Economic Justice & Globalization Information
In geopolitics, regional integration has become vogue. The emergence of the “common market” has shifted the processes of world trade. The year 1991 witnessed the marriage of Brazil, Argentina, Uruguay and Paraguay to form South America ‘s MERCOSUR. The partnership of the European Union, in 1992, conceived a massive new global market, and with it, a massive new global competitor. Japan, Australia, India and China now are reconciling their differences forging the Asia-Pacific Economic Cooperation Forum (APEC). In effect, pools of regional trading partners have collected, and continue to conglomerate, around the world in order to compete with the world’s largest market-the United States.
As a part of its response, the US is broadening its trade and investment capacity. The North American Free Trade Agreement (NAFTA), the Central American Free Trade Agreement(CAFTA), the more recent Andean Free Trade Agreement (AFTA) and finally the Free Trade of the Americas Agreement (FTAA) are direct responses to integrated global competition. The strategy: Annex Canada and Central and South America to expand the US ‘s trade zone and lift barriers to investment in order for US resource expansion. Like LegosTM, first construct and lay down the infrastructure-the Plan Pueba-Panama (PPP) and theIntegration of Infrastructure in the Region of South America (IIRSA), and then codify trade and investment treaties-NAFTA, DR-CAFTA, AFTA and FTAA, slowly interlocking the region on the whole.
Such international free trade agreements are engineered by US dominated institutions, such as the World Bank, the Inter-American Development Bank, the International Monetary Fund, along with other International Financial Institutions and Corporations. These bodies, with policies like Structural Adjustment Programs (SAPs), advocate to privatize public entities, exploit natural resources, remove social welfare programs, reduce environmental regulation, diminish worker’s rights, privatize land and exclude indigenous rights, in order to inspire financial flows-foreign direct investment (FDI), portfolio investment and debt flows. In summary, rich counties change (or liberate) fiscal policy in poor countries to allow higher capital fluidity; poor countries then borrow money from rich countries to put in infrastructure-roads, electricity, communications, ports, etc.; afterwards, transnational corporations move companies to the poor countries and build industries.
Despite increased capital investment, the capital retained in “developing” countries is miniscule compared to the capital amassed by “developed” countries. In order to receive investment packages from multilateral financial institutions, poor countries must agree to Structural Adjustment Programs, which knock down impediments to short-term investment and liberate restrictions on venture capital. Afterwards, foreign investment speculators can shift investment relatively easily from one market to the next; venture capitalists are able to quickly liquefy and invest elsewhere in the new global casino, leaving the citizens of the poor country, rather than the foreign businesses, to struggle to repay the swelling debt. Due to the high amount of money owed to multilateral financial institutions, money normally designated for social services in poor countries is cut back to pay down the escalating debt. In most cases, the investors (whom often live abroad in rich countries or comprise of the local wealthy class) accrue massive profits, scattering few scraps to the actual citizens of the countries, thus widening the gap between the rich and the poor.
Free trade advocates often point out the benefits of regional trade in Europe; however, unlike the European Union, these American trade agreements do not increase human rights and environmental protections; instead they propose the opposite by ceding human and environmental rights over to corporations and investors. Here, there is no talk of relinquishing the borders to allow worker mobility like in Europe; in fact, it is just the opposite, limiting labor mobility by increasing border protection.
As regions integrate, global tension rises. The Seattle, Miami, Cancun protests represent civil society’s frustrations with injustices that accompany global trade and international investment mechanisms. Between March of 2002 and 2004, Global Exchange documented 25 civil protests against CAFTA and the PPP alone. In 2002, over 10 million Brazilians voted against the FTAA. In July 2004, San Salvador hosted the largest agglomeration yet with over 700 of Central America’s social organizations in attendance. In November of 2004, over 300,000 people lined the Chilean streets opposing Bush and the bilateral trade agreement between Chile and the United States. The following links detail the LegosTM of the Free Trade Agreement of the Americas:
North American Free Trade Agreement (NAFTA) Information on the enacted trade treaty between the United States, Canada, and Mexico.
Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) Design of the proposed commercial pact between the United States, El Salvador, Guatemala, Nicaragua, Honduras, Costa Rica and the Dominican Republic.
Andean Free Trade Agreement (AFTA) Detail on the signed trade pact between the United States, Peru, Bolivia, and Columbia.
Free Trade Area of the Americas Agreement (FTAA) The structure of the 34 nation plan interconnecting North, Central, and South America and the Caribbean (with the exclusion of Cuba).
Plan Puebla-Panama (PPP) The series of industrial development plans proposed from Mexico through Central America.
Integration of Infrastructure in the Region of South America (IIRSA) The sequence of infrastructure development planned throughout South America .