regulate the environment, labor standards, and human and indigenous rights should take precedence over corporate and investor rights to profit maximization. Governments should have recourse to hold investors responsible for their business practices.

TRIPs: Life forms should not be subject to patenting. Discovery and genetic engineering do not constitute invention for the purpose of patenting. Monopoly patents should be lifted in cases of public health and countered with access to generic production, parallel imports, compulsory licensing, and provisions for public use.

Government Procurement: The use of non-commercial criteria in awarding government contracts and the favoring of domestic suppliers should be allowed to promote domestic development and competitiveness of domestic industries.

Competition Policy: Public monopolies of vital services or natural resources should not be subject to anti-monopoly regulation.

Dispute Settlement: Dispute settlement should not be limited to nations and investors. Rather, an open, transparent tribunal process that allows all interested stakeholders, including civil society, to have standing should be established. Nations and affected parties should have effective means for redress from nations or corporations violating social or environmental standards. Procedures should be fair and transparent.

Environment: Current WTO and FTAA proposals would push developing countries to export cash crops and natural resources, which is often devastating to the environment. The right to enact legitimate environmental regulation should be protected. Environmentally friendly practices should be promoted.

Labor: Agreements should respect basic worker rights as defined by the International Labor Organization: the right to organize, the right to strike, the right to safe working conditions, the right to a non-discriminatory work environment, the right to paid overtime. Effective measures for application and enforcement should be included.

Gender: An assessment should be made of the different effects of proposed trade agreements on men and women, taking into account current discrimination against and poverty of women. Measures to reverse discrimination should be adopted and rules that exacerbate gender inequity should be rejected.

Special and Different Treatment: Trade liberalization in any sector should not be an end in itself but a tool for addressing human needs. Due to current asymmetries, small and developing countries should receive special and different treatment. Among alternatives are exclusion for these countries from some terms or sectors, extended compliance deadlines, and flexibility to limit market access or impose rules on investment or procurement that link trade to a national development plan for stimulating local industry.

Slaying the Two-Headed Monster: Protest and Mobilization

The movement against corporate globalization is unique in at least four ways. First, the movement is a truly international social movement, motivated by the pervasiveness of neoliberal economics and corporate globalization. Second, despite still-limited internet access in developing countries, the use of email, list-servs, and websites has transformed the organizing, information sharing, and networking opportunities available to the activist community. Third, the influence of anarchist principles and a rejection of traditional power hierarchies and apparatus have created new forms of decentralized organizing. And fourth, international organizing by sector and across sectors is more profound than ever before. Labor, environment, indigenous, peasant, progressive, small-producer, women, student, and religious groups are all growing in their opposition to the model of corporate globalization being negotiated within the WTO and FTAA and making links with counterparts in other parts of the world. Likewise, recent joint actions between sectors, such as between labor and environmentalists or clergy and indigenous peoples, indicate mounting cooperation in opposing neoliberal globalization.

The many strategies being used in the campaigns against the WTO and FTAA can be broken down into seven categories: grassroots educating and mobilizing; national, regional, and sector networks; citizen referendums; international networks; demonstrations and forums; analysis and lobbying, and alternative economics.

Citizen Action

Grassroots educating and mobilizing

Most people do not get involved until events hit home. As such, it is crucial for grassroots organizations to be accessible to displaced or concerned citizens, in order to make use of any opportunity to illustrate the consequences and interconnections of corporate globalization. Many groups sprang up throughout the hemisphere to oppose the U.S. invasion of Iraq and some groups, like the Maryland-based Towson Anti-War Coalition, have used this initial impetus to begin exploring the connections between militarization and corporate globalization. The Sindicato Mexicano de Electricistas (Mexican Electrical Workers Union) began working on the issue of the WTO and FTAA in 2001 when union dues began to decline. Now it is actively educating members and pushing for an official seat at the negotiating table. Similarly, Grupo Tacuba, an indigenous organization in Oaxaca, Mexico, has only recently expanded its educational efforts beyond the immediate effects of Plan Puebla-Panama, a regional precursor to the FTAA. In addition to traditional small meetings and word-of-mouth promotion, groups are using formal training kits as an introduction to the WTO and FTAA, as well as holding teach-ins featuring speakers, videos, and group activities. The Caribbean Policy and Development Center produces and distributes informational calendars featuring the effects of free trade regimes in the Caribbean region and hosted an educational meeting specifically for regional journalists. Street theater, encampments, long marches, and rallies have been used to gain media attention and raise public awareness.

National, Regional, and Sector Networks

Each country in the region has an active citizen movement against the FTAA and WTO. However, the level of national and sector networking varies. Sector and hemispheric networks have emerged, often characterized as a loose network of autonomous organizations coming together to strengthen numbers, share information, and provide a minimal level of coordination. Many countries throughout the hemisphere have held national meetings on the FTAA. Fewer have been held for the WTO, although groups are increasingly recognizing the two as interlinked. The Assembly of Caribbean Peoples formed after years of tentative networking, hosting its third regional assembly in August with delegates from groups throughout the Caribbean region. Regional assemblies have also served as a powerful tool for strengthening resistance efforts and articulating positions against the WTO and FTAA for indigenous, peasant, and women's movements. Movements in Central America have galvanized around the proposed Central American Free Trade Agreement (CAFTA), a more immediate threat than the FTAA or WTO. The Southern Cone has been strengthened by the elections of President Luiz Inacio Lula da Silva in Brazil and President Nestor Kirchner in Argentina, and is now placing more emphasis on regional integration while questioning aspects of the proposed FTAA. Civil society has influenced the Venezuelan government to call for greater transparency and an extension to the negotiating round.

Citizen Referendums

Since official channels in the FTAA negotiations have not given a voice to civil society, citizen groups have organized national referendums and consultations. In October 2001, nearly 10 million Brazilians held a national consulta on Brazil's acceptance of the FTAA, and 98% voted against joining. Consultas were launched in many Mexican states in 2002, and although turnout was less than expected, the effort is slated to continue. Consultas were scheduled in Uruguay, Aug. 25; Argentina, Oct. 4 to 11; and Ecuador, Oct. 12. In the United States, the AFL-CIO, in collaboration with many progressive organizations, has coordinated a national internet referendum on the FTAA, with ballots to be presented at the FTAA Ministerial in Miami.

International Networks

International opposition to corporate globalization has been greatly strengthened by the annual World Social Forums, which provide an open space for free-thinking organizations and individuals from around the world to come together to discuss and network around issues confronting the developing world, such as globalization, patriarchy, and militarism, in order to foster capacity-building and mobilization of local movements. Via Campesina is an international network of peasant organizations. The Third World Network focuses on news and analysis from a developing world perspective. Within the Americas, hemispheric networks including Our World Is Not For Sale, the Hemispheric Social Alliance, NoALCA, Stop the FTAA, and Grito dos Excluídos have been instrumental in educating, mobilizing, and building the movement.

Demonstrations and Forums

Since the WTO Ministerial Meeting in Seattle, public protest has followed the WTO around the globe, and it promises to be the same for the FTAA. As in the past, civil society has planned major demonstrations and alternative forums at both meetings. Tactics range from nonviolent marches, rallies, and acts of civil disobedience to more confrontational methods for disrupting the official negotiations. Slated forums feature discussions, symposiums, workshops, exhibitions, and cultural events to critique the current official proposals and articulate and exhibit an alternative vision. Additionally, scheduled solidarity protests in cities across the globe coincide with the meeting. Since April, there have been at least 30 national and international meetings within the hemisphere that have discussed the WTO and FTAA proposals and their potential effects within the hemisphere. If local meetings were included, the number would be in the hundreds.

Analysis and Lobbying

Numerous organizations, independently or in collaboration with other groups or foundations, have critiqued current proposals before the WTO and FTAA, using the experiences under NAFTA and structural adjustment policies as a guidepost. The Alternatives for the Americas (produced by the Hemispheric Social Alliance) was an early and since-updated critique of the proposed FTAA and articulation of an alternative agenda. Recently major reports have been released by The Council of Canadians, Making the Links: A People's Guide to the World Trade Organization and the Free Trade Agreement of the Americas, and the UN Development Program, Making Global Trade Work for People. Nongovernmental organizations, academics, journalists, and sector organizations contribute to the growing body of progressive analysis of the global trade regime and have planned the presentation of position papers at the official WTO and FTAA ministerial meetings. Often the groups involved in analysis are not the same ones involved in grassroots mobilizing. A major step forward could be taken with increased collaboration and communication between grassroots organizations and those analyzing trade policy.

Alternative Economics: Fair Trade, Not Free Trade

Sustainable development is central to the alternative agenda and the critique of the current corporate globalization model. One of the most important forms of protest has been the creation and promotion of Fair and Sustainable Trade. The rapid growth of fairly traded and developed goods is based on building a direct relationship between producer and consumer, as well as expanding specialty markets that offer price premiums based on quality and social, environmental, and health concerns. Much work has been done in the Americas around fairly traded coffee and artisan crafts, with groups such as Global Exchange, Comercio Justo, Equiterre, and Ten Thousand Villages bridging the gap between producers and consumers, promising a viable livelihood to producers throughout the region. In addition to offering goods online and in traditional stores, new projects reach into communities, such as Equal Exchange's Just Java partnership with thousands of churches across the United States and Canada committed to serving and promoting fair trade coffee at church functions. Additionally, a sustainable trade fair and symposium was scheduled for the Cancún meeting of the WTO, bringing the alternative economy directly to the trade ministers.

The Battle Continues

Citizens in each country must wage the battle against the WTO and FTAA within their own backyards, lobbying their respective governments and educating their neighbors. Increasingly however, the battle is crossing national and sector lines and becoming a larger struggle directly against the model of corporate globalization represented by the WTO and FTAA, where profits come before people. Within the movement, local organizations feed the international networks, and vice versa, strengthening the movement on all levels.

For the individuals working against corporate globalization, the struggle is not against a force or a system with a life of its own. Ultimately, the system, structures, and rules are the product of human decisions. As such, people have the power to change them. The task is not easy since the current system favors a small group of people who have a vested interest in (at a minimum) maintaining the status quo. However, it is not an impossible feat. As the growing movement against corporate globalization bears witness, when people are educated and united, they become a force that must be reckoned with. Given the current momentum in the anti-WTO and FTAA movements, the two-headed monster will face a stronger opponent in Cancún and Miami.

--Kristin Sampson

Endnotes

1. Dumping refers to the practice of selling on the world market below the cost of production, usually made possible through government subsidies.
2. For information on recent developments in WTO pharmaceutical negotiations, see Jeffrey Sparshott. “WTO nears pact on generic pharmaceuticals.” August 28, 2003. Available at http://washingtontimes.com/business/20030827-092210-7087r.htm.
3. For more information on the Towson Anti-War Coalition, see http://www.towsonantiwar.org/.
4. For more information on the Mexican Electrical Workers Union, see http://www.sme.org.mx/.
5. For more information on the Plan Puebla-Panama, see the following America’s Program articles by Wendy Call, “Plan Puebla-Panama: Done Deal or Emerging Flashpoint?”, available at http://www.americaspolicy.org/articles/2002/0204puebla.html, and “Resisting the Plan Puebla-Panama,” available at http://www.americaspolicy.org/citizen-action/series/02-ppp.html.
6. For more information on educational training kits, visit the United for a Fair Economy website at http://www.ufenet.org/econ/index.html.
7. First held in Porto Alegre, Brazil in 2001, and again in 2002 and 2003, the WSF will now be hosted by India in 2004.
8. Author’s calculation.
9. “Alternatives for the Americas: Draft Four,” Hemispheric Social Alliance. 2002, available at http://www.asc-hsa.org/pdf/Alternativas%20ene%202003%20english.pdf.
10. “Making the Links: A Peoples’ Guide to the World Trade Organization and the Free Trade Area of the Americas,” Maude Barlow and Tony Clark, The Council of Canadians, 2003, available at http://www.canadians.org/documents/making_the_links_int.pdf.
11. “Making Global Trade Work for People,” United Nations Development Programme, 2003, available at http://www.boell.org/docs/UNDPTradeBook2003NEW.pdf.

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