Commentary

Can South America Kill the FTAA?

On November 20 and 21, the leaders of all countries of the Americas, with the exception of Cuba, will gather in Miami for the third Free Trade Agreement of the Americas (FTAA) summit. They will gather under intense pressure to resolve some of the fundamental contradictions that threaten to derail the agreement or at least to push back the 2005 deadline.

Extending the deadline would be a defeat for the U.S., the FTAA's biggest champion since Bill Clinton convened the "Summit of the Americas" in Miami in 1994. At that time, Clinton spoke of creating a free trade zone that would stretch from Alaska to Tierra del Fuego. The FTAA, Clinton promised, would usher in a new era for the Americas, one of prosperity and equality for all based entirely on the liberalization of trade.

Since then, the FTAA has become the utopia for neo-liberals throughout the Americas. The Chretien government signed on quickly, as did many of the countries in Central and South America. However, there have been a few unexpected bumps on the road.

Economies in Latin America were in crisis, particularly in Argentina, where President Menem, who had been the poster-child for neo-liberalism, brought the country to its knees by following the prescriptions of the IMF and World Bank.

In addition, the anti-globalization movement exploded onto the world stage, and the dictum that free trade equals economic prosperity was shaken to its core. While the leaders of the Americas continued FTAA negotiations, a continental popular resistance movement grew rapidly, culminating in the vast protests against the FTAA in Quebec City in the spring of 2001.

Nevertheless, under the leadership of George W. Bush, the U.S. was determined to carry on. The American economy was losing steam, and total access to the markets of the Caribbean and South and Central America (Mexico and Canada were already covered under NAFTA) was seen as the boost American capital needed.

However, post-September 11 the attention of the Bush administration turned elsewhere. American protectionist policies, which shut out Canadian wheat, steel and softwood lumber, served as a living reminder of the U.S. interpretation of free trade. Violence directed against Mexican illegal immigrants, including the execution of a Mexican citizen despite repeated pleas from Bush's friend and ally Vicente Fox, did much to sour relationships and underline that while cheap goods from Mexico were welcome in the U.S., its people were not.

At the same time, the election of Chavez in Venezuela and Lula in Brazil provided an expression at the state level for the anti-neo-liberal sentiment in the Americas. Chavez, whose government has survived two U.S.-backed coup attempts, has been the most vocal in his opposition to the deal. Just last week, he told a reporter "Venezuela is on the side of the people and we propose a new integration system that is definitely not the FTAA which, as it has been put forward, is a perverse mechanism that would be a death order for the future of the region."

The response of the Lula government to the FTAA negotiations has not been as clear cut. Brazil and the U.S. are the co-chairs of the FTAA negotiations round leading up to the Miami Summit, and the Americans have spent their time trying to use the divisions within Lula's Workers' Party to their advantage.

U.S. Trade Representative Robert Zoellick, who was in Brazil last week, met with several senior cabinet ministers in Lula's government, including Vice President Jose Alencar. While in Brazil, Zoellick announced that the U.S. is willing to remove all clothing and textile markets from the FTAA within five years. Brazil's textile industry is one of the few where support for the FTAA is high. Vice President Alencar also happens to own the country's largest textile manufacturing company.

However, concerning agriculture Zoellick remained firm that the reduction of farm subsidies and tariffs could only happen through WTO negotiations and not the FTAA. The agricultural industry is the other major Brazilian industry that favours the FTAA if, and only if, agriculture is put on the table.

Some on the left have urged Lula to declare Brazil will not sign the FTAA when he meets with George W. Bush in Washington on June 20. And while it is true that the FTAA cannot be implemented without the signatures of all 34 member countries, the pressure on any one country that bucks the trend will be immense.

Lula, since his election, has paid a great deal of personal attention to creating a unified South American bloc. He has urged the strengthening and expansion of the Mercosur trading bloc (which the Americans have targeted for elimination under the FTAA), set up a group of "friendly countries" to seek a solution to the Venezuelan crisis, convened a new summit of South American leaders and led opposition to the U.S. aggression against Iraq.

In other words, he is trying to create a bloc strong enough to counter American influence and control in the hemisphere. It remains to be seen whether or not his efforts will succeed in the long term. It will definitely be an advance for the peoples of the Americas, though, if these efforts succeed in killing the FTAA in the short term.