This document reflects an ongoing, collaborative process to establish concrete and viable alternatives, based on the interests of the peoples of our hemisphere, to the Free Trade Area of the Americas (FTAA). It is the second draft of a document initially prepared for the April 1998 Peoples Summit of the Americas-a historic gathering of activists determined to change the prevailing approach to trade and investment policy in the Western Hemisphere.
This is a working document, designed to stimulate further debate and education on an alternative vision. The paper focuses on positive proposals, while dealing only implicitly with the impact of "neo-liberalism" and free trade agreements on our countries. At this stage of the struggle, it is not enough to oppose, to resist and to criticize. We must build a proposal of our own and fight for it.
The document addresses the major topics on the official agenda of the FTAA negotiators (investment, finance, intellectual property rights, agriculture, market access and dispute resolution), as well as topics that are of extreme social importance but which governments have ignored (human rights, environment, labor, immigration, the role of the state, and energy). Issues concerning two other important groups-women and indigenous peoples-have been incorporated throughout the document. The paper begins with a chapter on the general principles underlying an alternative vision, followed by chapters that lay out more concrete proposals. The topics and chapters are complementary. Therefore, the paper is to be viewed, studied and discussed as a whole.
The first draft of this paper was prepared for the Summit of the Peoples of the Americas, held in April 1998 in Santiago, Chile, in the days preceding the Summit for heads of state (see preface for more details). Six national organizations took on the responsibility of organizing a Forum on Social and Economic Alternatives within the Peoples' Summit. These were the Centro de Estudios sobre Transnacionalización, Economía y Sociedad (Chile), Common Frontiers (Canada), Development GAP-Alliance for Responsible Trade (United States), Instituto Brasileiro de Analise Social e Econômica (IBASE-Brazil), Red Mexicana de Acción Frente al Libre Comercio (RMALC-Mexico), and the Réseau québécois sur l'intégration continentale (RQIC-Quebec).
These organizations approached several well known researchers who have developed their understanding of globalization over many years and who have strong links to social movements. Other specialists were asked to provide suggestions for changes or additions. In all, more than 30 people from eight nations contributed to the first draft. At the Forum on Social and Economic Alternatives for the Americas at the Peoples Summit, about 200 people discussed the first draft and developed some consensus on the general guidelines for this proposal. It was decided, however, to continue to build on the draft by incorporating points raised during this and other fora of the Peoples' Summit, as well as incorporating new suggestions and contributions. Therefore, in addition to reviewing the minutes of those meetings, direct contact was made with some of the people and organizations most involved with each forum. This second draft of the working paper incorporates that input.
Each chapter reflects the level of discussion that took place on that topic at the Summit's fora and within organizations around the continent. This explains why there is a wide range of depth and breadth of the proposals. The paper brings together the points seen as viable and on which there is broad consensus. The focus has been on laying the basis for an inclusive alliance. Hence, these proposals are not built on specific ideologies or political positions. The document also takes into account the diversity of our societies and presents a set of proposals that are flexible enough to deal with the full range of national conditions and interests. The paper is a "living"document, offered for your consideration with the hope that continuing discussions will enrich the next draft, reflecting higher levels of consensus toward a people's alternative for the Americas.
On April 15-18, 1998, about 1,000 men and women from nearly every nation of the hemisphere gathered for a Peoples Summit of the Americas in Santiago, Chile. We gathered to express our collective rejection of the dominant "neo-liberal" agenda that promotes trade and investment liberalization, deregulation, privatization, and market-driven economics as the formula for development. The Peoples Summit focused on building a hemispheric social alliance around concrete, viable alternatives. Meanwhile, the Presidents and Prime Ministers of our nations were also meeting in Santiago, attempting to negotiate a Free Trade Area of the Americas (FTAA). It is expected that the FTAA will follow the pattern of existing agreements like NAFTA and expand neo-liberalism throughout the hemisphere. This document expresses our determination to construct an alternative to the FTAA based on the proposals described herein.
Driving this effort on alternatives is the sense that the neo-liberal economic model has been a disaster for most of the peoples of the hemisphere.
Neo-liberal rules to deregulate capital markets, combined with new telecommunications technologies, have opened our nations to the vagaries of hot money. Speculators pull their money in and out of our nations at will, leaving misery in their wake as usurious interest rates and currency devaluations slash the buying power of our wages and drastically reduce opportunities for livable wage work.
The birth of neo-liberalism in our hemisphere came out of the bloody, U.S.-backed coup in Chile that put General Augusto Pinochet in power. In the wake of that coup, Pinochet invited U.S. economists from the University of Chicago to impose rules on Chilean development that were in line with the interests of those who financed the coup. Pinochet used state-sanctioned terror to make those rules stick. A quarter of a century later, U.S. President Clinton came to Santiago for the launching of FTAA negotiations and proclaimed Chile to be "the model for the hemisphere." His praise reveals the intent of the most powerful government of the Americas to use the FTAA to promote the most extreme form of neo-liberalism. By contrast, Luis Anderson, President of the Interamerican Regional Workers' Organization (ORIT), stated at the Peoples Summit the very next day, "when young children must come and beg for food we must be clear that Chile is no model."
Neo-liberalism entails the imposition of a set of rules that govern not only the economy but also the social fabric of our societies. The issue for us, therefore, is not one of free trade vs. protection or integration vs. isolation, but whose rules will prevail and who will benefit from those rules.
The Peoples' Summit in Santiago brought to the light of day the fact that there is a rising movement of resistance. This movement is one of the peoples of the Americas telling those political leaders, financial speculators and the transnational corporations who promote neo-liberalism that their agenda is unacceptable. It is a movement of the peoples of the Americas demanding their very humanity. They do so by stating that nutritious food, a comfortable place to live, a clean and healthy environment, health care and education are human rights. And they declare that respect for the rights of workers, women, indigenous peoples, black peoples, and Latinos living in the U.S. and Canada must be central to any process of integration.
Supporters of neo-liberalism are attempting to counter the resistance of the peoples of the Americas in a number of ways. In the United States, corporate giants have launched a massive propaganda campaign to "educate" the public on the benefits of free trade. In many countries, an extreme response has been to utilize the nation state as an instrument of terror against its own peoples - a return to neo-liberalism's birth in Pinochet's bloody dictatorship. Under the guise of a "war against drugs," counter-insurgency efforts, often fueled by U.S. funds, training and military hardware, have become a plague in our hemisphere. Furthermore, the suppression of the popular movements throughout Mexico, Central and South America attempts to limit the demands of the peoples of our nations. At times, this suppression has taken the form of brutal terrorism, such as the Acteal massacre in Mexico, the assassination of thousands of Colombian union and popular-sector leaders over the past several years, and the savage assassination of Bishop Gerardi of Guatemala. Although our leaders publicly condemn this violence, we wonder if they might be secretly breathing a sign of relief because these abominable acts serve to silence those who have and will continue to challenge neo-liberalism's onslaught.
While transnational corporations, speculators and their government sponsors will continue to act in their self-interests, we now are beginning to unite across borders and across sectors in order to oppose these self-interests with those of the vast majority of the residents of our hemisphere. While the building of such a social alliance is in its early stages, this urgent task has begun.
History teaches many things. One lesson can be found in the words of the great African-American emancipator, Frederick Douglass,
Another lesson of history is that no amount of oppression can stop people from declaring their own humanity and acting on that declaration.
The Summit of the Peoples of the Americas did not stop with the negation of the neo-liberal rules; it began a dialogue about alternatives. This document, a product of the dialogue, is thus rooted in the aspirations of the peoples of our hemisphere to live and develop as full human beings. These aspirations to build a more egalitarian and respectful society throughout the hemisphere transcend national boundaries and have a long historical tradition in the Americas. They go back at least as far as the struggles to create free and independent countries in the American hemisphere. Almost two centuries ago Simón Bolivar, who led the movement to liberate a large part of South America from colonialism, declared:
("I wish, more than anything else, to witness the creation in America of the greatest nation in the world, not so much because of its immense territory or wealth, but rather because of its freedom and glory.")
Alternatives for the Americas is not solely an economic doctrine, but is rather an approach to social integration through which the ideas, talents and wealth of all of our peoples can be shared to our mutual benefit. It is a living document that will be altered and expanded as we exercise our rights to continue the debate and discussion.
No country can nor should remain isolated from the global economy. This does not mean, however, that the current "neo-liberal" or free market approach to globalization is the only, much less the best, form of economic integration.
This dominant free market approach (embodied in the North American Free Trade Agreement, large multinational corporations' negotiating agenda for the Free Trade Area of the Americas, and the temporarily stalled Multilateral Agreement on Investment) argues that the global market on its own will allocate and develop the best possibilities for each country. Thus, free trade does not simply involve opening ourselves to global trade; it also entails renouncing our role as active subjects in determining our future, and instead allowing the market to decide the future for us. According to this view, it is unnecessary for us to envision the kind of society we want to be or could be. We only need to eliminate all obstacles to global trade, and the market itself will take on the task of offering us the best of all possible worlds.
The difference between this dominant approach and the alternative vision presented in this document lies not in whether we accept the opening of our economies to trade. The two fundamental differences are the following: 1) whether to have a national plan we can fight for or let the market determine the plan, and 2) whether capital, especially speculative capital, should be subject to international regulation. The recent trend has been to allow all capital, even speculative capital, free rein, and let the world follow capital's interests. We argue that history has demonstrated that the market on its own does not generate development, let alone social justice. In contrast, we propose a world economy regulated at the national and supra-national levels in the interest of peace, democracy, sustainable development and economic stability.
Our position in this regard is very clear: we cannot remain on the sidelines but must claim our role as valid stakeholders in the globalization dialogue. We must refuse to accept the current neo-liberal form of globalization as irreversible. We must not only reduce its negative consequences, but put forward a positive alternative.
We must find ways to take creative advantage of globalization and not passively submit to it. As citizens of the Americas, we refuse to be ruled by the law of supply and demand and claim our role as individuals rather than simple commodities governed by the laws of the market.
Free trade has produced social
and economic exclusion. This has resulted in the creation of a social stratum
of citizens devalued by the current economic system and the societies that support
it. Exclusion renders people unable to enter or re-enter the economic circuit,
leading to a process of social "disqualification" and the loss of active citizenship.
Anyone who has felt the negative effects of the transition to free trade, has
become chronically unemployed, or whose job is precarious, lives and knows this
e are not opposed to the establishment of rules for regional or international trade and investment. Nor does our criticism of the dominant, externally imposed form of globalization imply a wish to return to the past, to close our economies and establish protectionist barriers, or to press for isolationist trade policies. But the current rules have not helped our countries overcome, nor even reduce, our economic problems. We propose alternative rules to regulate the global and hemispheric economies based on a different economic logic: that trade and investment should not be ends in themselves, but rather the instruments for achieving just and sustainable development. Our proposal also promotes a social logic that includes areas such as labor, human rights, gender equity, the environment, and minorities-that is, previously excluded issues and people.
While our critique and proposal have a technical basis, they also spring from an ethical imperative. We refuse to accept the market as a god which controls our lives. We do not accept the inevitability of a model of globalization which excludes half or more of the world's population from the benefits of development. We do not accept that environmental degradation is the inevitable and necessary evil accompanying growth.
A profound ethical imperative pushes us to propose our own model of society, one supported by the many men and women united in hope for a more just and humane society for themselves and future generations.
Debates, decision making, and framework building in matters of economic integration have mostly been dominated by financial, corporate, and political elites. Greater democratization in trade and investment decision making must be introduced. International agreements should be ratified by citizens through direct consultation, for example, through plebiscite or national referendum.
The democratization of debates and decision making is a necessary precondition, but not sufficient in itself for the development of new just and sustainable rules on investment, environment, and labor. Citizens must not only approve economic and social policies, but also participate in their formulation, implementation, and evaluation. Furthermore, they must be able to change or modify these policy directions. In order to realize this goal, it may be necessary to implement special initiatives to guarantee access to debate for marginalized or oppressed social groups, including women.
Global corporations have grown so large that they can no longer be effectively controlled by our governments. We need new instruments to reassert public control and citizen sovereignty over these firms.
The political stability needed for sustainable development requires agreements on economic integration to include mechanisms to ensure democratic security. Stability should be based on democratic participation and not on coercion. Any agreement should promote democracy in the Americas, without being interventionist in internal affairs. Democratic and non-coercive security entails civilian monitoring (accountable to citizens) of the forces of law and order. Civilian control is required, for example, to halt the arms race and the militarization of broad areas of the Americas which is currently being conducted under the pretext of fighting arms and drug trafficking and drug production.
International democratization requires the reform of United Nations institutions, including the Security Council, as well as international financial and trade institutions. The reforms must be based on consultation in every country and should be oriented to serving humankind's objectives: sustainable development and democracy and peace based on justice and respect for human dignity. Such institutions should not continue to be the tools of large multinational corporations and nuclear powers. The democratization of the world and inter-American system must also stop the exclusion of countries for ideological or political reasons, as is currently the case with Cuba.
All integration agreements must ensure that the defence and promotion of human rights, taken in the broadest sense, is also globalized. That is, not only civil and political rights and individual protections should be included, but also the collective rights of peoples and their communities: economic, social, cultural, and environmental. Special attention should be given to the rights of indigenous communities and peoples, and mechanisms put in place to eliminate all forms of discrimination and the oppression of women.
The rules flowing from agreements should preserve the power of individual countries to set high standards of living, valuing dignified work, the creation of enough good jobs, healthy communities, and a clean environment within their borders. There should be no limitations on the sovereignty of peoples, expressed at the state, provincial or local levels.
In today's world, economic sovereignty, stability and social welfare require making productive economic activities a priority, while discouraging speculative investment and regulating the free flow of footloose capital. Corporate interests should not undermine the economic sovereignty of our countries.
Economic integration should represent a commitment to improve the quality of life for all. Our countries should not be promoted on the basis of low wages, systematic discrimination against women or other groups, lack of social protections or lax enforcement. National competitiveness cannot be rooted in the deterioration of standard of living and/or the environment. Equalization of standards should be achieved through upward harmonization. Trade and integration accords, as well as domestic economic policies, should include social objectives, time tables, indicators of social impact and corrective remedies.
National governments must protect local efforts aimed at achieving viable, economically sustainable and food self-sufficient communities, both urban and rural.
Giving priority to welfare in international agreements means reducing military budgets and allocating resources to people's education and health. Money saved through military reductions in powerful nations should be channelled toward an international war on poverty.
Combatting drug production, trafficking and consumption should be an element of integration accords. Rather than taking a purely military approach, however, this should be achieved through mass educational campaigns, the elimination of the poverty driving this lucrative business, fighting against corruption and the involvement in the drug trade of high-level authorities, and other measures aimed at the root causes of the problem. International agreements must preserve the sovereignty of nation states over domestic matters and in the application of their own laws. They should not allow for the presence of armed troops or foreign police forces within the borders of a sovereign nation.
A main objective of any agreement should be the reduction of inequalities within and among nations, between women and men, and among races.
Along with the war on poverty, sustainability and protection of the environment are the fundamental challenges for any economic strategy or integration agreement. Trade agreements should give priority to the quality of development, which implies establishing social and environmental limits to growth. Sustainability and the welfare of the population should take precedence over short-term profits.
The new rules on integration should allow for more democratic control of land and natural resources and genuine respect for indigenous rights and land. Rich countries and major corporations have accumulated an ecological debt and occupy an "ecological footprint" far greater than their population and territory warrants. New agreements should allocate the costs of transition towards a sustainable model based on principles which recognize common concerns and different responsibilities. A truly sustainable alternative agreement would also include a comprehensive restructuring of incentives and rules designed to ensure that industrial production reflects its true, long-term costs.
Finally, efforts to promote sustainability should go beyond the natural world to include social sustainability, including the protection of the welfare of girls and boys, as well as family groups, and minority rights. This requires the creation of effective sanctions against policies which attract investment through promises of low wages, super-exploitation of workers, especially women, or a free hand in exploiting natural resources in areas where the population is under the control of local elites.
Over the past three generations, international conventions and declarations have established an increasingly detailed definition of human rights. In the first generation, civil and political rights were recognized; in the second, economic, social and cultural rights; and in the third generation, environmental rights, and the rights of peoples and communities.
Meanwhile, global as well as hemispheric economic integration have proceeded at a quick pace with no consideration for human rights, especially those associated with economic, social, and environmental rights and those of indigenous peoples and communities. In fact, the recent wave of free trade and trade-related agreements, both in the North and in the South, have shown that economic integration has detrimental effects on many sectors of society, jeopardizing human rights as a whole.
The "neo-liberal" approach to free trade and hemispheric economic integration sanctions corporate rights old and new. There are oblique references to workers' rights but almost no mention of the social rights of any other sector of the population. Worse, there is no connection established between these types of rights. In the past, the issue of human rights including gender equity, was incorporated into many regional and international accords. Now these rights are subjected to a barrage of criticism aimed at showing that they are nothing more than an impediment to unhindered trade. This strategy is aimed exclusively at furthering economic growth at the expense of the economic and social welfare of large sectors of the population.
Governments are increasingly adopting a uniform approach, often ignoring past commitments on rights or treating past human rights commitments separate from economic issues. In some extreme cases, they have pushed for collective, social and labor rights to be excluded from constitutional protection. Frequently, free trade negotiations end up affecting amendments to domestic social pacts, making the weakest social partners bear the brunt of concessions made to transnational corporations. These strategies have put human and social rights in jeopardy and have led to the deterioration of protections as well as the weakening of domestic and international enforcement mechanisms.
In the face of a globalization process that marginalizes broad sectors of the population, three basic points must be considered: 1) Democracy is closely linked to human rights. States and authorities can only be considered legitimate if they enforce, promote and guarantee these fundamental rights, broadly defined. 2) Without justice, no government is guaranteed the ability to govern. 3) Human rights must never be sacrificed to a model of development that threatens human dignity.
The countries of the Americas should build a common human rights agenda to be included in every economic, financial, and trade agreement within the hemisphere, along with mechanisms and institutions to ensure full implementation and enforcement.
The recognition of existing obligations and the ratification of pending accords are only the first step toward the full implementation of human rights. This will bring into effect the Right to Development as a universal and inalienable right and as an integral part of fundamental human rights as declared by the General Assembly of the UN in 1986.
Governments should prohibit all forms of discrimination based on gender, sexual orientation, race, ethnicity, religion, membership in any social or cultural group, nationality, or political views. They should establish effective domestic and international measures to eradicate "ethnic cleansing" which includes physical extermination or marginalization of and attacks on any social groups that experience discrimination within society, including gays and lesbians, persons with HIV/AIDS, street children, black people, prostitutes, and indigenous communities.
All trade, economic and financial agreements should include a "democracy clause" guaranteeing complete democracy within institutions of the state with unlimited protection of broadly defined human rights. All treaties must also effectively ensure participation of civil society in their development, adoption and implementation, clearly setting out transparent participation and accountability mechanisms for the various parties.
The Inter-American System of human rights should be reformed and strengthened in the following ways:
In order to implement these international commitments, all parties should ratify the principles of cooperation and coordination among international, regional and national human rights protection instruments. Mechanisms to ensure the enforcement of such rights should be enacted through inclusion of all human rights in all trade, economic and financial agreements. Moreover, the economic components of these agreements should not take precedence over human rights.
Ensure the promotion, enforcement and enforceability of human rights, defined broadly and inseparably (the right to gender equity, civil and political, economic, social, cultural, environmental rights and those relating to peoples and communities) within national borders and in the international sphere, as part of integration and globalization processes.
Expand the number of recognized rights universally to all citizens of the Americas.
Ensure the right to communication, research and access to information and opinions, taking into account groups which currently and historically have less access. Establish the obligation of member states to repeal all official censorship measures.
Ensure all affected individuals' right to pursue justice, including restitution, compensation, rehabilitation, satisfaction, and the guarantee that the offending acts will not be repeated, according to basic guiding principles of the rights of victims of human rights violations and the international humanitarian right to reparation (UN document E/CN.4/1997/104). Affected individuals should also have the right to their choice of mechanism to achieve the most timely and effective response.
Implementation by governments of the observations and recommendations developed by the various agencies of the Universal and Regional Human Rights Protection System.
Promotion of reforms and programs aimed at achieving autonomy, impartiality and professionalization of judiciary power. Ensure the right of speedy, simple and effective access to the recourse of habeas corpus and court protection in the defense of fundamental rights.
End the impunity or exemption from punishment in crimes of strong political or economic importance that may deter investigation or prevent impartiality of the justice system.
Initiate human rights and gender equity awareness training programs for civilian authorities responsible for the armed forces and law enforcement. Incorporate human rights into the curriculum of formal and informal education from pre-kindergarten through higher education.
Table of content Background
Liberalization of investment and the opening of trade through the free trade agreements signed to date, especially the North American Free Trade Agreement, have had severe social and environmental impacts on peoples and workers. The peoples of the Americas aspire to an international economy based on different principles-an economy that makes sustainability a priority.
The problems with classic trade and investment policy from an environmental perspective are that it "externalizes" (does not account for) environmental and social costs and fosters more intense energy use, over-exploitation of natural resources, and damage to biodiversity, all of which erodes the underlying basis of the economy and society. Such policies intensify the expropriation of genetic resources, the destruction of natural ecosystems, environmental degradation in agricultural and urban areas, environmental deregulation, and the violation of the individual and collective civil rights of generations present and future. Environmental degradation has also had a disproportionate effect on people living in poverty, especially women, as these groups tend to live with the impact of contaminated habitats and resources in places where there is less political will to improve conditions. Supporters of these policies view components of sustainable development as limitations to trade (e.g., food security, the protection of collective wisdom about and use of biodiversity, the sustainable use of ecosystems and the existence of fair and equitable ways of sharing the benefits of natural resources). Governments for the most part have rejected these ideals, yielding instead to international market pressures.
Environmental concerns cut across all topics. Therefore the points set out below are taken up more concretely or complemented in other chapters, such as those on energy and intellectual property rights.
Forests and Sustainable Energy
Sustainable energy development is predicated on respect for the right of communities, energy savings, and the fight against excessive energy consumption. Energy sources should be renewable, clean and low-impact, and equitable, democratic access to them must be ensured.
Energy integration should be a process that allows for the growth of potential and for cooperation among different countries under equitable conditions that reflect each nation's economic, social and cultural characteristics.
Therefore, the following are proposed:
Mining in the Americas has involved many decades of heavy metal pollution and the destruction of land and sea habitats, as well as threats to the health and safety of mine workers and their families, who often live near hazardous work sites and suffer effects to their physical and reproductive health due to contact with such contamination. These conditions are present throughout the hemisphere and reflect the inability of the public sector to control effectively the environmental impact of this activity.
The accelerated expansion
of mining carried out by international companies has not been accompanied by
stronger controls, regulations or safeguards for human or environmental health.
Rather, it has generated a demand for greater use of resources such as water
Therefore, the governments of the Americas must ensure the following:
Biodiversity and Intellectual Property
Conservation of biodiversity has been the responsibility of thousands of communities which use and cultivate resources for subsistence rather than for profit. The international exchange of the resources of biodiversity has historically been of benefit to many peoples, although benefits have been distributed less equitably over the last decades. Conservation and development of genetic resources in "scientific" centres, combined with institutionalized intellectual property systems, has caused looting and monopolization of genetic resources.
The hemisphere of the Americas currently faces enormous threats to its biodiversity from international trade liberalization treaties and the actions of multinational corporations. This creates a tremendous challenge to citizens, leading to the following demands (for a broader discussion of proposals on intellectual property, see Chapter 11):
Working people in the Americas believe that a just trading system is one that recognizes that basic labor standards and other measures for improving the welfare of working people cannot be left exclusively to markets. The future hemispheric accord must include provisions that guarantee basic worker rights, that ensure proper assistance for adjustment as markets are opened up, and that promote the improvement of working and living standards of workers and their families.
There exists a long tradition within the international community recognizing the necessity to apply and respect basic international labor standards. This recognition led to the creation in 1919 of the International Labor Organization (ILO), an institution that survives to this day as a UN agency that has the specific mandate of defining and monitoring international labor standards. All 35 countries of the Americas are members of the ILO and have ratified ILO conventions. Current trade agreements within the hemisphere, such as the MERCOSUR and NAFTA (more precisely, the NAFTA side agreement on labor, officially called the North American Agreement on Labor Cooperation or NAALC) state that fundamental principles regarding labor conditions should be respected within all member countries and that the agreements should contribute to a general improvement of the living standards of workers.
However, not even the most optimistic analyst of the impact of trade agreements such as NAFTA and the MERCOSUR would claim that these agreements have contributed to a general improvement of working conditions in member countries. On the contrary, the introduction of these agreements has led to greater instability of jobs and insecurity in the workplace. This has been the case most dramatically in Mexico since NAFTA came into effect in 1994. The specific provisions on labor standards, such as NAFTA's NAALC, tend to be strong on principles but weak on any specific mechanisms that can have a real impact on working people. Moreover, it is a recognized fact that even the most basic labor standards agreed upon at the ILO are regularly flouted by employers throughout most countries of the Americas, more often than not in attempting to obtain a competitive advantage over other employers. This takes place in spite of the fact that all countries of the hemisphere are members of the ILO, thus endorsing in principle the respect of international labor standards.
Since the early 1990s, the international labor movement has promoted the inclusion in international trade agreements of a "Workers Rights Clause," which would force employers and governments to deal with the frequent and repeated violation of fundamental workers' rights. Within the Americas, the Inter-American Regional Organization of Workers (ORIT), which represents a large majority of unionized workers in the Americas, has proposed the creation of a working group on labor and social issues as part of the FTAA negotiating structures which would have the mandate to negotiate basic labor standards for the Americas. Trade unions of the Americas would have direct participation in this working group.
Our proposed clause in the hemispheric accord for the Americas could result in certain producers losing the privileges accorded by the trade agreement, i.e. tariff-free access to foreign markets included in the free-trade zone, if fundamental workers' rights are not respected. The fundamental rights are defined as those covered by seven core Conventions of the ILO (among the total of 182 that have been adopted between 1919 and 1998), namely:
All countries of the Americas have ratified one or more of these so-called "core conventions" of the ILO. Moreover, virtually all governments of the countries of the Americas have stated that they respect and strive to apply the principles contained in these Conventions even when they have not yet ratified them formally. Despite these assurances, the rights to freedom of association and collective bargaining are routinely violated by a vast number of countries in the hemisphere, and child labor is endemic in several countries as is work-place discrimination against women and specific racial or ethnic groups.
For these reasons we propose that the seven fundamental workers' rights Conventions of the ILO as described above be included in a hemispheric agreement, meaning that employers and governments would be obliged to respect these Conventions as a condition of access to the benefits of the agreement.
Naturally, such a worker rights provision would be effective only to the extent that it were accompanied by an effective monitoring and enforcement mechanism. We propose that the monitoring function as well as that of making recommendations regarding the application of specific enforcement measures be delegated to the ILO, whose expertise in the field of monitoring the application of international labor standards is universally recognized. The complaints-based procedure that the ILO currently uses for keeping track of the respect of the freedom of association Conventions would be used for the Americas' workers rights clause. That is to say that unions or other non-governmental organizations could initiate an examination procedure by the ILO by lodging a complaint to the latter when fundamental rights contained in the core Conventions are violated.
The ILO would, at a first stage, carry out an investigation to verify whether or not the Conventions have in effect been violated. In cases where the Conventions are confirmed to have been violated, the ILO would, at a second stage, formulate recommendations to the country to assist it in complying with the Conventions which have not been respected. Only if this second stage were unsuccessful would the enforcement mechanism be applied, which is to say that the direct perpetrator of the violations would be deprived of specific benefits of the accord, i.e. trade sanctions.
To the extent that the perpetrator of the violation was a specific company, any specific sanctions would be directly targeted at that company. For example, if an auto-parts manufacturer in Country A were found to have violated the rights of freedom of association of its work-force, the exports coming from that particular manufacturer in Country A would no longer benefit from tariff-free access to all other countries party to the accord. Regular customs duties would be applied, in accordance with WTO agreements, as if the particular export came from outside of the Americas' free-trade area. More generalized sanctions, that is sanctions which would apply to all exports from a particular country, would only be administered if the country's government were shown to be an active and repeated accomplice in the violation of fundamental workers' rights in that country.
If both countries and companies were obligated to respect and apply fundamental workers' rights, this would help to establish and generalize workplace practices throughout the Americas in which:
The elimination of tariff barriers and other forms of protection will inevitably lead to the elimination of certain people's livelihoods in industries unable to meet the challenges of increased competition. If hemispheric free trade does contribute to greater economic efficiency and thus a general improvement of economic welfare, as its proponents claim it will, there should be no hesitation in assuring that the "losers" are compensated. Failure to do so could entail the marginalization of vast numbers of workers and agricultural producers through the process of hemispheric integration.
For this reason it is important that the future hemispheric agreement include a mechanism for allowing national economies to adjust to the impacts of economic integration, namely in the areas of skill retraining, infrastructure development and specific job-creation programs. Compensatory financing would obviously be necessary in order to take account of the unequal levels of development and capacities to adjust of different national economies and, as well, specific regions within countries. Specific funds would be provided for adjustment programs specifically targeted to assist those women and men working in industries or living in areas that suffer job losses through economic integration.
The European Union (EU) has established precedence for such financial support by providing structural development aid to the lower-income countries in the Union and also to specific geographic regions within higher-income member countries that have suffered from a decrease in protection or otherwise have not been able to reap the benefits of the integrated market. In a similar fashion, a structural development fund should be created as part and parcel of the agreement for the Americas to provide financial support for worker training, infrastructure development and job creation in lower-income countries and in designated regions within countries. Such a fund could be financed either through levies paid by countries on a scale which varies with the per capita income level (as is the case in Europe), or through a specific financing mechanism such as a Tobin Tax (i.e. a tax on international financial transactions) applied in the Americas.
In addition to the inclusion of a workers rights clause and appropriate adjustment mechanisms, we believe that the hemispheric agreement must include mechanisms for improving basic labor standards and social programs so that the agreement contributes to a betterment of working and living conditions for working people and a more equalized distribution of income within countries. Given the vastly different levels of development between countries of the Americas, we do not envisage developing anything like a common minimum wage throughout the hemisphere. However, it would certainly be within the scope of the agreement to establish guidelines, for example in relation to defined levels of subsistence, in setting minimum wages in the national context. Guidelines could also be established in the area of hours of work, rules on overtime pay, rest periods and vacations. As a first step, there would be a process for meeting minimum ILO standards and, subsequently, harmonizing upwards in order to move towards the highest existing standards within the hemisphere. A more rapid process of harmonization would be put in place regarding the definition of hemispheric norms for the prevention of workplace accidents and work-related disease, based on the highest existing standards in the Americas. These processes would be established with the full participation not only of governments but also of representative trade-union and employers' organizations.
There currently exist enormous differences between the countries of the Americas in the area of social and income-support programs, although there is a general tendency throughout the hemisphere for a serious deterioration of these programs as a result of government cut-backs. Even Canada, which used to pride itself on according a level of social protection that put it in the same league as Western European countries, currently has fallen behind all member countries of the European Union in terms of income maintenance for unemployed men and women. In other countries, universal State pension schemes are being privatized or otherwise eroded, leading to greater inequality of income for retired workers, especially women. If economic integration of the Americas is to contribute to a generalized improvement of living standards in the hemisphere, the rapid erosion of social protection that has taken place over the past decade obviously has to be reversed. Specific targets for basic social and income-support programs should therefore be included in the agreement, including unemployment insurance, compensation for injured workers, and pensions for retired workers.
In addition, financing through the hemispheric agreement must be provided to countries that, because of low per capita income levels, do not have the means to finance such schemes entirely on their own. A financing mechanism, perhaps modeled on the EU's social fund, could provide the necessary financial support. Hemispheric economic integration can be expected to make capital even more mobile than it already is and, subsequently, lead to greater job instability. The hemispheric agreement should provide for protection of workers against increasing job instability, especially respecting employers who may seek to avoid their obligations with regards to their employees by transferring their production to another country. All employers would be required to adhere to nationally administered funds ensuring the payment of all due wages and other indemnities employees are entitled to in case of job termination. Basic hemispheric standards regarding advance notice of layoffs and protection for part-time and sub-contracted labor would also be put in place.
International migration has increased over the last number of decades, accelerated by the process of globalization. There are currently about 125 million immigrants (people who have moved from one country to another) in the world, 80 million of whom are considered "recent" immigrants. The growing population of immigrant men, women and children has serious impacts for the countries they leave as well as for the countries which receive them. However, despite the demands of numerous nongovernmental organizations, officials have refused to address this issue in the negotiation of trade and investment liberalization agreements. Such agreements only deal with the free movement of capital, goods, and their agents, but exclude the mobility of workers.
The forces driving people to migrate are many. After political violence, the leading reason is the problem of unemployment. Immigration affects not only those who migrate. It has major consequences for the economic and social relationships between countries involved. It is therefore necessary to agree on international rules to address not only the human and labor rights of migrants but also to regulate the flow of labor.
The impacts of immigration are complex. Developing nations have become exporters of workers who are often vulnerable to exploitation. Corporations have taken full advantage of this situation, contributing to the lowering of wages for some workers in host countries. At the same time, the money remitted by the immigrant workers to family members in their homeland plays a major role in reducing problems in the current account balance in developing economies and cushioning social problems and extreme poverty.
The International Organization for Migration estimates that approximately 30 million immigrant workers send a total of nearly US$67 billion a year back to their countries. Many studies show that such remittances are the second leading source of foreign exchange in the world, after petroleum. In fact, for some countries in the Americas (such as El Salvador), remittances are the main source of foreign currency. In Mexico, despite an export-oriented economy and a well-developed maquiladora sector, remittances from workers outside the country remain the fourth-largest source of foreign currency. This accounts for the Mexican government's lack of interest in regulating the mobility of labor.
The United States, the largest host country for immigrant labor, has hardened and to a great extent militarized its immigration policy. It has also pressured other countries such as Mexico to create a retaining wall against the flow of people from Central America and the Caribbean. However, the rest of the continent is not impervious to the serious border problems linked to the flow of migrant labor.
In the future, trade and investment liberalization agreements must address both the human rights concerns related to immigration (in the broad sense discussed in the chapter in on human rights) and regulations on cross-border labor mobility.
The role of the state in leading hemispheric economic integration is irreplaceable if this process is to promote social justice, equity among regions and social groups, and sustainability. The democratic state should be a tool for society to use to address the economic and social problems the market cannot solve. Hence, this discussion should not be framed in terms of a polarization between state and market.
Historical experience shows that the state is necessary to deal with the flux of the market. Furthermore the economy is broader than the market, encompassing all production (not just what is traded), and requires the involvement of the state to establish adequate conditions for stable, sustainable growth. Opening up economies internationally does not necessarily mean they have to be left to the vagaries of international markets. There is no such thing as the free market, because of the large corporations which dominate and drive the market. Opening markets actually means letting these corporations drive and dominate the market to suit their own interests. Historically, there is no evidence that the market can achieve general equilibrium within the economy, let alone sustainability and social justice.
The key is for nations to open themselves to the world based on their own plans for fair and sustainable development led by democratic governments, rather than leaving the future of such development to market forces. Economies that are open are all the more reliant on regulation at the national and international levels and require a state strong enough to promote and enforce them.
Under the prevailing dominant economic model, state intervention in the economy is reduced, except in the promotion of the export sector and finance capital. By favoring exports, workers and most of the population cease to be seen as valued consumers since their impoverishment no longer affects the top strata of capital.
The dominant discourse demonizes government and assumes that the market does everything better. Adjustment programs imposed by the World Bank and the IMF increase this pressure, leading to a growing trend toward privatization. Governments see privatization as a short-term remedy for financial crisis and unbalanced budgets. It can also be a mechanism for the illegal transfer of wealth or favoritism toward certain economic interests.
There are three problems inherent in privatization: 1) it reduces the state's ability to lead the process of sustainable and fair development; 2) over the long term, government revenues fall, which normally results in reductions in public spending; and 3) serious injustices are created in public services, with a disproportionate burden of such cuts affecting women and people who are poor. Privatization is also used to lower wages and benefits for organized workers, as the sale of services usually results in the replacement of collective agreements by more "flexible" working conditions entailing fewer rights, less negotiating power, and lower benefits. We propose a fully democratic state, economically and socially accountable to its citizens, which radically challenges corruption at every level; a state with a qualitatively new role within the economy. We are not proposing an oversized state burdened by huge, inefficient enterprises. The number and size of public corporations is less important than the role they fulfil. Society, not only governments, should make decisions relating to industries in the public realm.
The goal should not be traditional protectionism, but building a state accountable to society that can implement a democratically established national development plan. This may involve the protection of certain sectors considered strategic within a country's plan, but more importantly, it means promoting forward-looking development. Regulation does not imply inhibiting private initiative. On the contrary, it means establishing clear rules balancing rights and obligations, and ensuring that both national and international capital promote a country's fair and sustainable development.
This renewed role for the state implies international regulations which must be determined democratically and through consultation with citizens. Sovereignty belongs to the people, who may decide to submit to international regulations if it is in the collective interest. International regulations are becoming increasingly necessary in the face of the supra-national power of certain corporations which operate within our economies and the weight and mobility of footloose capital.
This new and strategic role for the state in the economic and social spheres requires integrated fiscal reform favoring economic activity and redistribution, coupled with the ability to raise revenue at a level which avoids deficits so large that they impede development.
Nothing in an international agreement should constitute a renunciation or reduction of the state's ability to meet the economic and social demands of its citizens. This principle must take precedence if the state's capacity to meet these demands is diminished by such agreements.
Economic and Social Responsibilities of the State
Participation in the global economy entails a strong export sector, but this should not be pursued to the neglect of the domestic market. The strength of the export market should be measured not in the volume of exports but in the sector's ability to generate high-quality jobs and foster economic growth. The focus on strengthening the domestic market would mean that citizens would be viewed as valued consumers. Thus, raising standards of living would become an economic necessity for market expansion rather than merely a social justice issue.
Competition punishes corporations with low levels of productivity, but it does not necessarily increase productivity. The state has the inescapable responsibility to create conditions which favor competition among domestic companies in the international as well as internal markets. To achieve this, the promotion of technological research and development as well as education is indispensable to each country's viability. An explicit industrial policy must be established which includes building infrastructure, access to credit, education and research for the promotion of appropriate technology and integration of productive linkages.
The social role of the state entails public services, public security and the well-being of all. This requires specific policies aimed at each of the most vulnerable sectors of the population. These policies should be translated into laws which create rights, not policies of patronage or favoritism. The state's core aim should be just and sustainable development for all, while not excluding emergency or compensatory aid for particular groups.
Improving the quality of education and access to it requires new sources of funding. Part of tax revenues accruing from international financial transactions should be allocated to increased investment in education in countries with the smallest budgets (see Chapter 10).
In all countries of the Americas, education should favor a holistic approach. Educational systems should therefore do a better job of balancing utilitarian visions of education to meet the market's needs and humanistic approaches that allow individuals to participate actively and fully in the societies in which they live.
Priority should be given to literacy and basic education for all. Access to secondary and post-secondary education should be improved to allow all societies of the Americas to participate fully in the "globalization of knowledge" without this resulting in a homogenization of this knowledge.
The use of new technologies should favor the access to knowledge and allow for the circulation of the diverse forms of knowledge in all cultural communities. New technologies such as computers should be used in schools, but not as a substitute for teachers. New information and communication technologies must not be converted into yet more tools of exclusion and discrimination.
Any education action plan must contain measures directed toward improving the living standards for children and youth within the family. Especially important are education and mass campaigns to help children avoid drugs. Financial, psycho-social, and public health service supports are necessary. Adult education must not be neglected.
Access to health care services should be universal and not limited to those with jobs in the formal sector, since in most countries in the Americas, the majority of people experience unemployment, often turning to precarious employment in the informal sector. Health services should include those specially related to women and be designed with concern for women's access to such services.
Access to public health care services for indigenous communities and peoples should be guaranteed. At the same time, they should be based on the development and increased availability of traditional medicine and the age-old knowledge held in these communities, often by women.
Social security systems (including pensions) should be under the state's jurisdiction, and the savings funds used to finance them should be managed by the state and invested in high-priority national development projects. The funds should not be used as speculative capital, which would only serve to concentrate social wealth in a few hands.
Criteria for Economic Regulation
Each country may establish special regulations for sectors it deems to be especially important for its national development such as the following:
Public Sector Corporations
Corporations known as "state-owned enterprises" in fact belong to society and are only administered by the state. These public sector corporations are not established for personal profit, but are vehicles for healthy economic development, safeguards of sovereignty, and instruments of social and environmental justice.
Nevertheless, states should ensure that public sector corporations are sound and efficient. Corruption should be avoided by legislative and societal checks. Their perpetuation, creation or privatization should be decided by legislatures representing the popular will. In the case of strategic enterprises, laws should require broad and direct consultation with the public.
Government Procurement and Public Works Contracts
Government purchasing and public works contracts have a significant influence in some productive sectors. They are carried out with taxpayers' money and should therefore continue to be instruments of economic policy for national development. They should accordingly be subject to the following criteria:
Government procurement of goods and services should be subject to open and transparent competition to avoid corrupt practices in their allocation, with specific exceptions discussed below.
Criteria for competition need not be based exclusively on price and quality, but may also include the following:
Countries may establish lists of high-priority suppliers whose development they consider strategic for reasons of national development (such as the development of appropriate technology, spin-off effects on other economic sectors or the number of jobs they generate or on the achievement of gender or racial equity). To ensure that the priority given to nationals does not protect inefficiencies or place an excessive burden on public resources, suppliers should be required to offer bids within a certain percentage of competing foreign bids, comply with other criteria of the tendering process, and receive privileged status for a limited time. These preferential terms will be negotiated in conjunction with the supports necessary to bring the domestic suppliers up to the international competitive standard within a set timeframe.
Government procurement should also be used to protect and benefit groups affected by discrimination and marginalization, such as certain ethnic groups, cooperatives or producers in particularly depressed regions or those with high levels of extreme poverty.
Disputes over government procurement should be based explicitly on the above criteria, and be dealt with first by mechanisms within a country, and proceed only to international arbitration after recourse to national processes has been exhausted.
The Director General of the World Trade Organization (WTO), Renato Ruggiero, has compared the negotiation of international investment agreements to "writing a constitution of a single world economy." Indeed the investment rules written into the North American Free Trade Agreement (NAFTA) and the proposed Multilateral Agreement on Investment (MAI) are like constitutions that determine what governments can and cannot do.
Both NAFTA and the draft MAI build on the principle of "national treatment" which requires treating foreign investors "no less favorably" than domestic firms. Although negotiations on the MAI appear to have stalled within the OECD, the draft proposal is clearly intended as the basis for any investment chapter within the Free Trade Area of the Americas (FTAA). Proponents of the MAI also want to incorporate its measures into a revision of the Trade-Related Investment Measures (TRIMs) code within the WTO.
All of these investment agreements are biased in favor of maximizing the ability of transnational investors to move freely around the globe with minimum interference from national governments or international regulatory bodies.
In this chapter we counterpose an investment code based on principles that are fundamentally different than those in the MAI and NAFTA.
Investment regulation should not mean imposing excessive controls on investors or establishing protections for inefficient industries. Rather, it should involve orienting investment and creating conditions to enable investment to serve national development goals while obtaining reasonable returns.
Governments should have the power to:
Performance requirements need not be protectionist measures. Rather they should be a means through which host countries share the benefits of corporate investment. The prohibitions on performance requirements in NAFTA and the MAI prevent national and local communities from implementing economic development policies that utilize investment for the benefit of ordinary people.
Governments should have the power to impose performance requirements on investors such as are necessary to accomplish the following goals:
Citizen groups, indigenous peoples, local community development organizations and all levels of government should have the right to sue investors for violations of this investment code. All judicial and quasi-judicial procedures, such as arbitration, shall be fully transparent and open to public observation. Intervenor funding shall be made available to groups such as indigenous communities and environmental groups to enable their participation in legal proceedings.
The expropriation of corporate assets to serve vital community needs should be permitted. Compensation for expropriated resources shall be determined by national law with due regard to the value of the initial foreign investment; the valuation of properties for tax purposes and the amount of wealth taken out of the country during the duration of the investment. Investors should have the right of appeal to national courts in cases where they deem compensation to be inadequate. Appeal to international tribunals should only occur after all national procedures have been exhausted.
The international financial system must be reformed. We cannot go on lurching from crisis to crisis with ever larger bailouts that benefit the rich at the expense of the poor.
The burden of external debt must be lifted as it continues to cause a perverse transfer of wealth from impoverished peoples to their creditors. Over the years 1981 through 1987 less developed countries paid US$1.5 trillion more in debt service than they received in new loans. In 1995, the countries of Latin America had a total external debt burden of more than $600 billion.
These debt payments and the structural adjustment conditions imposed by creditors exacerbate inequalities among nations and distort development.
The rise in financial speculation at the expense of investment in production threatens the well-being of working people everywhere, North and South. NAFTA's investment rules, the proposed MAI and proposals for changing the articles of agreement of the International Monetary Fund are all designed to allow investors to take any kind of capital in or out of member countries in any amount at any time. We can only expect that FTAA negotiators will pursue similar proposals.
Our vision of international financial regulation has a different logic.
Intellectual property rights are theoretically intended to provide recognition for all products of the mind, such as inventions, music, or books. However, the recent wave of trade agreements have established intellectual property rights provisions that are biased towards protecting and compensating corporate-sponsored activity. A particular concern has been the emergence of intellectual property rights in products derived from biodiversity. Under these provisions, corporations have the right to patent products that have traditionally been treated as common property of local communities.
International agreements can play an important role in making the transition from fossil fuels and nuclear energy to conservation and use of clean, renewable sources of energy. In addition to being indispensable for economic development, energy is vital for sustaining human life. Meeting essential human needs must be the central aim of an energy plan based on equity between peoples and generations.
Guiding Principle: Integrated Resource Planning
Integrated Resource Planning (IRP) allows for the best usage of the most appropriate form of energy taking into account social and environmental factors. IRP responds to several criteria, not just market costs, in deciding how to use resources. It makes room for renewable resources because it employs "full cost accounting," taking into account social and environmental costs when evaluating options. IRP includes energy-saving measures and energy efficiency planning as a way of minimizing new construction of generating facilities and use of raw materials. Demand management is an essential feature of IRP. Similarly, IRP requires public consultation as a prerequisite for building a social consensus for every stage of reorienting the energy market.
We propose that the principles of IRP be included in Inter-American integration agreements.
Energy policy decisions must be guided by credible mechanisms for evaluating environmental impacts and for public participation. In order to promote optimal use of resources from a social and environmental perspective, national public agencies should be established to oversee environmental assessments and efficient management of energy resources.
The right to pursue policies of national development and resource management must be coupled with collective responsibilities.
Thus, each country should have the right to manage its own renewable and non-renewable resources without being obliged to continue to export those resources even in times of national shortages (as currently is the case for Canada under NAFTA's proportional sharing clauses, Articles 315 and 605, but not for Mexico, which has an exemption).
At the same time, countries endowed with non-renewable hydrocarbon resources should minimize their exploitation, to avoid contributing to greenhouse gas emissions causing global climate change and depleting the resource base for future generations. Governments should also support a moratorium on exploration in new areas for coal, natural gas and oil as a step towards the transition to clean and renewable energy sources.
An international agreement should allow members to make complaints against countries that try to achieve commercial advantage at the expense of sustainability. National and International agencies should co-operate to:
The pursuance of trade and investment liberalization within the FTAA process is likely to cause serious social and economic problems for the agricultural sector. Likely consequences include the acceleration of migration from rural to urban areas and the growth of poverty zones and increased marginalization both within cities and within rural regions, creating more pressure on local governments for basic services. In several countries, large corporations are pressing for the sale of agricultural land to be converted into forestry plantations, resulting in a decrease in agricultural employment and the loss of basic agricultural capital. These phenomena would make our countries´ food security increasingly dependent on volatile international market prices.
In light of these threats, agriculture should be given special treatment in trade and investment liberalization agreements, rather than being considered an economic sector like any other. Agriculture is a sector which fulfils a series of essential functions for the stability and security of nations: to preserve the cultural richness and multi-ethnicity of societies, to preserve bio-diversity, to generate employment and sustainability (as much in agriculture as in related economic activities), to maintain the population of rural areas, to ensure basic food security and to contribute to a sustainable development with more economic, social and political stability.
Therefore, to respond to the impacts of hemispheric integration, the development of a long-term rural development strategy and the adoption of an integrated agricultural policy within the FTAA are urgently needed.
The goal of the recent wave of free trade agreements has been the reciprocal lifting of trade barriers among nations, regardless of the countries' level of development or particular national interests. The dominant principle of these deals has been the concept of "national treatment," which means that governments should be required to treat foreign investors, investments, and products the same as their national counterparts. This chapter, while not criticizing international trade, argues that trade liberalization should not be an end in itself for which everything else must be sacrificed. Instead, market access for foreign products and investments should be evaluated and defined within the framework of national development plans.
The complex process of reconciling national development plans with international trade rules should take the following matters into account:
Internal timetables for trade liberalization and tariff reduction should be accompanied by coordinated programs to ensure that national industries become competitive during the transition. These programs should include access to consultants and training, technological research and development and long-term credit. Sectoral programs should be accompanied by a national development plan including commitments from the state to create the macro-economic conditions that enhance competitiveness. For developing countries, trade liberalization without an industrial policy is suicidal.
An even-handed tariff policy must be implemented to ensure linkage between productive sectors so that no sector is disadvantaged. This could occur if tariffs on an end product were eliminated without a corresponding reduction of duties on imports of its intermediate inputs.
The right to impose clear, transparent and agreed-upon performance requirements in conjunction with programs of tariff reduction must be preserved.
Non-Tariff Barriers and Standards
These standards, necessary
to ensure that such matters as quality, health and environmental protection
and workers' rights are taken into account, have also been used as hidden
obstacles to the free flow of trade from developing to developed countries.
They are imposed unilaterally, and may reflect the interests of corporations
and their lobbyists to get governments to impose protectionist sanctions
on foreign goods and/or services.
The challenge then is to eliminate bias and arbitrariness from the imposition of such standards to ensure they reflect legitimate interests and are not hidden protectionist measures to benefit specific companies.
These provisions should require multinational corporations to meet the highest standards to prevent the sale of products banned in that company's own country in countries with lower standards or lax enforcement. Only through broad and democratic processes of consultation and negotiation can consumer interests for high standards health and environmental protections be met and unilateral, illegal and covert protectionist measures avoided.
Rules of Origin
Rules of origin are the criteria by which products come to be considered to be originating in a given place, which then affects their treatment in cross-border exchange under free trade agreements. The trend in such agreements is to establish regional rules of origin specifying a percentage of components or inputs to be included in order to qualify for designation of origin. While we do not exclude additional regional or sub-regional content requirements within the hemisphere, our view is that countries should be able to establish national content rules if the country feels that national economic development requires such designation. This demand or principle complements other proposals in Chapter 9 regarding the requirement for foreign companies to source a percentage of inputs in the country of production.
Countries may deem that, without national content rules, trade liberalization only benefits intra-firm integration and leads to the disintegration of national productive linkages. Lacking incentives to purchase production inputs within the country of production, large export companies revert to imports, which eliminates spin-off economic growth, despite increasing production. The neo-liberal model assumes that the export sector is the engine of economic growth. In practice, this "engine" becomes disconnected from the rest of the train.
The rules and standards proposed in this document govern the conduct of nations, companies and individuals doing business in the hemisphere. They include specific regulations for investors and financial institutions; they ensure standards of environmental quality and the use of energy and natural resources; they specify the rights of workers, women, indigenous peoples, Black peoples and basic human rights of all peoples.
To make these rules and standards meaningful, it is critical that agreements include strong mechanisms for dispute resolution and rules enforcement. However, the development of such mechanisms raises complex issues. Hence, the formulation of such mechanisms must involve a process beyond the scope of the present document. To finalize such machinery will require continued multi-national discussions. The present chapter is intended to be a starting point for such discussions. It includes some general principles discussed at the Peoples' Summit that serve as the foundation for future discussions leading to more specific rules and enforcement machinery. These principles reflect the consensus that dispute resolution and enforcement mechanisms should be focused on reducing inequalities and based on fair and democratic processes. The chapter also raises the issue of whether agreements should include special safeguards for countries suffering as the result of surges in imports.
Labor and human rights and environmental quality controls cannot simply be tacked on to economic agreements through weak side agreements or simply through the addition of a social clause. They must be integral to the agreements themselves.
INTERNATIONAL EQUITY ISSUES
The key objective of enforcement and the use of the rules discussed in this document should be to lessen development gaps among nations through a process in which all standards are harmonized upwards. Such a process must consider different levels of development in establishing the following:
Other standards such as minimum wages may vary with levels of development. A second task would be to identify such standards in general terms and define them in such a way that they can have region-wide applicability. For example it would be possible to define minimum wage standards in terms of what is required to avoid poverty -- "a living wage." The specific amount will then vary from one nation to another.
In some instances, the development process itself may cause hardships due to dislocations as resources are re-allocated and people lose jobs. In such cases, development through economic integration must be accompanied by compensation mechanisms for the losers. Thus part of the process of constructing an agreement for hemispheric development must include the establishment of mechanisms for adjustment assistance. In more developed nations, adjustment may come from general tax revenues, but for less developed nations a multi-national adjustment institution will be required.
Specific measures must be developed to prevent safeguard rules from being applied to the detriment of other nations. Safeguards or "escape clauses" are designed to allow countries to obtain relief when a surge of imports reduces output, employment or otherwise causes injury to a domestic industry. These rules allow countries to temporarily restrict imports to provide relief to domestic industries which are suffering as a result of import surges. However, it is important to deter the use of emergency measures by developed nations in ways that run counter to the objective of reducing development gaps in the hemisphere.
Finally, nations without resources to enforce rules should be provided with funds for this purpose. Such funding can be implemented through the same mechanism developed for dislocation compensation.
ENFORCEMENT AND PENALTIES
A critical aspect of the process of enforcement and the imposition of penalties for non-compliance is to institute a democratic and open process. Specific measures must be developed to ensure transparency and proper representation for civil society.
SOME KEY ISSUES:
This raises the issue of representativeness which also presents some difficulties. Corporations and organized labor have well-established organizations through which representatives can be appointed or elected. But there are no comparable entities that can represent all environmental organizations or the spectrum of other NGOs with a stake in this process. Therefore some effort must be made to develop representative institutions for various interests.
There will also need to be ongoing audits of companies who operate within the hemisphere and thus enjoy the fruits of the agreement. Similarly, there must be a mechanism for responding to complaints about corporate conduct. Each government should have primary responsibility for the audits and response to complaints. But a hemispheric funding mechanism must be created for this purpose.
All processes involving enforcement must be fully transparent. That includes a written public record of all proceedings and open hearings. There also needs to be a clear appeals process. Also this agreement must give standing to all stakeholders for participation in the process. Governments (including local governments), labor organizations, and NGOs should all have standing to bring complaints if they feel that they have an interest in the outcome of deliberations at both national and multi-national levels.
Penalties for non-compliance should be imposed on both governments and companies. Prior to the imposition of such penalties, adequate notice should be given to provide opportunity for response and/or compliance. There should be stiff penalties available that can be directed at corporations and enforced by national governments.
This document aims to lay the foundation for a social alliance that spans borders and unites us around the specific concerns of all of civil society. In contrast to the rules and standards embedded in NAFTA and the proposed FTAA, which benefit the few at the expense of most of us, our proposed rules and standards would enhance the every-day life of our citizens.
of course, this is not a finished product. Much additional work is needed to disseminate, debate and educate around these points in order to reach consensus and create a solid basis for a hemispheric social alliance. We hope that this paper will serve as a basis for developing materials more oriented toward popular education work with various social sectors in our countries. Any interested organization should use it freely and creatively. Only through free and open debate can a true consensus be reached around serious, viable proposals for a sustainable continent and the well-being of our peoples.
This is a living document that will be updated and distributed from time to time with everyone's additions.
Comments can be addressed
via email: firstname.lastname@example.org:
via postal service: Common Frontiers, 15 Gervais Dr., Suite 305, Don Mills, Ontario, :
via fax: 416-441-4073 (attention: Patty) :
ALLIANCE FOR RESPONSIBLE
733 15th St. #920, Washington, DC 20005, USA
Contact: Pharis Harvey
15 Gervais Dr. Suite 305, Don Mills, Ontario, M3C 1Y8, Canada
ph: 416-443-9244, fax: 416-441-4073,
contact: Patty C. Barrera
Seminario 774, Nunoa, Santiago, 6841232, Chile
ph: 56-2-364-1738, fax: 56-2-364-1739,
contact: Coral Pey
Godard 20, Col. Guadalupe Victoria, CP. 07790, Mexico, D.F.
contact: Sylvia Sandoval
c/o Alternatives, 3720 Avenue du Parc, 3e etage, Montreal P.Q,
ph: 514-982-6606 ext:2243, Fax: 514-982-6122
contact: Marcela Escribano
Ce site a été construit par un stagiaire, dans le cadre du stage Furetez dans le monde'99, 2000 d' Alternatives