NAFTA, the free trade agreement among Mexico, the US, and Canada is nine
and a half years old. CAFTA (the Central America Free Trade Agreement) is
basically a proposed expansion of NAFTA to Central America; FTAA (the Free Trade
Agreement of the Americas), if it comes into existence, will further extend
free trade to cover the entire Western Hemisphere, except Cuba. CAFTA is
expected to be signed by 2004, and the FTAA by 2005.

To predict the effects of these two future agreements, experts look at
what NAFTA has done. Members of the “elite” and corporations have greatly
benefited, while poor and working people have been harmed.

The US promised that NAFTA would bring economic development and
prosperity to Mexico and its NAFTA trading partners. It did bring foreign investment
to Mexico - mostly by US firms relocating production to maquillas. Firms were
lured by low wages, poor and/or unenforced labor laws, difficulty for workers
to organize unions, and incentives offered by the Mexican government which
include almost total exemption from taxes.

NAFTA created jobs in Mexico, but what kind of jobs? Where did the new
jobs come from? Where did the workers to fill these new jobs come from?

Thousands of workers in the US lost production jobs because of NAFTA.
Thousands of Mexicans were forced out of agricultural jobs by competition from
US-grown farm products.

Free trade rewards efficiency. No small farmer, Mexican or American can
compete with US “factory farms” or large-scale farming like that in the
endless fields of Canada and the US. Small farmers and their lifestyles are now
rapidly disappearing; Cargill and other large agro-business corporations are
growing just as fast. Similarly, no privately owned small business can compete
with the mass retailers such as Wal-Mart or the cheaper goods being imported
from the maquillas of Mexico.

Mexican farmers have another barrier to competition. The US subsidizes
some agricultural products, allowing them to be sold in Mexico below cost.
Agricultural quotas and subsidies are currently an issue of great contention at
ongoing World Trade Organization (WTO) negotiations, and, almost certainly, at
CAFTA and FTAA negotiations as well.

But that is not all. Along the Mexican side of the border with the US,
where the majority of maquillas are, environmental standards are few. Local
governments are not receiving increased tax revenues from the huge influx of
maquillas and thousands of poor peasants now forced to look for work. Local
government cannot provide them the needed services, such as potable water, sewers,
and health care. The border area is a cesspool and water-borne diseases are
rampant.

There are also less-visible effects of NAFTA.

Intellectual Property Rights would extend patents so that their holders
can become monopolies able to dictate prices. Large drug corporations such as
Merck would prosper, while small producers of less expensive generics would
lose business. As we’ve seen with HIV/AIDs medications, expensive drugs would
not be available to the poor. Patents are available on seeds which farmers
have used for generations, on traditional medicines of indigenous people, and on
genes unique to certain populations! If the Intellectual Property Rights
provision is agreed to, under-developed countries will be dependent on those with
more advanced technology.

The definition of “investment” would be expanded to include anything
that can be given a monetary value such as forests, oil fields, and healthcare
systems, making them available to foreign investors on the “free market,”.
Already, European and US corporations are buying up local water and telephone
systems to run on a for-profit basis. So far, sales of public services have led
to massive layoffs of government workers and higher prices for consumers.

The treaties would require that foreign corporations and investors
receive “National Treatment,” that is that they be treated at least as well as
domestic investors and corporations.”

Other provisions would give corporations the right to sue governments on
the national and local levels for anticipated profits lost when labor,
environmental, or other democratically-enacted laws or regulations impact their
businesses. Several high-profile WTO cases have highlighted this provision:
dolphin-free tuna rules, protection of sea turtles, and the endless wrangling about
allowing Mexican trucks onto US highways without safety inspections. The
suit is heard before a panel of trade experts and may result in large fines for
the defendant government and the law or regulation in question being
overturned.

Another section of these two treaties may include a ban on “Performance
Requirements,” such as local purchasing laws, laws requiring a portion of a
foreign company’s profits to remain in the country, and laws requiring the use of
local workers and materials.

Still another would lessen the control that governments can have over the
enormous amounts of money that move from one country to another at the speed
of cyberspace. Ninety percent of these transactions are speculative, don’t produce
anything except profit for their owners, and have caused financial panics like the
1994-95 Mexican “Peso Crisis.”

Perhaps worst of all, no one knows with certainty what the final terms
will be. Negotiations for CAFTA and FTAA are held behind closed doors. Only
certain government officials and the corporate executives with whom they
consult know for sure what the terms of these agreements will be. No one in
Congress has ever seen a draft of either one. Some of the expected provisions in
CAFTA and the FTAA are in the World Trade Agreement (WTO) rather than NAFTA, but
trade experts expect them to be included. The terms, whatever they may be,
will affect the lives of the millions of people living in this Hemisphere.
Almost certainly, they will permanently alter the world as we know it. And,
because Congress granted Fast-Track power (Trade Promotion Authority) to the
president, CAFTA and the FTAA will be voted on in Congress after only very
limited discussion and without amendments. Which of our legislators and their
aides will have even read them before voting?

Write to your Senators, make it easier for them to make up their minds.
about these treaties. Tell them that poverty in Mexico is higher than before
NAFTA, that those of the US workers who lost jobs in production and have been
able to find new jobs, are in lower-paying and generally dead-end ones. Higher
GDPs do not necessarily reflect better lives for the majority of people
actually producing the goods which the GDP counts. Your voice may be the only one
your Senators hear besides those of members of the Administration and corporate
lobbyists.