Workers and the FTAA

Workers and the FTAA (Free Trade Area of the Americas)
Presentation by Jesus Gonzalez,
Director of the Human Rights Department of the Trade Union Congress of Columbia, and Professor at the Valle University.

Please note: The presentation briefly referred to the WTO, but mainly drew attention to the Free Trade Area of the Americas as a regional trade agreement which contains many features in common with the WTO.

Based on a paper by Beethoven Herrera Valencia Professor Emeritus at the National University.

Translated from Spanish by Eileen Haley.



1. Globalisation: A Process with Winners and Losers

Trade is increasing throughout the world economy, a development facilitated by a reduction in tariffs, customs duties and telecommunications charges. But the more world trade grows, the less access there is to basic goods and services, with the result that poverty and destitution have increased as well. And wealth is increasingly and aggressively concentrated in the hands of a few.

After a decade of economic integration and freeing-up of economies, most Latin American countries show a negative trade balance. This is the result of inappropriate economic policies which have kept currencies revalued and interest rates high, impacting exporters. But, in addition, the economies of the centre (for example, the United States and Europe) have maintained high subsidies for their own business sectors, import quotas, and a wide range of para-tariff controls.

In summary, globalisation is advancing rapidly, but it is a process in which certain countries are emerging as victors, while others are suffering losses. Moreover, most of the world's trade is conducted amongst the 500 big transnational corporations, and it is they who take trade and investment decisions, with national governments playing a passive role.

2. Alternatives: Integration or Opening-up?

In the Americas, various strategies for entering into globalisation have been debated. There are those who put forward that the different regional groupings (MERCOSUR, CAN, CARICOM and SICA*) should be consolidated first, with the FTAA formed out of their eventual fusion (the "building blocks" strategy). This strategy, which is being promoted by Brazil, would aim to strengthen the bargaining power of the countries of the region and consolidate the foundations of the region's own competitiveness before entering into open competition with the US economy.

On the other hand, there are those who propose that countries in the region should enter one by one into the northern hemisphere market made up of the NAFTA countries (USA, Canada and Mexico). This strategy, known as the "hub and spokes" strategy, would minimise the bargaining power of the joining country, and give it no choice but to accept existing agreements.

This is the position espoused by the United States, and there are several countries, including Chile, Colombia and Costa Rica, which have expressed their interest in adopting this bargaining mode. MERCOSUR is currently in trouble due to the recession in Argentina, and the Andean Community is in crisis. These difficulties are creating serious problems for the "building blocks" strategy.

3. Competition Based on Uncertainty

It cannot be denied that globalisation is spreading uncertainty throughout Latin America. This is to be expected, given its neo-liberal inspiration.

The spread of sub-contracting and temporary hiring is leaving workers without any direct relationship with the corporations that benefit from their labour. In these circumstances, these workers cannot exercise their right to organise or bargain collectively as stipulated in the international conventions of the ILO, and all national industrial legislation becomes a dead letter. In addition, such workers are left without social security.

The governments and corporations which have imposed these slavery-like hiring practices may well believe that they have made a great discovery in the search to curb the growth of unionism; but they end up with an unskilled workforce poorly placed to increase productivity in a context of intense global competition.

The growth in world trade is based upon prison labour, using forced labour and child labour.. In Latin America, governments give in to the pressure of transnational corporations to provide all kinds of tax, exchange and credit breaks to foreign investors, even offering to lift environmental controls and social welfare regulations to enable them to operate with complete freedom, or ban unions in the maquiladora Zones (free trade or export processing zones).

This is what we have called the "race to the bottom".

In view of the above, it is important to strengthen and improve state action to ensure the effective regulation of the finance flows which are creating instability and volatility in the region. In order to address the challenges of globalisation, in this view, emphasis should be placed on the importance of national policies based upon each country's specific cultural characteristics.

To act effectively in this difficult context, unions are needed -- unions with sturdy structures, strengthened operational capacity and above all solid policy definition. Unions will need to work tirelessly to increase membership and ensure the effective incorporation of women and young workers into union activities and leadership. This has to go beyond mere lip-service; it has to mean opening up spaces to be accessed by those sectors which make up the majority of the workforce, but which have been, to date, a minority of the unionised. Democracy demands this; but more than anything, justice demands this, given that young people and women, like ethnic minorities, are paid less and still encounter discrimination in the labour market, even though their access to education has improved.

By the same token, unions should be using new technologies to keep in touch, in real time, with their members and with their allies throughout the world, and to mount an appropriate response to the furtive actions attempted by multilateral bodies and governments, behind the backs of their citizens. This is what made possible the actions carried out at Seattle, Davos and Quebec. The point needs to be made that, if the process of globalisation and integration, because of the way it is being conducted, is of no use to the majority of the people of Latin America, we cannot be expected to stand by and simply observe the brutal concentration of wealth and the benefits of technological progress in the hands of the few.

4. An Alternative Position on Hemispheric Integration

General principles: Trade and investment are not ends in themselves, but tools for fair and sustainable development. The key goals of these alternative policies are the promotion of sustainable national development projects, social welfare and the reduction of inequalities at all levels.

Human rights: This agenda promotes the broadest possible definition of human rights, encompassing civil, political, economic, social, cultural, gender and environmental rights, as well as the rights of indigenous peoples and communities.

Environment: Hemispheric agreements should allow governments to channel investment towards economic activities which are sustainable from the environmental point of view.

Industrial matters: Hemispheric agreements should include provisions guaranteeing workers' rights and promoting improvement in working conditions and in the standard of living of workers and their families.

Migration: Economic and financial agreements should include agreements on migration, in acknowledgment of the great diversity of migration-related situations which exist among the countries of the continent. At the same time, governments should ensure that their industrial legislation protects all workers equally, regardless of their migration status.

The Role of the State: Hemispheric agreements should not put brakes upon the capability of nation-states to meet the social and economic demands of its citizens. Agreements should allow states to maintain public enterprises and policies of acquisition for the sake of national development objectives, at the same time combating corruption within the governments themselves.

Foreign investment: Agreements should allow governments to regulate or reject any kind of investment which makes no contribution to development, above all speculative capital flows.

International finance: Agreements should place a tax on foreign exchange transactions, to create funds which can be used for development. Agreements should also allow governments to tax speculative utilities, to regulate the minimum time investment may remain in a country, and to establish incentives for direct and productive investment.

Intellectual property rights: Agreements should protect the rights and the survival of agricultural workers and their communities, which act as the guardians of biodiversity. The interests of corporations should not be allowed to impinge upon these rights.

Sustainable energy development: An international agreement should allow its signatories to sue countries which attempt to obtain economic advantages at the expense of sustainability.

Agriculture: Measures should be taken at hemispheric level to support protection for agricultural workers and the customary law rights of indigenous peoples to live on their traditional lands. Measures should also be taken to achieve parity in agricultural subsidies (at GDP percentage levels).

Access to markets and rules of origin: Access to markets for foreign products and investment should be defined and assessed in the framework of national development plans. Non-tariff criteria should include measures to ensure that these reflect legitimate social interests, not the protection of specific corporations.

Compliance and dispute resolution: To ensure the substantiality of the proposed rules and standards, they should be accompanied by solid mechanisms to guarantee the resolution of problems.

Conclusion

The FTAA should include a clause on technology transfers, an environmental clause guaranteeing the protection of natural resources, and a socio-industrial clause guaranteeing respect for the rights enshrined in the Universal Declaration.

Latin America has suffered a severe energy crisis and is seriously behind in terms of port, railway and highway infrastructure. Our communications networks are not competitive, and governments are not addressing the deficiency.

The FTAA negotiating process lacks transparency and the small amount of dialogue granted to representatives of civil society has practically been nothing more than a formality. It is almost as though the suggestions of unions and community organisations have simply gone to a letter box, while government delegates take up all the stage and make all the decisions in the negotiations, in permanent consultation with corporations.

It should be remembered that during the negotiations leading to the creation of G-3 (Colombia, Venezuela and Mexico), both the Colombian trade union council and the organisations representing industrialists and exporters expressed their rejection of any agreement arrived at hastily, without consulting the needs of the nation.

The Colombian government of the day signed the agreement nevertheless, in order to cement the commitments and prevent the incoming government from backtracking on them. Shortly afterwards, the Mexican peso was devalued, and since no exchange safeguard had been put in place to deal with such a risk, the other countries were affected. The trade balance has been in Mexico's favour ever since.

In whose name does a government negotiate if it does not listen to the voices of its citizens, businesspeople and workers, the voices of the sectors of society which are committed to production?

Given the above, it is necessary to demand greater transparency in the FTAA negotiating process and effective access for the expressions of civil society.

As it stands, the FTAA process, like NAFTA's, is restricted to trade and investment protection issues, with complete disregard for the social, environmental and industrial impacts of the process. This is because competitiveness is in fact based on the degradation of the environment, the impoverishment of the population and the casualisation of the workforce.

Competition based on the exhaustion of non-renewable resources is not sustainable. It is imperative to improve health and education systems, to ensure that they are available to all, and to guarantee service quality and efficiency. Without these conditions, the countries of South America will be condemned to backwardness and poverty.

Source:

Herrera Valencia, Beethoven, 10 October 2001. Support material prepared for the Conference on Entering into Globalisation, organised by fontebo.

Translator's note:

* MERCOSUR: Southern Cone Common Market, made up of Brazil, Argentina, Uruguay and Paraguay.

CAN: Andean Community, made up of Bolivia, Colombia, Ecuador, Peru and Venezuela.

CARICOM: Caribbean Community, made up of Antigua and Barbuda, Barbados, Belize, Bahamas, Dominica, Guyana, Grenada, Haiti, Jamaica, Montserrat, St Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago.

SICA: Central American Integration System, made up of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama.