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News :: Miscellaneous |
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It's Not About "Free Trade" |
Current rating: 0 |
by Mark Weisbrot
(No verified email address) |
18 Apr 2001
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Mark Weisbrot is co-director of the Center for Economic and Policy Research (www.cepr.net) in Washington, DC.
Mark ran to represent East Central Illinois in the Democratic primary for Congress in 1992. He formerly taught at Eastern Illinois University in Charleston. |
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See also:
www.cepr.net
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It's Not About "Free Trade" |
by Mark Weisbrot
(No verified email address) |
Current rating: 0
18 Apr 2001
|
"People of the same trade seldom meet
together, even for merriment and diversion,
but the conversation ends in a conspiracy
against the public . . ." So wrote Adam Smith
more than two centuries ago, and it is equally
true today.
Quebec City is now host to numerous
meetings of these "people of the same trade" -
- the businesspeople who have access to the
secret text of the "Free Trade Area of the
Americas." The fact that the heads of major
corporations such as Merck and IBM can read
the draft of the agreement, while the press and
the public are kept in the dark, speaks volumes
about what is being negotiated.
With the enthusiastic support of the
Bush administration, leaders of 34 nations are
now gathering in Quebec to discuss the
FTAA. The name of this treaty is misleading:
it is not primarily about "free trade." In fact,
this agreement will almost certainly strengthen
some of the most expensive, economically
wasteful, and (in the case of life-saving
pharmaceuticals) deadly forms of
protectionism. These are the patents,
copyrights, and other monopolies commonly
grouped under "intellectual property rights."
While tariffs rarely increase the price
of a good by more than 20 or 25 percent,
patent protected prices can be ten or twenty
times the competitive price. One of the main
purposes of these "free trade" agreements is to
expand this lucrative form of protectionism
across international borders.
Brazil has already run into trouble in
the World Trade Organization for its laws
dealing with the manufacture and import of
generic AIDS drugs. These laws have formed
an important part of Brazil's remarkably
successful program for treating AIDS. Brazil
has provided "triple-therapy" drugs -- the
same ones that cost $12,000 a year to treat
people here, but can be produced for as little
as $500.
Generic AIDS drugs have enabled
Brazil to provide treatment to almost all who
need it, cutting the death rate from AIDS in
half. But Washington is currently challenging
Brazil at the WTO, contesting part of the
Brazilian law that allows for the manufacture
and import of these generic drugs.
Agreements like the FTAA also
expand protections for foreign investors,
giving them rights that they would not be able
to win in their home countries. There was a
little-noticed provision in NAFTA that
allowed foreign investors to sue governments
for regulations that infringed on their potential
profits. This has turned out to be an
environmental nightmare.
For example, the US- based Ethyl
corporation (the one that brought us the lead
in leaded gasoline) brought a complaint
against the Canadian government in 1997. For
public health reasons, Canada had prohibited
the import of another potentially dangerous
gasoline additive known as MMT.
This additive was effectively banned in
the United States. But the fear of losing the
NAFTA lawsuit was enough for Canada to
repeal its law, and pay $13 million dollars in
damages to Ethyl.
Now imagine extending these NAFTA
provisions to 31 more countries and you can
see why environmental organizations are
adamantly opposed to the FTAA. They're not
the only ones. Workers in the United States,
Canada, and Mexico have now had seven
years of experience with NAFTA -- the
FTAA's pilot program -- and it hasn't exactly
turned out to be the "win-win" deal that they
were promised.
For the United States, the main
problem has been the loss of relatively better
paying manufacturing jobs, and the downward
pressure on wages as companies move or
threaten to move south. Canada has also lost a
good part of its manufacturing sector, and
income inequality has worsened significantly.
Mexico has seen declining real wages for its
workers, as well as falling income for the self-
employed (a much larger part of the labor
force than it is here).
For Latin America as a whole, the last
two decades of "free trade" have been an
economic train wreck. Income per person has
grown about 7 percent over the last 20 years,
as compared with 75 percent in the previous
two decades.
In Quebec a "wall of shame" -- as
press reports have described it -- was
constructed to keep protesters away from the
meeting. Three miles of chain link fence and
concrete abutments were supposed to
compensate for the meetings' lack of
legitimacy among the populace.
The WTO and NAFTA are the product
of a decades-long effort to rewrite the rules of
international commerce in ways that ignore
the needs of most of humanity, as well as our
natural environment. But humanity is catching
up, and has learned some lessons. The
misnamed "Free Trade Area of the Americas"
will not withstand public scrutiny.
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