11 November 2007

It Isn't Free-Trade At All

I admit that I can swing wildly back-and-forth concerning my faith and confidence in the American political system. There are days when I consider all the ways we can attempt to bring about change—and that list is extensive. Our freedoms allow us access to the process through an impressive variety of methods. And when my students ask me if one, solitary individual can make a difference in this country—I most often say yes.

But then there are my dark and pessimistic days—and they are becoming more frequent. These are the times when I am convinced, based upon logic and evidence, that money and power provide the only means to political influence. Yes, we can vote, blog, pass out campaign literature, and write to our representatives…..but on the major economic and social issues, those with money will always pervert the system and get what they want. Think health care, Iraq, and a variety of issues where we know that corporate interests are able to impede the will of the majority.

These two demons battle constantly in the political section of my consciousness. But then once-in-while the fight momentarily ceases as something sends me over the edge. This week it was the egregious and criminal Peru Free Trade Agreement. If it isn’t obvious to the American public that corporate and Wall Street interests bought the passage of this legislation—then nothing is obvious in this corrupt political system.

There are two broad issues that particularly bother me. First, the opponents of the Peru FTA are from groups or interests that lack clear and immediate political power in the United States. Many of these organizations work for global change--environmental groups, unions, small manufacturers, the progressive religious community, and the poor. Yes, if these groups coordinated their efforts, they might be more successful. But for the most part, none of them register high in the political polls. And few of these organizations are swimming in money.

And the supporters of this legislation—take a guess: Wall Street; the globalization crowd, the capitalist classes, and big, big money campaign contributors. These interests are seeking to basically commandeer the Peruvian economy, institute austerity and free-market solutions, and make millions off the suffering of others. And they will get their way. Just to show you the kinds of people we are dealing with—read about one of the following perks these modern day Robber Barons will gain when the Peru FTA passes:

In 2006, the Bush administration negotiated a NAFTA expansion pact with the Latin American country of Peru containing obscure provisions that would chill efforts to reverse the failed privatization of Peru’s social security system. These “free trade agreement” (FTA) terms would seem to only benefit one U.S. firm, Citibank, which is the largest shareholder in ProFuturo AFP, one of the private retirement account providers authorized to compete against the Peruvian government’s public social security system as part of the privatization. Other U.S. firms could also gain rights to service the privatized social security system under the Peru FTA terms, as noted by the Bush administration’s Industry Trade Advisory Committee on Services and Finance Industries, who hope to use the Peru FTA as a precedent for expanding the reach of privatized social security systems internationally: “Negotiators for the United States and Peru are to be commended for the substantive and meaningful provisions included on pensions and asset management… U.S. portfolio managers will be able to provide asset management services… including funds that manage Peru’s privatized social security accounts”

In simplest terms, the problem involves provisions of the Peru FTA that empower foreign investors to demand compensation in United Nations (UN) and World Bank tribunals for government actions that undermine their expected future profits as an investor in Peru. Under these terms, if Peru reversed its privatization, Citibank could use the FTA to seek Peruvian government compensation for its loss of future revenue caused by the “nationalization” of its investment in providing private retirement accounts. The FTA has an exception that would forbid the U.S. government from suing in an FTA tribunal for the loss of financial service market access in private retirement accounts if the privatization were reversed. Thus, while the FTA has safeguards for Peru’s legal right to reverse the privatization, the FTA undermines Peru’s practical ability to exercise those legal rights. This is the case because if Peru acted to exercise its rights to terminate market access in private retirement accounts, it could be confronted with foreign investor demands for major compensation.

The amount that Citibank could demand could be considerable, as the right to provide the private accounts is not time-limited and, under the statute establishing the privatization, licenses can only be removed for cause. Peruvian labor and other civil society figures say that the Peru FTA provisions would severely chill their ability to win reversal of the privatization, because the government could not afford to pay a huge fine for the right to restore a public service.

It is clear that these agreements are not about trade, they are about forcing global capitalism on weak economies and then leaving the “people/voters” with few options.

The second point that saddens me is that American politicians are cynical enough to understand that what happens to the people of Peru will gain them no votes. The hell with the Peruvians: the poor, small farmers and businesses—that isn’t something that registers on Washington's sophisticated polling data. But so-called free trade, cheap imports, and corporate contributions…….those terms awaken the senses of our politicians. Will we ever do the right thing and start considering ourselves citizens of the world? Will we ever care for the people of Peru, or Iraq? I am not hopeful.

This agreement clearly will benefit the rich and powerful in both countries. And because they stand to gain so much—they have “legally” worked the system and purchased enough votes to get their way. Poverty will be exacerbated in Peru, farmers will lose their land and be forced to move into crowded cities, and unions will cede power and influence. But of course the wonderful and enchanting hand of the “free-market” will engulf Peru and make it a better place!

In the United States—the few small farmers who remain will be forced out of business, and we might be able to purchase few cheaper goods. But at what price? The agreements that the Bush administration claims to have made on the environment and labor issues will not be followed, and few will try to force it because it will bring no political gains.

The Democrats in the House voted against this measure—barely! Nancy Pelosi and other party leaders were afraid (they are always afraid of something aren’t they?) they would be labeled as the anti-trade party? But this is no reason to screw the people who are supposed to be the heart and soul of the Democratic Party. As the Nation wrote, the worry about being labeled anti-free trade is:

…the same simple-minded non sequitur the multinational establishment always invoke to scold Democrats. None of the Democratic dissenters are arguing for "no trade. They are trying to change the rules of trade so US workers are not the first victims of new agreements. Pelosi argued that the Peru agreement includes an important reform—stronger language in support of labor and environmental standards—and it does. But is there perhaps another reason why she pushed so hard against her own caucus?

Steven R.Weisman of the New York Times gently suggested one."Democrats from the prosperous areas of the East and West Coast have become especially responsive, many Democrats say, to the desire of Wall Street and the high technology, health, pharmaceutical and entertainment industries to expand their sales overseas," Weisman wrote. "These industries have also become major Democratic contributors."

She did it for the money. That is a more plausible explanation than insider arguments over the fine print in an inconsequential new trade bill. The big-money sectors are anxious to squelch the new critics of globalization in Democratic ranks before they can gain momentum in Congress. Looking toward financing the 2008 elections, Pelosi chose to stand with the money guys and dismiss the political backlash against globalization building across the country. She is probably betting people aren't paying attention to such trivial matters.

Many of us are paying attention, however. When the Peru FTA comes before the Senate this month, Barack Obama and Hillary Clinton will be voting yes. John Edwards and Dennis Kucinich have come out against the measure—Kucinich in especially strong terms.

I urge everyone to help renew my faith in the American political system by doing something to try and stop this from passing in the U.S. Senate—write, call, cajole your Senators—especially the Democrats. You can also write a letter to your local newspaper and explain to people who might not be following, what this is really about.

Call the U.S. Capitol at (202) 224-3121 and ask to be connected to your Senator; tell them you think these NAFTA-style "free trade" agreements are a bad idea--tell them to vote against this legislation. And I bet Minnesota Democratic U.S. Senator Amy Klobuchar is "on the fence" on this issue--contact her soon!

Here are some additional websites with "talking points" and even a link to email Washington

http://action.citizen.org/campaign.jsp?campaign_KEY=12561 (send an email message)

http://action.citizen.org/campaign.jsp?campaign_KEY=2535 (some talking points)

http://www.equalexchange.com/media/actionalerts/OxfamPeruFTALetterToCongress9-17-07.pdf (Oxfam letter opposing the agreement)


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