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FTA: Empowers the rich and weakens the poor

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Freely translated by Anoosha Boralessa (Nov 2015). Not reviewed by or any other organization or person.

Published Tuesday, 20 July 2004

FTA: Empowers the rich and weakens the poor

Author: Rodrigo Carazo*

In America, the beginning of the nineties is defined by President Bush (Senior)’s call to establish a united continent for free trade. All countries will become rich by liberalizing their markets. The FTAAs will be a miracle.

The Heads of State that were invited, participated in that meeting. In 2005, the biggest free market in the planet will start operating. Mexico, Canada and the United States of America made the first move by setting up NAFTA, which is ten years old today. The rest of the continent has doubts, as does the promoter, given opposition in its own country. One works more slowly, but one works without taking a break. Not for the US. NAFTA promoters are not US politicians but directors of big companies. Their markets do not have to be limited to the continent; while pressure is applied for the second step of the FTAAs (an FTA with five nations in Central America), other FTAs are negotiated separately - with Chile, Singapore, Australia, several African countries, Morocco, Colombia, the Dominican Republic, Ecuador and Peru and with all countries that open their door. These treaties cover all possible areas.

Robert Zoellick’s mandate is to expand the biggest market for his country. He said this: those who want to be trade partners with the US cannot limit themselves to signing trade agreements. They must support US foreign policy and US security and strengthen their positions before the World Trade Organization given that “to negotiate with the US is a privilege”. The first general information gap arises in the confirmation that it is not an issue of free trade between all countries; rather all countries trading on an individual basis with the US.

Today, Central American powers have already signed an FTA that awaits parliamentary ratification to become effective. An FTA was signed that gives the big power a huge advantage: its right to export is safeguarded by granting high subsidies to its exporters indefinitely, while small countries have undertaken to eliminate their protectionist tariffs within a set period.

Such a treaty is not limited to opening up purchases and sales. It touches on investor liberties and the operation of extraterritorial tribunals that restrict sovereignty, given that the treaty norms provide that investing companies can charge the State with breaches but the State cannot charge them. Furthermore, the FTA regulates intellectual property. This means that it protects patents, including pharmaceutical ones, and especially ones for agricultural products. This limits consumer access to generic products in small countries; the way it regulates pubic procurements seriously harms local producers, who will not be able to compete in their own country with big multinational companies. In the case of Central America, the FTA has 22 chapters that regulate everything. There is only one Chapter on trade. The other chapters establish a type of commitment. It must be recalled that this FTA is not for a limited duration and that the only recourse that Central American Countries have to liberate themselves of it, is to denounce its validity. This is virtually impossible for weaklings. In summary, it is a treaty that regulates everything for the benefit of those who made the initial proposal: those who represent multinational businesses.

We Costa Ricans challenge the FTA. We strongly criticize that our commitment is classed a treaty, while the US undertaking is limited to an agreement. What this means is that Costa Rica, for example, is approving a bilateral agreement that is only trumped by the Constitution. This is an agreement that we cannot modify by the exclusive will of our country; however, the US can modify it without consulting Costa Rica. So declare some experts. Zoellick firmly states that once signed, the FTA cannot be modified by its counterparty.

It is worthwhile clarifying that, in addition to everything mentioned above, the FTA includes the following: commercial insurances, electricity generation, communications, public services, intellectual property, everything that may be controlled with money and economic power. The FTA practically obliges the privitization of those activities and businesses, that have made Costa Rica stand out from other countries: health, education, eliminating the army and everything that has converted it into a country of peace, thanks to the social justice, the overcoming of which has motivated our governments for many decades.

10 years after Mexicans continue to leave their impoverished country, its local salaries are much lower than previously and this is a sign of poverty. The Carnegie Endowment (which is based in Washington) has produced studies on the FTA that testify to this.

We in Central America see the Mexican example and we read what the experts that analyse the situation of our neighbouring country, say. We oppose this inroad of big business that seeks to manufacture in the whole world, from China to Costa Rica, by exploiting the lowest salaries possible.

We have been impacted by a negotiation - the FTA - which was done in virtual secrecy. We do not wish even to be witnesses to the final approval of such treaties that will only generate violence.

Studies of the Mexican situation, as Mexican Catholic Bishops have affirmed, and economists not hired with big companies repeat in Mexico today, demonstrate that the giant companies export more but the great majority of people have a lower living standard. Recently, the Latin American Council of Churches for Central America – Ecumenical - has openly declared in a document signed on 8 July this year, their rejection of the FTA. They declare "Indignation and resistance have moved us".

Those interested in obtaining an FTA advantage, will continue to fight for its legislative approval; however, at the same time, countless women and men in our countries will work, without rest, to avoid this. We believe that this treaty is rather an exhibition of so many experiences in our history that have produced intense pain as a consequence of serious trickery.

It is on account of the imposition of such a measure that our countries have endured negotiating this FTA. Moreover, it is expected that the result will be the same as has arisen so many times in the past: once again, there will be all forms of violence, starting from serious exacerbation of poverty and exclusion that is already endured and experienced in many cities in our continent, both in the North and the South where organized criminal gangs, including groups of children in the streets, the so-called “maras”- are serious instruments for crime. The "No to the FTA" that is expressed in so many parts of the continent is an expression of the people’s will. It signals a continental duty.

(*) Former President of Costa Rica; El País, 19-7-2004