In two weeks, there will be an international convergence in Miami to protest the Free Trade Area of the Americas ministerial. Under the FTAA, the entire Western hemisphere would be a tariff-free zone, analogous to the U.S.- Mexico-Canada free trade zone under NAFTA. If the FTAA is passed in January 2005, as hoped for by powerful governments and corporations in the Western hemisphere, the global economy will continue to drastically polarize.
Resources such as water and electricity that are not yet privatized will be, leading to an increase in prices and a decline in the government's budget. The economies of smaller nations will be drowned in tariff-free imports from the U.S. that are suddenly tariff-free, putting local companies out of business. The U.S. border will be more heavily guarded against human immigration and will be virtually diminished for corporations. Large multinational corporations will have even more authority, expanding to a larger free trade scale, and remain protected under Chapter 11 to sue governments and individuals for their right to privatize land, destruct natural resources and build machines and factories.
Why is it that most Americans do not know what the FTAA is, and what it means for the future of the world economy?
There is a simple reason why so little is known: the talks are held in private, keeping the media and the public away from any information about the status of the agreement. What is known, as affirmed by the U.S. government, is that the FTAA will be a hemispheric expansion of NAFTA. All we are told as American citizens is that it will help our businesses, decrease unemployment and improve both the U.S. economy and the economies of nations in the Southern hemisphere. The jump from NAFTA to the FTAA is eased by CAFTA, the Central American Free Trade Agreement, which is currently under negotiations and is set to be instituted this January. If passed, Central America will become part of the American free trade zone, increasing regional pressures on reluctant South American countries such as Brazil and Argentina to join the FTAA. So how are all these trade agreements solving the world's economic problems?
Let's begin with NAFTA, because after nearly nine years, a thorough analysis has been conducted and its consequences can be juxtaposed to its proposed effects. NAFTA was supposed to break the trade barriers that existed in North America, increase jobs and increase the trade surplus that existed with Mexico. By removing import tariffs on goods traded among the three nations, there would be an increase in commerce, more competition on the international market and a resulting boom in the North American economies. However, free trade is a bit of a misnomer.
In May of last year, Bush stated that , "Fundamental to free trade is competitive fairness. America's support of an aggressive, forward-looking trade agenda requires that government assist industries' interests when they are challenged by unfair trading practices or subsidies. We must insist that our trading partners honor their commitments.... We need tools to secure a level playing field for American businesses." Let's unfold the hypocrisy in this statement by examining the United States' own farm subsidies.
Between 1995 and 2002, 20 percent of the largest U.S.-subsidized farms receive 81 percent of the total 114 billion given out in subsidies, according to the Environmental Working Group. Neither Mexican nor U.S. small farmers can compete, with the numbers of farmers dwindling and the gap between rich and poor farmers growing as a few large farms control agriculture. The level playing field obviously does not exist.
Another neoliberal myth is that the growth of multinational corporations has led to thousands of jobs, especially for workers in Mexico. However, as jobs have minimally increased in Mexico, the number of houses living in poverty level has increased by 80 percent since 1984. Roughly 60 percent of employed Mexicans do not receive the benefits that they are supposedly guaranteed under the law. Millions are working in maquiladoras without health and safety standards, punishments for union organizing and a constant fear of losing one's job. The corporations that own the maquiladoras do not pay taxes on the property either, and the products that are produced are for American businesses to sell and consumers to buy, so no money gets channeled back to the workers' communities.
But give credit where credit is due. Since its signing in 1994 by the U.S., Mexico and Canada, NAFTA has certainly accomplished many feats. For instance, NAFTA has led to the loss of over 500,00 jobs in the U.S., as opposed to the 200,000 jobs that were supposed to be created. And there was certainly a dramatic shift in the trade surplus with Mexico; we have now reached $37.2 billion in our trade deficit with Mexico, a little ways down from the $1.7 billion trade surplus in 1993.
Little is publicized about the private free trade agreements, and even less is covered about the global public's international resistance. In Houston, hundreds came out to stop the CAFTA negotiations, and thousands are expected to converge in Miami in two weeks to stop the implementation of the FTAA.
The global resistance movement stopped the World Trade Organization's talks in September, and plans to stop the FTAA as well. We are not protesting globalization, and are actually very much in favor of it. However, as Bush stated himself, we are challenged by unfair trading practices and subsidies and must work against the corporate ownership of the Americas.
The FTAA is not globalization, it is the privatization of resources and will lead to the further division of wealth throughout the hemisphere. Globalization is a chance for human beings to develop international networks and share resources on an international scale. The free trade agreements such as the FTAA will lead us away from this global prosperity and towards a system where a few key actors will own all resources, eradicating competition and taking the overwhelming majority of the world out of the market.
Emily LaDue is a Trinity sophomore. Her column appears every other Wednesday.
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