[mobglob-discuss] Is the FTAA dead, or just resting? - Murray Dobbin for rabble.ca

[Tom Childs]

http://rabble.ca/news_full_story.shtml?sh_itm=0558292bbee486e608b062a477a0cbf8&r=1


Is the FTAA dead, or just resting? 


Mexico's NAFTA experience has had a chilling effect on other southern
countries.  
     
>by Murray Dobbin 
January 6, 2005 

There is a Monty Python sketch in which a customer in a pet store
argues with the owner over the state of a parrot - motionless and
apparently deceased. The customer insists that the bird is dead; the
owner declares it is just "resting." Replace the bird in question
with the Free Trade Area of the Americas and you have the current
situation facing what was to have been the most ambitious free trade
agreement in the world. The deadline for the deal passed almost
unnoticed last Saturday and had long since been dismissed as
unattainable. In fact negotiations have been "resting" for over a
year with no new meetings scheduled. 

There are many reasons for the fading vision of free trade. One is
simply the geopolitical fact that every time the U.S. gets bogged down
in far-off wars, it begins to lose its grip on its own "back yard."


But the reasons the FTAA is struggling to survive go much deeper. Most
important, Latin American populations are no longer listening to the old
"prosperity is just around the corner" tune of the neo-liberal
crowd, whose policies have ruined their countries. In nation after
nation, democratic elections have resulted in centre-left governments
gaining power on promises of activist government, and moderating
neo-liberal policies. Brazil, Argentina and Venezuela are among them,
and Bolivia and Uruguay have followed suit. The unintended consequence
of U.S. neo-liberal policies has been to revive a powerful Latin
American nationalism. 

The FTAA as conceived by the U.S. and Canada was always weakened by
over-reaching. Southern countries were only keen on market access, while
Canada and the U.S. "demanded" intellectual property, NAFTA-like
investor-state provisions, and public services. This demand sank in
November 2003 under the weight of American arrogance. The U.S. not only
refused to reduce agricultural subsidies but had actually increased
them, all the while demanding that southern countries drop trade
barriers. 

This was especially poisonous for Caribbean nations which depend on
tariffs for most, if not all, of their revenue. Under the FTAA these
governments would have to abolish tariffs and introduce new tax systems.
Despite repeated promises from Canada, the issue of an adjustment period
for tariff elimination has never been addressed. 

Mexico's NAFTA experience has had a chilling effect on other southern
countries. Mexico has a huge head start as an export platform to the
U.S. and other countries will have a tough time competing. They also
view with trepidation the U.S. penchant for exporting to Mexico, as
"U.S.-made," goods manufactured in cheap-labour Asian countries.
As for any benefits for workers, Mexico's example is not encouraging.
Real wages in Mexico have declined by 20 per cent since 1994. 

In the U.S. itself enthusiasm for the FTAA is not exactly burning. The
issue of "off-shoring" jobs is not going away any time soon and it
exposes the real purpose of NAFTA and now the FTAA: helping U.S.
companies regain global competitiveness by facilitating their move to
locations with extremely low wages. 

George W. Bush claims an FTAA would stimulate U.S. growth but this
argument is very weak. Neo-liberal policies forced on the south by the
U.S., have resulted in slower economic growth in that region. Between
1995 and 1999, the U.S. increased its share of hemispheric economic
output from 73 per cent to 76 per cent. 

In the meantime, Latin American countries have not been idle in
determining their own direction. Brazil is focussing its energies on
building the Mercosur trade block (Argentina, Brazil, Paraguay and
Uruguay are full members; Bolivia, Chile, Peru, Mexico and Venezuela are
associate members). Mercusor is negotiating trade deals with countries
like India and South Africa. Cuba and Venezuela recently announced a
further challenge to the FTAA called the Bolivarian Alternative for the
Americas. 

Venezuelan President Hugo Chavez has called it "an alternative to the
perverse FTAA, which they have been trying to impose on us for years.
The FTAA is dead!" 

Paul Martin's Liberal government continues to argue that the FTAA, like
the parrot, is just "resting." But the customer isn't buying. 

Murray Dobbin is a Vancouver writer and author. His latest book is Paul
Martin: CEO for Canada? A version of this column has appeared in The
Globe and Mail.