A comprehensive review of the FTAA's history and mechanisms, including a compact history of NAFTA and CBI. Hopefully this "wide-angle" analysis will prove useful.

NAFTA, CBI, and FTAA

[Taken From "Global Economics 102: Five More Things Everyone Should Know about International Finance and 'Free Trade'" -- Section One]

by Eric S. Piotrowski

On 1 January 1994, the North American Free Trade Agreement [NAFTA] went into effect. During the pre-ratification debate, it was clear that NAFTA would encourage businesses in the United States to move to Mexico, where environmental standards are relaxed and union-busted workers have no choice but to settle for poverty wages. Because of overwhelming opposition from labor and environmental groups, NAFTA seemed destined for defeat in Congress. But at the last minute, President Clinton made a series of pork-spending deals (including cigarette tax breaks in North Carolina, military cargo plane contracts for Texas, and a license to use the carcinogenic pesticide methyl bromide on farms in Florida), and got the necessary votes in the House of Representatives. George Will said of the event: "votes are for sale and the President is buying" (Dawkins 67).

Three years after NAFTA, the fears of its opponents had been confirmed: companies moved south; the US-Mexico border saw an explosion in pollution; safety regulations were torn apart; and business leaders in the US used the threat of moving to Mexico as a way to crush unions and block wage increases ("Failed"). Meanwhile, Mexican workers suffered from a "lowest common denominator" labor market (the number of Mexicans working for less than the Mexican minimum wage rose by 1.5 million); and the Mexican government, eager to attract businesses from the US and Canada, looked the other way while companies ran roughshod over the health and safety of the Mexican people ("NAFTA at Five"). The agreement included "side deals" to handle concerns of labor exploitation and environmental degradation, but they proved ineffective at best, and useless at worst.

NAFTA is erroneously titled — in reality, it has very little to do with trade that is actually free. In the first place, the corporations that promote agreements like NAFTA (and GATT, its worldwide cousin) receive substantial subsidies, bailouts, and tax credits from their home governments in the guise of "staying competitive." But the purpose of NAFTA wasn't even about trade: "the real goal," Noam Chomsky writes, "was to 'lock Mexico in' to the 'reforms' that had made it an 'economic miracle,' in the technical sense of this term: a 'miracle' for US investors and the Mexican rich, while the population sank into misery" (Profit Over People 105). But since companies must conduct trade to achieve this goal, perhaps there is some subtle truth to the idea of NAFTA as a trade agreement.

NAFTA established a secret tribunal that can rule on alleged violations of "free trade." When a company believes its right to trade freely is being denied, it may appeal to the NAFTA tribunal and receive a ruling (if it wins, a company is usually awarded damages for likely lost revenue). This is how the Ethyl Corporation forced its toxic gasoline additive MMT into Canada. Since the governments of Canada, Mexico and the US have agreed to abide by the rulings of this tribunal, it can effectively overpower local, state, or national laws that get in its way. So for instance: Mexico enacted a zoning law to prevent the Metalclad corporation from dumping toxic waste into the water supply for the state of San Luis Potosi. Metalclad didn't care for the law, and asked a NAFTA tribunal to give them compensation from the Mexican Treasury. On 25 August 2000, the tribunal ordered Mexico to pay US$16.7 million to Metalclad (Greenfield).

Excited by NAFTA's triumph, the powers that be began setting their sights on other countries south of the United States. In an attempt to bypass the unpleasant possibility that Congress would object to undemocratic trade agreements (and try to add on protections for the environment or workers), the Clinton administration advocated for Fast Track authority, which would allow the President to sign on to such treaties with only a yes/no vote in Congress (this plan was officially started by Nixon, but its roots go back even further). Congress, naturally, didn't like the idea, and neither did 61% of the US population, according to a poll conducted by the research firm Hart and Teeter ("What"). Still, trade officials attempted to add Chile to NAFTA's domain, despite the fact that a poll conducted by Peter D. Hart Research Associates, Inc. showed that 66% of Americans believed that the US should not expand NAFTA to other Latin American countries ("NAFTA Index").

Recognizing a perfect opportunity when they see one, two corporations in the United States were tickled to hear that Latin America was suffering from a natural disaster in 1998. Hurricane Mitch killed ten thousand people in Central and South America, and left two million people homeless. Fruit of the Loom (which cut 7,700 US jobs in 1997 by moving production to the Caribbean) and Sara Lee (which also owns Hanes), swung into action. They convinced Congress to attach a rider to the Hurricane Mitch bailout package called the Caribbean Basin Initiative [CBI]. This legislation would establish NAFTA-style "free trade" conditions in 26 Latin American and Carribean nations — for Froot of the Loom and Sara Lee. These companies stood to gain US$100 million in tax breaks from passage of the bill. Although it was ultimately separated from Hurricane Mitch relief, CBI was later attached to a "free trade" bill for Africa (see below) and passed ("Caribbean").

Meanwhile, in 1994, US officials — in cooperation with the Organization of American States [OAS] — convened a Summit of the Americas, where 34 nations from North and South America agreed to begin working on the Free Trade of the Americas [FTAA], a deal that would bring the benefits of "free trade" to everyone from Alaska to Argentina. By 1998, nine working groups were formed to hammer out the details of how this hemispheric version of NAFTA would take shape, and in that year the Second Summit of the Americas in Chile set into motion the work for a draft text of the FTAA agreement. The text was completed in December 2000, but has not been released to the public as of this writing.

The FTAA, like NAFTA, is poised to take power away from local, state, and federal governments and give power to business institutions. The FTAA website [www.ftaa-alca.org] brags about how it will be even more powerful than the World Trade Organization: "the FTAA negotiations will include areas not presently under the WTO such as a common investment regime, government procurement, and competition policy [. . .]." The agreement will work to create a business-friendly "hemispheric infrastructure" to make it easier for companies to hurt workers, destroy the environment, and smash democracy (Nason).

Opposition to the FTAA began as soon as it was born. The Zapatista National Liberation Army [Ejército Zapatista de Liberación Nacional, or EZLN] emerged from the jungles of Chiapas, Mexico on 1 January 1994, chanting "First World, Ha ha ha!" in opposition to the neoliberal regime represented by NAFTA and the FTAA. The Mercosur Trade Union Summit, a gathering of trade unions from Argentina, Brazil, Paraguay and Uruguay, demanded in December 2000 that the final version of the FTAA should be voted on by the people of each country involved. In the US, the AFL-CIO called for an end to "the failed NAFTA model of corporate privilege." In March 2001, the city of Santa Cruz, CA passed a resolution opposing the FTAA and urging US trade representatives to be more democratic in their work (Osava).

The Third Summit of the Americas in Quebec City, Canada, will be held to negotiate the final text of the agreement. This will take place amid much protest and agitation from opponents of a wide variety of backgrounds: environmentalists, feminists, labor unions, democracy advocates and students, from all over both North and South America. Like Washington DC in April and Prague in September 2000, Quebec City has been turned into a militarized zone to prevent a repeat of the Seattle 1999 debacle. A chain-link fence has been erected around all of Quebec's old Upper Town, and bylaws have gone into effect banning scarves and ski masks (Nickerson).

NAFTA and the FTAA, while encouraging us to "think globally," do their best to thwart the intentions of those who would "act locally." Regular people don't have access to the lobbyists, global communications systems, media departments, public relations firms, and Political Action Committees that multinational corporations use to get what they want. State and local legislation are powerful tools for ordinary people to guarantee freedom, environmental preservation, labor justice, and democratic rights. The soldiers of "free trade" are marching with power against these goals.

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Eric Piotrowski is an antiglobalization activist and language arts teacher in Gainesville, Florida. Hard copies of this complete work and of "Global Economics 101: Five Things Everyone Should Know about the IMF, World Bank, and WTO" are available for $1.00 postpaid. Email alt...@atlantic.net for more information. Works Cited are available upon request.