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A Secret Trade Pact Even Worse Than NAFTA

by Randolph T. Holhut

of FTAA coverage
(AR) -- If you thought the North American Free Trade Agreement (NAFTA) was a disaster, its sequel -- the Free Trade Agreement of the Americas (FTAA) -- promises to be even worse.

FTAA, which will discussed at the Summit of the Americas in Quebec City on April 20-22, will expand NAFTA to the entire Western Hemisphere (except Cuba). If you've haven't heard about FTAA yet, you're not alone. Almost all the details of the treaty have been secret, even though trade ministers have been working on it since 1999. From what little is known about FTAA, it appears that it magnifies the worst pro-corporate, anti-democratic elements of every trade deal of the past decade.

Like NAFTA, FTAA is not so much about free trade as it is about giving multinational corporations more power than the governments that are supposed to be regulating them. It would allow companies to sue a member country if its laws constitute an "unfair barrier to trade." In other words, what few environmental and labor laws that are still left could be swept away if a corporation decided it interfered with its divine right to make as much money as possible.

FTAA also goes beyond NAFTA in opening up trade and investment in health care, education and other services provided by the public sector. It would make privatization of the public sector a priority for member nations, prohibit regulation of speculative capital and sharply limit health and safety regulations.

For American workers, FTAA means even more jobs will be exported to low-wage countries. While the agreement will give Latin American countries greater access to the U.S. market and greater multinational investment, it will come under the caveat of greater dominance of corporations over the hemisphere's economies and governments.

If you would care to journey to Quebec City to register your displeasure with FTAA, good luck to you. The center of the old city has completely surrounded with Jersey barriers and a 10 foot high chain link fence that stretches nearly six miles in length. There will be more than 6,000 police and other security personnel to prevent any protest from interfering with the summit.

Since the "Battle of Seattle" in 1999, governments have cracked down hard on anti-globalization protests. This explains why the next gathering of the World Trade Organization (WTO) will take place this fall in Qatar, a tiny Persian Gulf nation where all public demonstrations are outlawed.

The backlash against the anti-corporate globalization forces is one sign of how effective they've been. While they have far to go before their demands for labor rights, environmental protection, increased citizen control over corporations and saner economic development models for the global economy are included in future global trade agreements, the folks who write the agreements are concerned enough to start making some concessions to defuse the growing opposition to global economic agreements that put corporate needs ahead of citizens. Of course, the concessions will likely be as weak as possible and will likely come without binding obligations or tough enforcement.

While the U.S. negotiators will likely push for the most favorable deal for its corporations, other countries such as Canada and Brazil are looking for a treaty that will not give the U.S. so much power. But whether the U.S. gets its way is not as important as whether our government realizes the economic bind it's getting itself into with full-bore globalization.

The U.S. trade deficit is growing rapidly -- it's now at a record 3.7 percent of our Gross Domestic Product. We are by far the world's largest debtor nation. At the same time, manufacturing jobs are rapidly disappearing. During the so-called economic boom of the last three years, the U.S. lost more than 400,000 manufacturing jobs.

Additionally, the global economic prosperity of the last few years has been based on U.S. consumers, because the workers in China, Mexico and other low-wage nations can't afford to buy the goods they make. In Mexico, for instance, most manufacturing workers still earn about a $1 an hour and live in appalling poverty.

Agreements such as NAFTA and organizations such as the WTO were created in a relatively prosperous economic climate. Now that the stock market bubble has burst and consumer debt is at record levels, the U.S. can't continue to sop up the world's production. What happens then? One thing is certain: the workers will suffer most.

Given the disaster NAFTA has been for North American workers, the last thing we need is an expanded version that gives even more power to corporations and undermines democracy in the name of ever-greater profits. It's time we reined in corporate power and got back control of our economic and democratic institutions. The alternative is a world where corporations, not governments, completely rule our lives.

Randolph T. Holhut has been a journalist in New England for more than 20 years and edited "The George Seldes Reader"

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Albion Monitor April 19, 2001 (

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