Profits Over People: The FTAA’s Negative Impacts on the People of the Western Hemisphere


Recently, the leaders of thirty-four nations in the Americas, representing every country except Cuba, gathered to discuss the Free Trade Area of the Americas (FTAA), a proposed trade agreement encompassing 800 million people and eleven trillion dollars (Handelman, 24). However, they were not alone. They were joined a few miles away by more than 20,000 people protesting against the pact, and with good reason. If the North American Free Trade Agreement (NAFTA), the FTAA’s predecessor, is anything to judge by, the agreement will deal a severe blow to the hard-won gains of the world’s activists. Unremarkably, the leaders involved in the negotiations claim that the FTAA will alleviate the societal ills of poverty, human rights abuses, and environmental destruction. In fact, the FTAA amounts to nothing more than a corporate Magna Charta allowing multinational companies to trample on democratic, labour, human, and environmental rights in their pursuit of profit.

Despite the inclusion of a “democracy clause,” one that bars non-democratic nations from the agreement, the FTAA is the most potent adversary of democratic rule. In a functioning republic, voters elect their representatives to a legislative body where bills are passed or defeated, depending on the interests of the majority. According to the FTAA though, the needs of corporations supersede the rights of populations. Like NAFTA, the FTAA includes an “investors’ rights” chapter allowing foreign investors to directly sue domestic governments for any practices that the investors perceive to be economically unfair (Camp, “Corporate wealth”). In a classic example, the American firm Metalclad sued municipal and state governments in Mexico because the governments attempted to stop the company from creating a toxic waste disposal site that was certain to contaminate potable water and cause other serious environmental harm. Using legislative powers, the city and state governments declared the area an ecological reserve, preventing Metalclad from dumping its hazardous wastes in the small municipality (Klein,Democracy). Metalclad sued under Chapter 11 of NAFTA and was awarded $16.7 million of the ninety million it asked for by a three-person arbitration panel in Washington, DC. Mexico is now appealing the case before the British Columbia Supreme Court using a rare third-party system (Klein,Democracy).

In a case closer to home, in 1997 the US-based Ethyl Corporation, famous for putting the lead in leaded gasoline, sued the Canadian government for placing a ban on MMT, a gasoline additive that poses significant public health risks. Forking out thirteen million dollars, the Canadian government “settled ‘out of court’ to prevent a public spectacle of a corporation overruling the nation’s Parliament” (Camp, “Corporate wealth”). Clearly, the architects of the FTAA have not gone out of their way to strengthen democracy.

Nor have they bothered to address the plight of the poor. In spite of noble claims made by the American, Canadian, and Mexican heads of government, the FTAA will only exacerbate the situations of the destitute by increasing the rate at which wealth is transferred from the bottom upward. To illustrate a current global disparity, “three men – Bill Gates, his fellow Microsoft founder Paul Allen and rentier extraordinaire Warren Buffet – now own assets equivalent to those owned by the six-hundred million people in the world’s forty-eight least developed countries…” (Healy,Is Globalisation Inevitable?). Similarly, when NAFTA was introduced in 1994, forty-seven percent of the Mexican population lived in poverty. By 1997, the marvels of free trade had pushed that figure up to fifty-one percent (Committees of Correspondence,Trade Agreement). Furthermore, while politicians and economists alike relish in pointing out that US investment in Mexico has doubled since 1994, they conveniently forget to mention that over fifty percent of that foreign “investment” comes in the form of job-eliminating corporate mergers (Committees of Correspondence,Trade Agreement).

Likewise, according to the Canadian Centre for Policy Alternatives, Canada experienced a net loss of 276,000 jobs in the first triennium of Brian Mulroney’s precious NAFTA (Klein, “Lies and statistics”). Latin America has fared even worse; between 1960-1980, per capita income grew by seventy-three percent. Since the 1980 introduction of neoliberal “reforms,” the ones furthered by the FTAA, growth has “come to a virtual halt, growing by less than six percent over twenty years…” (Plast, “Inside corporate America”). Meanwhile, corporate profits have achieved unreal levels, about ten percent in 1997 (Committees of Correspondence, Trade Agreement).

Yet because a net profit of $1.93 billion, in the case of pharmaceutical giant Pfizer, is not sufficient, the FTAA must innovate other ways of exploiting the poor to benefit the rich (Yahoo!,Market Guide – Pfizer Inc.). For instance, a Brazilian law that allows for the manufacture of generic AIDS drugs has been remarkably successful in providing treatment to almost all who need it. By providing drugs that cost $12,000 in the United States for five-hundred dollars, Brazil has cut the AIDS mortality rate in half (Weisbrot, “Free trade”). However, the US has made it clear that under the FTAA, pharmaceuticals and hundreds of other products will be protected from free trade through “intellectual property rights.” In other words, millions of people can look forward to dying a little sooner because corporate America needs a little more money. Agreements like the FTAA do not help people; they help profits.

They also help to accelerate the destruction of our environment. According to the Sierra Club, total pollution in Mexico has doubled since the implementation of NAFTA, and Metalclad and Ethyl typify the spirit with which environmental protection is being pursued (Klein, “Lies and statistics”). Incidentally, the Bush Administration has dumped the Kyoto Agreement, the only viable treaty aimed at reducing carbon dioxide emissions, in the name of boosting the US economy. Were the environment of real concern to the policy setters, they would have included an “environment clause” in the FTAA stipulating certain standards for protection of the environment. Contrarily, they have decided to forego the inconvenience, forgetting about the tree farms in British Columbia and the remainder of the Amazon in the process. As for Canada, all the equipment required to divert water to the US has already been set up; the nation’s supposedly prized environment will soon face further harm. With water becoming a commodity, as it was in Cochabamba, Bolivia until the government responded to indigenous protests and rescinded the IMF-ordered “reform,” it should be ridiculously obvious that free trade cares not for the protection of the environment but for multinational conglomerates like Bechtel, the company that controlled Cochabamba’s water (Klein, “Lies and statistics”).

The leaders of the FTAA boast of their lofty intentions of solidifying democracy and helping the masses while composing an article that spells misery for most of the hemisphere’s 800 million people. They further claim that if opponents of the proposal harboured legitimate concerns, they would be sitting at the negotiating table instead of rallying outside with signs, which is ironic when one considers the exclusion of all democratic, labour, human rights, and environmental movements from the meetings and the concrete fence surrounding the meeting buildings. As Mark Weisbrot, co-director of the Centre for Economic and Policy Research in Washington, D.C., puts it, “Three miles of chain-link fence and concrete abutments were supposed to compensate for the meetings’ lack of legitimacy among the populace” (Weisbrot, “Free trade”). According to Prime Minister Jean Chretien, the thousands opposed to the FTAA arrived in Quebec City to “protest and blah blah blah.” If advocating democratic rule that enables fair government, labour standards that allow for a decent living, human rights that let people survive, and environmental standards that preserve the planet constitute “blah blah blah,” then Chretien is the most eloquent of statesmen.

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