UNITED STATES: 'FTAA lite': a setback for Washington

Wednesday, December 3, 2003 - 11:00

BY EVA CHENG

The United States' "free trade" push suffered another setback at the November 17-21 fourth ministerial summit of the Free Trade Area of the Americas (FTAA), held in Miami. Due to opposition, led by Brazil, to aspects of the pact, the bloc's 34 member-countries decided that FTAA signatories would be able to opt out of some elements of the projected agreement, rather than have to accept the package in full as Washington had previously insisted. The summit wound up on November 20, one day ahead of schedule.

The incipient trade bloc includes all countries in the Americas except Cuba. Modelled on the World Trade Organisation (WTO), formal negotiations for the creation of the FTAA began in 1998.

The setback in Miami will undermine US capitalists' ability to use the FTAA as a tool to maintain and deepen their economic domination of the Americas. As in the WTO, the FTAA's projected rules supposedly benefit all members equally, while in reality favouring the countries with the strongest economies. FTAA members still expect to finalise the agreement by December 31, 2004, but it will be a watered-down version (dubbed "FTAA lite").

The US National Association of Manufacturers' vice-president Frank Vargo could barely conceal his disappointment on November 19: "Today's decision [to scale back the FTAA] has avoided having the door slam shut... This is not what we wanted, and we have serious concerns. But the alternative — allowing the talks to collapse because a way could not be found to bridge the gap with Brazil — would have been a disaster for all."

Bilateral agreements

US Trade Representative Robert Zoellick announced on November 19 that Washington would begin negotiations for bilateral free-trade agreements with the Dominican Republic, Panama, Bolivia, Colombia, Ecuador and Peru. These will seek to achieve trade rules which were not agreed to at the FTAA summit. Zoellick remarked that "some countries are willing to move at a faster pace [than Brazil]... For those who are willing to do the most and accomplish the most, then we are willing to move forward".

Had the Miami talks collapsed, it would have mirrored the result of the ministerial summit of the WTO in Cancun, Mexico, in September.

Like the WTO, the FTAA involves far more than a lowering of tariffs and other barriers to imports. It also seeks to remove legal barriers that presently prevent or discourage "foreign investors" (imperialist capital) from taking control of underdeveloped member-countries' economies and public services. The 1993 North America Free Trade Agreement between the US, Canada and Mexico has a similar agenda and has had a devastating impact on workers' interests in all three countries. Anti-FTAA campaigners have described the FTAA a "NAFTA on steroids".

In an October 2002 analysis on his Rebelion web site, Latin America expert and anti-imperialist writer James Petras pointed out: "ALCA [FTAA's acronym in Spanish] establishes a legal and formal institutional basis for the total absorption of Latin American resources, savings, markets, trade and enterprises... ALCA emerges 'full-grown' from the previous neoliberal shell, but it is also an attempt to make the regressive policies and structures 'irreversible'."

Petras noted that US corporations see the "ALCA as a means of restricting European competitor [corporations] from grabbing lucrative Latin American resources and market shares". During the 1990-2002 "golden age of neo-liberalism", Petras points out, US banks and corporations extracted US$1 trillion in profits, interest payments and royalties from Latin America. He added that another $900 billion of "dirty money" (illegally gained funds) was sent to the US from Latin America via imperialist banks. Petras also emphasised that the FTAA complements Washington's extensive military power.

Brazil's role

Brazil's President Luis Inacio "Lula" da Silva in September led 20 other Third World countries in successfully resisting the imperialist powers' agenda at the WTO's Cancun summit. Brazil is also responsible for gutting the FTAA in Miami. Lula appears to be promoting the Mercosur, Brazil's regional trade bloc with Argentina, Uruguay and Paraguay, as an alternative to the FTAA. These moves have raised the hopes that Lula's regime is campaigning for the Third World's interests.

Petras thinks otherwise. In a September 29 analysis in Rebelion, Petras pointed out: "Progressives and non-government organisations who saw Brazil's leadership of 'the 21' at Cancun as part of an anti-globalisation movement are completely mistaken; the Brazilian policymakers, policies and alliances are neither anti-globalisation and even less anti-imperialist.

"The notion that Brazil's promotion of Mercosur is an alternative to the FTAA is also a mistaken notion. Brazilian leaders see it as a means of pressuring the US to secure advantages for local agro-export elites within the FTAA."

However, popular support for the growing anti-FTAA movement in Latin America is real. In the last two years, more than 22 million people in Brazil, Venezuela, Colombia, Ecuador, Argentina and Chile have voted, in one form or another, against the FTAA. In an informal referendum in Brazil last year, 95% of participants — 11 million — opposed the FTAA.

To counter the FTAA, the Cuban government and Venezuela's President Hugo Chavez have called for the setting up of a pro-Third World "ALBA" (Bolivarian Free Trade Area of the Americas).

A Western Hemisphere Workers' Conference Against the FTAA is to be held on December 12-14 in Sao Paulo, Brazil. Visit <http://www.owcinfo.org> for more information.

From Green Left Weekly, December 3, 2003.

Visit the Green Left Weekly home page.

From GLW issue 564