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Free Trade Area of the Americas (FTAA) —
A Bad Idea
Gets Worse

The following article was written by UE National Office Intern Clarissa Gaff as a response to an editorial that ran in a Pittsburgh city newspaper. The newspaper published her response as an op-ed piece on Wednesday, May 2. Gaff is a member of the Mennonite Urban Corps of Pittsburgh, a one-year voluntary service program for recent college graduates. We thought you should have a chance to read this, too.

The Post-Gazette’s editorial, "Back from the Summit" (April 25), was a gushing endorsement of the FTAA as an appropriate and effective means of spreading democracy to the hinterlands of Latin America and the Caribbean. Certainly, it’s less bloody than funding the School of the Americas, backing Augusto Pinochet or aiding the contras. But if the recent Quebec summit’s proceedings are any indication of how the FTAA-styled democracy will operate, the western hemisphere will look like a totalitarian regime after the FTAA is ratified. The summit’s location was surrounded by a two-and-a-half mile wall to keep citizens out, protesters were turned away at the Canadian border, the agreement has not been released to the public, and corporations, not people, purchased access to the summit’s leaders by paying $500,000 to $1.7 million fees. These same corporations sit on an FTAA advisory committee with national leaders, but environmental and labor leaders were given no seats at the negotiating table. Deliberately crafted to lessen the ability of people and their governments to have power over what goes on in their countries, the FTAA won’t foster democracy, but rather corporate power at the expense of millions of working people.

The Post-Gazette touts free trade "as an engine of prosperity." Such a claim evinces the Post-Gazette’s blind faith in the blessings of globalization and its indolence in investigating the actual outcomes of the FTAA’s precursor, NAFTA. NAFTA is a micro-example of the ramifications of ratifying the FTAA and furthering free trade. While undoubtedly a number of people have benefited from free trade, most of these have been owners and investors of transnational corporations who reside in the U.S. and Europe. In contrast, for those laboring in manufacturing and industrial sectors, free trade is an engine of poverty. According to a study by the bipartisan Economic Policy Institute, NAFTA and the ensuing U.S. trade deficit destroyed 440,172 American jobs from 1994 to 1998. U.S. workers in those jobs that remain face the constant threat from their employers that their jobs can easily be exported South, putting downward pressure wages and benefits for the most of the decade.

Workers in Mexico haven’t fared any better under the NAFTA. Although 1.3 million Mexicans are employed in maquiladoras, up from half a million in 1994, the number of Mexicans living in poverty escalated to 51% in 1997. Mexican workers saw their wages fall 40 percent. Equally disheartening, their jobs are now exported South as transnational corporations look for cheaper labor, bigger profits, and new markets to exploit. Free trade is a free-for-all for corporations. Nicaragua, El Salvador and Honduras boast lower wages and governments eager to attract investment. These governments, who fear the mobility of investment fostered by free trade, refuse to raise minimum wage or enforce labor laws. It is difficult to believe that the FTAA will reform these governments; indeed, the FTAA’s laissez faire, "hands off" trade approach is likely to exacerbate these conditions as corporations zip in and out of countries with unencumbered alacrity, looking for the next great deal, in Haiti, in Bolivia, in Guatemala.

'NAFTA ON STEROIDS'

But the FTAA won’t affect just manufacturing workers in the 34 participating countries. It’s called "NAFTA on steroids" because it expands the free trade model to new sectors. One of the most salient parts of NAFTA, Chapter 11, which will be expanded under the FTAA, allows private interests of NAFTA countries, such as corporations, to challenge any NAFTA governments’ policies, laws, or practices if they infringe on the rights of a corporation. Chapter 11 gives corporations the right to sue governments for compensation for lost current or future profits, regardless of the reason, like health concerns, for restraining trade. This has already come into play. Canadian-based Methanex Corporation has filed suit against the U.S., claiming that California’s decision to phase out the use of Methanex’s carcinogenic gas additive will cost them $970 million in future profits. While the case hasn’t been decided, precedent from similar cases suggests that Methanex will walk away with a [large sum of taxpayers'] money unless Californians acquiesce and begin using Methanex.

Additionally, under the FTAA, public services at all levels of government in all 34 participating countries would have to be opened up for competition from profit-hungry, private service corporations. Governments would not be allowed to preferentially fund domestic services providers in services ranging from health care to education to water authorities. Do we really want Pittsburgh schools run by a for-profit Brazilian corporation concerned about the bottom line? Or PNC Park operated by Chilean investors?

Anti-globalization protesters in turtle suits and gas masks may seem easy to dismiss. But then again, Cassandra was dismissed by the Trojans, who turned a deaf ear to her prophecies regarding a wooden horse. Pay attention lest we open our doors to the Achaens. Anti-globalization protesters aren’t protectionists, nor anachronistic Miniver Cheevys longing for yesterday, and most of them aren’t even anti-globalization (hence the rallying cry, "Fair trade, not free trade!"). However, most protesters would like to see globalization tempered by environmental and labor standards, by a regard for people, not only corporations. Without labor or environmental standards, the FTAA will not "benefit everyone," as the Post-Gazette proposes. The Post-Gazette must stop parroting the same tired economic orthodoxy, the same tired slogans, and look at the evidence provided by NAFTA, a startling example of how unbridled free trade has crippled millions of people.