Lost in statistics

Bangkok Post | Sunday Perspectives

Lost In Statistics

13 August 2006

The figures show Thais are winning with free trade - yet many of the nation’s small farmers, struggling just to scrape by, are looking to lessons learned around the world, writes SUPARA JANCHITFAH

Farmer Boonsong Sukpol of Pa Sak Hang Vieng village in Chiang Saen district of Chiang Rai is pained when he hears he is one of the people that will be benefitting from Free Trade Agreements.

"Look at what happens today," he says despairingly. "We cannot sell our own produce because of all the Chinese vegetables that flow into our country under the name of a free trade deal."

Low-priced goods and vegetables from China have invaded every nook and crook of his hometown, and cities all over Thailand, after the China-Thailand free trade deal on agricultural produce took effect in October 2003.

"The government claims that we will become the ’kitchen of the world’ (through farm produce exports). I wonder if the government has ever known that the ingredients in such a kitchen aren’t the produce of its own soil," said Boonsong, who works at his small plot of land in which he leases for 1,000 baht per rai to grow vegetables.

Boonsong looks after his vegetables carefully. He is careful in using chemicals and pesticides out of concern for the safety of consumers. Even so, no one wants to buy his produce. "The price of cabbage is less than two baht a kilo. I am willing to sell my vegetables at any price, but even at this low price there is no market for it," says the farmer.

While Chiang Saen district is situated near the Mekong River’s ports and particularly where goods and vegetables come in, its situation is not unique. People from districts and cities all across Thailand have been similarly affected.

Aso Baeche, a vegetable grower in the mountain area of Pangpuloei village in Mae Fah Lung district also struggles to find a market for her vegetables. "Sometimes, I have to pay for the cost of transportation to Mae Chan market," she says.

While living costs rise, farmers’ incomes remain very low. Unable to make up this ground, farmers and vegetable growers face poor living conditions and a low quality of life. In their own kitchens, no more home-grown garlic and onions remain for them. Boonsong and Aso rarely have meat or enough rice to eat.

While the price of vegetables have lowered with past FTAs, the costs of farming have not. The cost of fertiliser and other farming investments are on the rise. "A few years ago, fertiliser for vegetables cost only 500 baht a sack, but now it is 730 baht," said Boonsong.

When Boonsong and his neighbours speak of their hardship to the authorities, they are advised to change their occupation.

"How can we change what we have been doing? We have no education. Even our children who have high education cannot find jobs." said Boonsong.

"Restructuring funds? What are they for?" asked Niwat Panuwong, another villager. "We can hardly use it," he said.

While Boonsong and other farmers struggle to get by, the government cites statistics that paint a rosier picture and that seem to indicate all are benefitting from free trade.

Figures from the Ministry of Commerce show that Thailand had a total trade deficit worth 33,408.2 million baht with China for first five months of this year.

However, studying the data under the Asean-China FTA scheme shows that Thailand had 6,818.26 million baht surplus in trade of agricultural produce during the past six months of this year. Thailand exported 10,260.42 million baht, while it imported about 3,442.17 million baht of agricultural produce.

Another set of data from International Trade Study Centre of the University of Thai Chamber of Commerce (ITSC-UCC) shows that during the past six months, Thailand exported 7,031.97 million baht worth of vegetables to China while it imported 1203.4 million baht worth from China.

While these figures are impressive, they do not explain why so many farmers are suffering.

"Actually, 99.58 percent of the total value of exports - or 7,002.54 million baht of the total 7,031.97 million baht - was cassava and its products," explains ITSC-UCC director Dr Aat Pisanwanich. China imports Thai cassava to produce alternative energy, animal feed and other products.

Thus, while cassava is being exported to China abundantly, vegetable exports of all other kinds are declining.

"If we consider other vegetables, we are losing. For example in 2005, we exported only 13 million baht worth of fresh vegetables and imported about 77 million baht. We exported dried vegetables (excluding dried longan) worth 600,000 baht while importing about 600 million baht," Dr Aat elaborates.

While in 2002, there were only two types of fruits and vegetables with which Thailand had trade deficits with China, by 2004, the number had soared to 63 different kinds.

He hopes the government will make information like this more clear and accessible to all groups of people, and not mislead the public into believing that Thailand’s vegetable growers are benefitted by the trade deal with China.

While free trade statistics may show signs of surplus, the gains are those being reaped by a slim percentage of large-scale, commercial farmers. Meanwhile, small farmers and vegetable growers suffer losses that are lost in statistics.

"The free trade deal with China should be a lesson for the government before it heads into other new trade agreements," says Dr Aat.

"I don’t think that some government officials have gained anything from free trade talks as many of them have to do whatever they are assigned to do," he says. Many of them may have failed to "include the social and environmental impacts into their economic model calculation," he adds.

"There should be the details about which groups of people gain from the deals and which groups of people will be adversely affected by the deals," he says, adding that signing more FTAs without studying the real impacts is counter-productive.

The government, adds Dr Aat, should hire independent researchers to study and publish the real impacts of the free trade agreement with China.

FIGHTING FTAS

While preliminary studies into the effects of FTAs could prevent much suffering, several cases in countries around the world show that a strong public opposition to trade deals can stop, slow or shape the process so that the suffering of small farmers and businesses are avoided.

A Fighting FTAs-International Strategy workshop was held recently in Bangkok and brought some of these resistant voices together to share stories and strategies for fighting FTAs (see related FTA overview).

One of the most successful efforts to resist free trade took place in South Korea, where the coalition of South Korean farmers is so strong that it was able to hold back the government’s free trade talks with the US.

The Korean resistance was not an easy, or even bloodless, one though. The former head of South Korea’s Federation of Farmers and Fishermen, Lee Kyang Hae, who had lost his farm through WTO trade liberalisation, and claimed the trade liberalisation process would destroy Korea’s economy and agriculture, stabbed himself to death in protest against the WTO.

His death reflected the desperation that incited another 3.5 million Korean farmers to fight the free trade talks.

Choi Jai-Kwan, a chairperson of the Korean Peasants League (KPL) who participated in the workshop, says that he hopes to not see cases of such sacrifice in the future.

"We will continue fighting for our rights, but we don’t want to use this measure (violence against themselves). But sometimes the government is unwilling to listen to us, that is why some farmers took their own lives in protest," he said.

Choi also told of his own organisation’s experience in fighting trade liberlisation. "The unity of farmers is not enough, we need to find more (of an) alliance,"said the Korean farmer leader, adding that it is important to involve other citizens in the fight against FTAs.

"Knowledge will guide more people to participate in the forum," he said.

FTA opposition in Korea is comprised of people from 14 sectors of society, including those in the film industry.

Earlier this year, a number of Korean movie stars joined the protest against the Korean-US FTA, because of a section that reduces the mandatory days for domestic movie screening and thus, allows more time for foreign movies in theatres.

The South Korean government announced in January that the reduction, which started in July, would cut the current 146 days per year required for screening homegrown movies to 73. Movie stars were particularly interested, knowing that the deal helps Hollywood gain access to the Korean market.

Korean labour organisations have also joined the anti-FTA movement. Such groups initially suspected only agricultural sectors would be adversely affected, but have since realised that small and medium-sized businesses are impacted as well, says Choi.

"The government began to privatise water, electricity authority, pharmaceutical and other public utilities as requested by our trade talk partners, but we have voiced our concerns and presently the government promises not to privatise these public utilities," explained Choi.

Choi pointed out the dangers of free trade deals. "We cannot control it as some laws will be amended to facilitate investors who would pay little concern to our environment," he added. (see related story on environmental issues)

"Our coalitions are aware that they will experience direct and indirect effects from the FTAs. That is why they are helping us to educate people by performing concerts and organising seminars. They used this as the means to educate people at every district.

"Because no one has a clear idea about FTAs, we have gained cooperation from 300 academia and economists nationwide. They conducted research for three months and came up with about 700 pages on the impacts of FTAs," said Choi.

Choi said the alliances have produced a number of documentaries for public consumption so that people understand the impacts of FTAs and as a means to pressure for state media to report news accurately.

The Korean farmers will continue their opposition this coming September as the trade talks with the US resume. The FTA opposition plans to organise protests in every district, to coincide with the third anniversary of Lee’s death.

Cha Nam-ho, the director of Policy Department of Korean Confederation of Trade Unions, pointed out a crucial impact of FTAs."Labour law will be amended to accommodate the FTAs, and this will lower the standard of living as well as the way of life of labourers. We have been fighting for a better living conditions and wages for many decades, and the FTAs will bring it back to the state where employers only want cheap labour and labour unions aren’t allowed to organise," he said.

SUCCESS IN CENTRAL AMERICA

Countries in Central and Latin America have also mounted opposition efforts to FTAs, and have had success in delaying the deals.

One such example is Costa Rica, where even after the government agreed to sign Central American Free Trade Agreement (CAFTA), the public’s strong opposition to it has pushed back the signing indefinitely.

"People learned from the devastating experience of Mexico after it signed the NAFTA and Chile after it signed an FTA with the US. So we mobilised the public to put pressure on the government until our parliament refused to approve the terms of the agreement," said Maria Eugenio Trejos from the Pensamiento Solidario of Costa Rica.

While there are many issues that have fuelled the public resistance, Trejos explains one of the more significant: "We are united because we are pressured to import weapons despite the fact that we have no army."

Trejos credits the success of Costa Rica’s FTA resistance to the high literacy rate of people involved in the movement, and their ability to access information. Their coalition was also strengthened by engaging academics in the movement.

"Academia helps in finding out information and conducting research that supports the movement," says Trejos.

She also points to the strength of her country’s democratic institutions and the transparency of her government’s actions. "It’s impossible that any agreement or law or act would be passed on a weekend or ... in a way that the people are not aware of. We have strong parliamentary system - that is why we can prolong the signing process."

She explains that there are also laws that mandate indigenous people be consulted, and that necessary education and translation efforts draw out the process. "We need more time to make them understand," she says.

These efforts were not without results. "In Costa Rica, the first group that opposes the FTA is the indigenous people," she adds.

In Colombia, as well, there has been a strong public opposition to an FTA with the US.

"On August 12, 2004, we mobilised more than a million people in our capital city. Indigenous (peoples) blocked the highways. The government shot people, over 500 people were injured and six people died.

"However, we were able to bring the FTA with the US under scrutiny of the parliament and there will be a vote in October," said Aurelio Suarez from Asociacion Nacional por la Salvacion Agropecuaria from Colombia.

Closer to home, the Filipino resistance to an FTA with Japan took an interesting approach when they took the matter to their Supreme Court. Mario Aguja, a parliamentarian of Akbayan political party, said that civil society and parliamentarians had drafted an appeal to court saying that while workers and farmers will be affected by the deal with Japan, they had not received any information about the terms of the negotiations - and that this was violation of the Constitution.

"We want information. As a parliamentarian, we have to protect people. Without information, how could we protect our people?" Aguja asks.

Such experiences of people around the globe left an impression on the workshop’s Thai audience.

Jittra Kachadecha of the Textile Labour Federation in Thailand said that she learned that an FTA will affect the labour sector as well. She feels it is important that the Thai government allow the entire public to give inputs into the trade negotiation process.

"We always receive the information that an FTA will allow us to buy cheaper products, but we have never been told that when the agricultural sector is destroyed, farmers will have to seek jobs in the industrial sector. That means our employers can find cheaper labour, and that we will be competing for jobs and work in an unsafe workplace."

This is the fourth in the series on Free Trade Agreements and their ramifications.

FTAs around the world

Recently a group of NGOs comprised of the bilaterals.org group, FTA Watch, and GRAIN organised a workshop called "Fighting FTAs International Strategy" in Bangkok. There were 54 participants and observers from 19 countries that joined in the discussion about FTAs. The following is a summary of the state of FTAs across the world. Many of the examples given here have been selected because of their particular relevance to Thailand.

Asia and the Pacific region:

A considerable number of bilateral free trade and investment agreements have been completed in this region, and a number of other deals are currently underway. One of the works-in-process is the US-Asean FTA, which will be comprised of bilateral agreements separately negotiated by the US with each Asean member. Meanwhile, the EU is considering pursuing a direct bloc-to-bloc EU-Asean FTA.

Industrialised nations like the US, Australia and New Zealand have also worked to form preferential trade deals with developing Asian countries. Japan and Europe have just recently started to follow suit.

FTAs are now very popular with the Asian governments, particularly those of Singapore, Korea, Malaysia and Thailand, all of which are trying to position themselves as hubs for the new trade and investment flows.

China and India, the biggest emerging economies in the region, are striking their own FTAs, heightening the competition for market access and natural resources.

An Australia-Thailand FTA was signed in July 2004 and came into force on January 1, 2005. It covers trade in goods, liberalisation of services, protection of intellectual property rights (IPR) and creation of new investment privileges.

The China-Thailand FTA for agricultural produce is the first of its kind formed between Beijing and an Asean neighbour. Tariffs for 188 types of fruits and vegetables have been cut to zero. The agreement, which took effect in October 2003, is part of the China-Asean FTA.

Thailand has a trade relationship with India as provided for under the India-Asean FTA. The agreement, which was put forth in 2003, covers goods, services, and investment.

The US-Thailand trade negotiations towards a bilateral agreement covering investment, services, government procurement, intellectual property and agriculture, began in June 2004, and are ongoing. Many expect the agreement - of which several chapters have been leaked to the public - to be modelled on the US-Singapore FTA.

Thailand also has FTAs with New Zealand and Peru (both 2005), while a possible one with Chile is being studied.

Japan has signed FTAs with Singapore (January 2002), Mexico (September 2004) and Malaysia (December 2005). FTAs with both Thailand and the Philippines are finalised, but not signed. The nation began trade talks with Brunei and Vietnam earlier this year, while those with Korea remain stalled. Korea has FTAs with Singapore, Chile, Asean and EFTA (European Free Trade Association), and is in the process of talks with Japan, the US and Canada.

Latin America and the Caribbean

Latin America, undergoing regional and sub-regional economic integration initiatives, is also involved in many bilateral free trade and investment agreements. While many of these have long histories, the movement began with the North America Free Trade Agreement (NAFTA) that was signed between Canada, Mexico and the US in 1993. Because of the intensity and history of these deals, social resistance to FTAs and bilateral investment treaties (BITs) is stronger and deeper in Latin America than anywhere else in the world.

Japan and Mexico signed a bilateral free trade agreement in September 2004, which took effect in April 2005. Japan initiated this deal in an effort to compete in the Mexican market against both US (NAFTA) and EU (an EU-Mexico bilateral deal that had also, though earlier, been spurred by NAFTA).

Chile, Latin America's most active country in pursuing bilateral trade agreements, is involved in 36 FTAs.

Africa and the Middle East

Africa and the Middle East are feeling pressure from a number of sides to enter into direct bilateral trade and investment deals for both political and economic reasons. Oil and geopolitics are key factors.

China, the EU and the US are pursuing FTAs with Middle Eastern countries and blocs in order to protect or secure access to energy supplies and mineral resources.

At the same time, the US and the EU have important geopolitical agendas in the region that revolve around the Israeli-Palestinian conflict and the war in Iraq. Workers' rights are a major issue in at least the US-initiated FTAs in the Middle East.

source: Bangkok Post