April 20, 2001 atimes.com Global Economy

THE ROVING EYE From Alaska to Patagonia, via Quebec By Pepe Escobar

It takes a wall these days to protect a summit. The so-called "Wall of Shame" is a fence built on cement - five kilometers long and three meters high - guarded by the largest security force in Canadian history, and erected by Quebec city authorities. It is supposed to isolate the area where the Summit of the Americas will take place from April 20-22.

After spectacular fiascos in Seattle, Prague, Davos, Washington, Melbourne and Nice, for a city to host a globalization-related summit is now the reverse of hosting the Olympic Games. The Darth Vader-equipped police contingent is terribly expensive. There is no commercial appeal to an area under siege. And the results are dreadful for the image of the city in question. No wonder the next World Trade Organization (WTO) meeting will be held in remote Qatar - the only candidate for the job.

The Quebec Wall of Shame will theoretically protect delegates and 34 heads of State from an expected 30,000 protesters from all over the Americas, plus a contingent of dedicated Europeans. They won't be deterred: anti-globalization protest is now a cottage industry.

One of their supreme icons, though, will be absent. El Comandante Fidel Castro was not invited - to the chagrin of his many Latin American friends, such as Venezuelan presidente Hugo Chavez. The previous Summit of the Americas was in Chile, in 1998. Nobody remembers what happened. This one will discuss security, the politics and repression of drugs, and - at least on paper - transparency issues. But the meat of the matter is the Free Trade Area of the Americas (FTAA) - proposed as a kind of gigantic North America Free Trade Area (Nafta) stretching from Alaska to Patagonia.

According to its enthusiastic supporters, the FTAA is supposed to create a market of 800 million people in the three Americas, producing US$11.5 trillion in goods and services annually. For its very vocal critics, FTAA is a mixed salad of the rules of Nafta - which arguably ruined Mexican agriculture - and the worst aspects of the now-defunct Multilateral Trade Agreement (MIA), which used to be discussed behind closed doors at Organization for Economic Cooperation and Development meetings in Paris.

From a corporate America point of view, the FTAA is a gift from heaven. A great market for foreign direct investment. Loads of strategic commodities. A cheap workforce. Plenty of export appeal to US consumer technology, machinery and financial services. For insatiable American consumers, the FTAA could mean a deluge of Argentine shoes and handbags, Brazilian orange juice, Chilean wines and Peruvian fish.

The US may be required in the final agreements to drop a loaded basket of quotas and price supports. But to qualify the FTAA as "free" is a little lopsided. The US is responsible for nothing less than 75.7 percent of the region's GNP. Brazil, in contrast, has only 6.7 percent, Canada 5.3 percent and Mexico 3.9 percent. The remaining 30 countries combined account for only 8.4 percent. In terms of GNP per capita, the US hits $33,000, Mexico $4,400 and Nicaragua something like $450.

The MIA collapsed in Paris in October 1998. The Millennium Cycle talks of the WTO collapsed in Seattle in December 1999. But the FTAA is alive and kickin'. For Bush II - backed by a full choir of US multinational companies - this is one of the top priorities. American politicians and businessmen always considered Latin America "their own backyard" - and a natural market reserved of the US, yet corporate America obviously dreads European and Japanese competition "in their own backyard".

Brazilian President Fernando Henrique Cardoso is more ambivalent. Brazil - like France in the European Union - has been caricatured in the American press as prone to resist or slow down trade liberalization. In fact, it practices a nuanced approach, or "gradualism", as Brazilian diplomats put it. Cardoso says the FTAA must not be a one-way highway: Washington must stop barring some of Brazil's most crucial agricultural exports from the US market, and slapping others with absurd anti-dumping taxes.

The Brazilian strategy is above all to strengthen the Mercosur trade bloc - of which it is the most powerful member (the others are Argentina, Uruguay and Paraguay). Mercosur is already negotiating a trade agreement with the European Union. The EU trades more with Brazil than the US itself. But faced with Brazilian demands, the US may prefer to sign bilateral trade agreements with Brazil's neighbors: it is already negotiating with Chile.

All over Latin America there is a certain consensus that the region's destiny in the 21st century will be determined by the American involvement in Plan Colombia - largely to eradicate narcotics - and the FTAA negotiations. For its critics, the FTAA is nothing but a new-look version of the Monroe Doctrine: already in 1823, President James Monroe had defined the Western Hemisphere as above all an American area to be protected from European interference. Latin American integration under American hegemony would have the added bonus of dispensing with monetary union - European style. Dollarization is already a way of life in many smaller Latin American countries, and is always on the horizon in Argentina.

The main criticism of FTAA is that negotiations are always held in total secrecy, and critics are quick to seize on this. Attac-Quebec, an NGO, insists that for the first time NGOs, unions, church organizations and ecological and parliamentary groups are united in denouncing the lack of transparency of multilateral negotiations.

They are ready to point out the many possible alternatives. According to Brazilian economics professor Emir Sader, "local populations should be able to choose either the current FTAA integration model, or a previous integration of Latin American countries, a step to a broader strategy of diversified international alliances with the US, the European Union, East Asia or other developing counties, such as China, India, Iran and South Africa".

Latin America certainly has eyes for the rest of the world - and not only for the voluptuous Miss America. In their first inter-regional conference three weeks ago in Santiago, Chile, ministers from East Asia and Latin America pledged to strengthen their cooperation. At this first forum for such cooperation, the two regions woke up to the fact that they have a combined population of 2.3 billion people, but their trade was only 2 percent of the global total in 2000. According to S Jayakumar, Singapore's Foreign Minister, increasing exchanges are essential since both regions have the same problems of increasing growth and development.

China - soon to be a full member of the WTO - is also part of the equation. It is a splendid coincidence that just a few days before the FTAAsummit, Chinese President Jiang Zemin - reaping the benefits of his crash course in Spanish - was pressing for a common "strategic vision" challenging US power exactly in its own "backyard". On several occasions - for instance in Chile and Brazil - Jiang said China and Latin America should build together a "new international order" with an emphasis on "multi-polarization". President Cardoso agreed, and asked Jiang's cooperation in building a new order "free of monopolies - on power, resources, knowledge", and "without arrogance and pressure".

If the FTAA is to succeed, the US and other major players have to proceed carefully, and certainly without arrogance and pressure. Insiders insist the process will be more transparent. According to a Brazilian diplomat, "civil society in the 34 countries will be able to make suggestions". To this effect, congressmen from all the countries involved are supposed to deliver a document to the heads of state meeting in Quebec. But it is clear American congressmen will want any agreement to include provisions to protect labor rights and the environment - something considered irrelevant and discriminatory by developing countries.

Nothing of great substance will be decided in Quebec. The arduous FTAA negotiations will go on until January 2005. The agreement itself will only come into effect in December 2005 at the earliest: this was decided by ministers of the 34 countries meeting in Buenos Aires two weeks ago. The US, Canada and Chile wanted 2003. The Mercosur countries pushed for 2005. Diplomats believe the whole mechanism will only really be working in 2015.

A successful Summit of the Americas may breathe new life into the WTO, an organization that elicits "fear, anger and exasperation in the South" - according to one of its fiercest critics, Walden Bello, co-director of Focus on the Global South, a Bangkok-based NGO. Bello remarks that "it was during a period where no bodies supervised aid and development that the countries of Latin America were able to successfully engage in import substitution to build up industrial structures. And it was during the period from the 1960s up to the late 1980s, before the establishment of the WTO, that the NICs of East and Southeast Asia were able to marry domestic protectionism to mercantilism to move from underdevelopment to industrial status in one generation."

The global market today is essentially a market of symbols as far as developed countries are concerned. Their populations want to buy a piece of the place from where a certain product comes, something that is capable of making them dream - either on their table, in their wardrobe, their living room or walking down the street. The FTAA may be good for Brazilian juice, Argentine shoes and Chilean wines. But it may be better for those industries and countries capable of making Americans dream about the best that they have to offer.

((c)2001 Asia Times Online Co, Ltd.

http://atimes.com/global-econ/CD21Dj01.html

-- Martin Thompson (mthom1927@aol.com), April 20, 2001

Answers

Martin, with all due respect, I humbly request that you create another new category entitled simply "world trade." I do believe we need it (the category, that is, no necessarily that other daemon!)

This article opens my eyes to the corporations' requirement of the FTAA--to shut-out the Europeans. Bummer. I always appreciated quality.

-- Rachel Gibson (rgibson@hotmail.com), April 20, 2001.

Be happy to. Will start with this article.

-- Martin Thompson (mthom1927@aol.com), April 20, 2001.

Thanks, Martin. That's "'not' necessarily," of course.

Has anyone else read my favourite part of "The World According to Garp?" (One of the many good parts omitted from the movie.)

-- Rachel Gibson (rgibson@hotmail.com), April 20, 2001.