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January 1, 2004

Council mulls impact of free trade pact

Jeremy Schwab

The trade ministers from every country in the Americas besides Cuba have attracted scant attention as they create a Free Trade Area of the Americas.

But earlier this month, the Boston City Council decided to shine a spotlight on the treaty, worried that it could negatively impact city labor and environmental standards.

“It seems to me our government is chipping away at workers’ rights and labor agreements fought for over the past one hundred years,” said Councilor Michael Ross during a public hearing he sponsored on the FTAA.

Ross expressed concern that the city’s living wage ordinance, which sets the minimum wage for city workers at $10.96 an hour, could be struck down under the treaty.

Many effects of the sweeping changes to international trade proposed under the treaty are unclear, however.

The FTAA as currently formulated would allow a corporation to sue any member nation’s government on the grounds that the government’s environmental or labor regulations unfairly impede the corporation’s pursuit of profit, according to activists who oppose the treaty.

The FTAA would reduce a sovereign nation’s ability to subsidize its own industries, granting foreign corporations equal access to private markets.

“It essentially lowers the playing field for whatever country has lower labor and environmental standards,” testified political consultant Paul Simmons.

Opponents of the treaty worry that corporations from so-called “developed” countries like the United States and Canada would come to dominate in poorer countries whose industries cannot compete on a level playing field with huge multinationals.

“The history of international commerce has not been one of free trade,” testified UMass economics professor Arthur MacEwan before the city council. “It has been a history of government regulation of international commerce. Free trade has not been the basis of past success.”

But the councilors called the hearing mainly to investigate the local effects the treaty might have. A high-ranking U.S. trade official wrote to City Council Labor Committee Chairman Stephen Murphy to reassure him that the FTAA would not have sweeping negative effects in the United States.

“There is nothing being proposed in the FTAA that would overturn legitimate employment and labor, zoning or environmental regulations,” wrote Assistant United States Trade Representative William Clatanoff in a letter to Boston City Council Labor Committee Chairman Stephen Murphy. “In our free trade agreements, we expressly reserve the right to adopt or maintain certain types of measures taken for a public purpose including, e.g. social welfare, public education, health, and child care.”

Anti-FTAA activists warn that the FTAA would weaken the bargaining position of laborers in this country and abroad because it would speed up the ongoing process of corporations relocating factories and other industries to cheaper labor markets.

Many of the arguments against the FTAA, however, are based on sympathy for workers in less developed countries rather than on fear of damage to the U.S. economy or workforce.

Opponents of the treaty note that the push for the FTAA is coming from big business, which wants to further open up markets in foreign countries. Similar pushes in the past have led to practices which history has judged to be cruel.

“International commerce can be a wonderful thing, and our trade with other parts of the world brings us a flow of goods,” said MacEwan. “But in the nineteenth century, international trade was associated with colonialism, plunder and in a key aspect slavery.”

Liberal City Councilor Chuck Turner denounced the FTAA. He blamed the U.S. labor movement for allowing big business to gain such leverage that it can push through free trade agreements.

“If the American labor movement were committed to worldwide labor solidarity, we would not be in this situation,” he said. “The fact is that the labor movement seems to be branching away from its collaboration with corporations because it is seeing the effects of [the North American Free Trade Agreement].”

Many U.S. manufacturers have relocated to Mexico under NAFTA.

Opponents of the FTAA complain that the free trade treaty is being negotiated in an undemocratic process.

President George W. Bush has said he would “fast-track” free trade legislation, giving Congress just 60 days to pass or turn down trade treaties and giving the House and Senate only 20 hours to debate the treaties.

The fast-track process would forbid legislators from examining and proposing changes to the treaties in committees.

 

 

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