By Mark Weisbrot
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public . . ." So wrote Adam Smith more than two centuries ago, and it is equally true today.
Quebec City is now host to numerous meetings of these "people of the same trade" - - the businesspeople who have access to the secret text of the "Free Trade Area of the Americas." The fact that the heads of major corporations such as Merck and IBM can read the draft of the agreement, while the press and the public are kept in the dark, speaks volumes about what is being negotiated.
With the enthusiastic support of the Bush administration, leaders of 34 nations are now gathering in Quebec to discuss the FTAA. The name of this treaty is misleading: it is not primarily about "free trade." In fact, this agreement will almost certainly strengthen some of the most expensive, economically wasteful, and (in the case of life-saving pharmaceuticals) deadly forms of protectionism. These are the patents, copyrights, and other monopolies commonly grouped under "intellectual property rights."
While tariffs rarely increase the price of a good by more than 20 or 25 percent, patent protected prices can be ten or twenty times the competitive price. One of the main purposes of these "free trade" agreements is to expand this lucrative form of protectionism across international borders.
Brazil has already run into trouble in the World Trade Organization for its laws dealing with the manufacture and import of generic AIDS drugs. These laws have formed an important part of Brazil's remarkably successful program for treating AIDS. Brazil has provided "triple-therapy" drugs -- the same ones that cost $12,000 a year to treat people here, but can be produced for as little as $500.
Generic AIDS drugs have enabled Brazil to provide treatment to almost all who need it, cutting the death rate from AIDS in half. But Washington is currently challenging Brazil at the WTO, contesting part of the Brazilian law that allows for the manufacture and import of these generic drugs.
Agreements like the FTAA also expand protections for foreign investors, giving them rights that they would not be able to win in their home countries. There was a little-noticed provision in NAFTA that allowed foreign investors to sue governments for regulations that infringed on their potential profits. This has turned out to be an environmental nightmare.
For example, the US- based Ethyl corporation (the one that brought us the lead in leaded gasoline) brought a complaint against the Canadian government in 1997. For public health reasons, Canada had prohibited the import of another potentially dangerous gasoline additive known as MMT.
This additive was effectively banned in the United States. But the fear of losing the NAFTA lawsuit was enough for Canada to repeal its law, and pay $13 million dollars in damages to Ethyl.
Now imagine extending these NAFTA provisions to 31 more countries and you can see why environmental organizations are adamantly opposed to the FTAA. They're not the only ones. Workers in the United States, Canada, and Mexico have now had seven years of experience with NAFTA -- the FTAA's pilot program -- and it hasn't exactly turned out to be the "win-win" deal that they were promised.
For the United States, the main problem has been the loss of relatively better paying manufacturing jobs, and the downward pressure on wages as companies move or threaten to move south. Canada has also lost a good part of its manufacturing sector, and income inequality has worsened significantly. Mexico has seen declining real wages for its workers, as well as falling income for the self-employed (a much larger part of the labor force than it is here).
For Latin America as a whole, the last two decades of "free trade" have been an economic train wreck. Income per person has grown about 7 percent over the last 20 years, as compared with 75 percent in the previous two decades.
In Quebec a "wall of shame" -- as press reports have described it -- was constructed to keep protesters away from the meeting. Three miles of chain link fence and concrete abutments were supposed to compensate for the meetings' lack of legitimacy among the populace.
The WTO and NAFTA are the product of a decades-long effort to rewrite the rules of international commerce in ways that ignore the needs of most of humanity, as well as our natural environment. But humanity is catching up, and has learned some lessons. The misnamed "Free Trade Area of the Americas" will not withstand public scrutiny.
Mark Weisbrot is co-director of the Center for Economic and Policy Research (www.cepr.net) in Washington, DC.
protests cause headaches for trade summit
Democracy Trampled in Quebec City
by Sinclair Stevens
I never thought I'd be writing this article, surely not in Canada.
There aren't many people in this country who view free trade as positively as I do. As industry minister in the Mulroney government, I participated in the 1985 Shamrock Summit that set the stage for our trade agreement with the United States. I was even responsible for replacing the Foreign Investment Review Agency with Investment Canada, a welcome mat for our partners to the South.
There also aren't many people who view the maintenance of law and order as a higher priority than I do.
But this past weekend, I was shocked by events in Quebec City. Shocked by what I saw, and stunned by what my wife, Noreen, and I personally experienced.
I believe Canada is right to view free trade as a model for democratic development in every corner of our hemisphere, and I was delighted to see us host the Summit of the Americas. But our government is dead wrong to behave in a manner that suggests we have forgotten what democracy is all about.
Noreen and I arrived in Quebec City last Friday at about 5 p.m. We had heard about the so-called security fence and wanted to see it firsthand, to walk along beside it. My first view of the fence was in front of the Château Frontenac. It brought back memories of many happy visits to that hotel. But, this weekend, I could not enter: The hotel was inside the fence, I was outside.
As we walked around the perimeter, a 40-year-old chap passed us, and asked: "Where is your gas mask?" I asked what he meant. He said: "There is gas farther on -- watch out." We continued until we saw our first contingent of riot-geared police lined up three deep behind a closed gate. They were an intimidating sight -- in battle dress, with helmets, masks, shields and assorted elaborate weapons. I was glad, this time, that they were inside the fence and we were outside.
Farther on, just before we got to Dufferin Street, there were perhaps 50 people -- protesters, it turned out -- who were standing or sitting on a small side road. At the end of the road, we saw a much larger group of riot police standing shoulder-to-shoulder, several rows deep. The road was well away from the security fence. In fact, the fence was nowhere in sight.
I spoke with many of the people in the street, asked them why they had gathered, why they opposed the free trade proposals. It was a lively but friendly exchange.
We were interrupted as the police down the road began an eerie drumming, rattling their riot sticks against their shields. Slowly, in unison, one six-inch step at a time, they began marching toward us. Noreen and I moved to the side of the street, as the protesters remained stationary. Some formed V signs with their fingers.
To my horror, the police then fired tear gas canisters directly at those sitting or standing on the road.
As clouds of gas began to spread, Noreen and I felt our eyes sting and our throats bake. We pulled whatever clothing we could across our mouths. One young woman, who had been among the protesters, offered us some vinegar. "What's that for?" I asked. "It takes away the sting," she said. And it did help.
The police, however, kept advancing. One large policeman with the number 5905 on his helmet, pressed right against me and ordered me to get behind a railing. "I haven't done anything," I protested. "Why?" He simply replied: "Get behind the rail." Then he added, "and get down." I did so.
I shook my head. I never thought I would ever see this kind of police-state tactic in Canada. What we witnessed that night was mild compared to events the next afternoon.
This time, walked along the fence until we reached the gate at René Lévesque Boulevard, where a great crowd had gathered that included TV cameras and reporters. I was asked for an interview by a CBC crew but, before we could begin, dozens of tear gas canisters were fired, water cannons were sprayed and rubber bullets began to hit people nearby. Three times, I felt could not breathe, my eyes were sore and all I could do was run. In the bedlam, my wife and I were separated for almost three hours. She said she had almost passed out from the gassing.
We lost something else, besides each other, last weekend in Quebec: our innocence. This government, and some reporters, like to brand the Quebec City demonstrators as "hooligans." That is not fair. I talked to dozens of them, mostly university students, aged about 20. They came to Quebec, not to have "a good time," as some suggest, but to express their well-thought-out views on a subject that is important to them, to all of us.
I may not have agreed with their position, but I sure believe in their right to express it. The police had no cause to violently suppress it.
Some will say that a handful of demonstrators got out of hand and forced the police to take collective action. I can't agree. The police action in Quebec City, under orders from our government, was a provocation itself -- an assault on all our freedoms.
Sinclair Stevens, minister of regional industrial expansion under Brian Mulroney, was an MP from 1972 to 1988.
Copyright 2001 Globe Interactive
Emanzipation Humanum, version 04. 2001, criticism, suggestions as to form and content, dialogue, translation into other languages are all desired