Trade winds from the South

The rhetoric of the FTAA

Michael Kirkpatrick

George Orwell once wrote that political language “is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” When government leaders from throughout the Western Hemisphere gathered in Mar del Plata, Argentina, for the Summit of the Americas a few weeks ago, it was difficult not to recall Orwell’s adage.

On the Summit’s agenda were market reforms and the proposed Free Trade Area of the Americas (FTAA), a neo-liberal bid to establish a free trade zone from Alaska to Argentina. In fine form, Prime Minister Paul Martin and President George W. Bush used the Summit to broadcast their intellectually bankrupt discourse of free trade.

Contrary to what Bush and Martin say, free trade has little to do with the free exchange of goods over international borders. To believe otherwise is to engage in an exercise of self-deception. This truism can be discovered by considering any number of contemporary trade disputes between Canada and the U.S. or by flipping through the paperwork of the North American Free Trade Agreement (NAFTA), the template for the FTAA. NAFTA and the proposed FTAA are principally devices to ensure the free exchange of financial capital over international borders for investment.

Much of the neo-liberal rhetoric on free trade has revolved around the plight of the poor. From Mar del Plata, Martin argued that, “Freer and fairer trade will lift more human beings out of poverty than all of the assistance programs in the world combined.” These types of arguments are often accompanied with lofty statistics about the wonders of global trade.

Investor’s Business Daily, for example, recently revealed that Mexico’s Gross Domestic Product (GDP) has doubled to $1 trillion since NAFTA was signed in 1994. Further, Mexican GDP per capita increased by nearly $3,000 in the period from 1995-2002, whereas Venezuela’s GDP per capita — currently under the tutelage of “far-left demagogue” Hugo Chavez, as the article fondly pointed out — actually dropped in the same period.

While I do not dispute these numbers, a few minor details have been left out of this discussion of the Mexican financial miracle. The Mexican peso collapsed in December 1994, largely as a result of NAFTA. The devaluation triggered a reaction from then-U.S. president Bill Clinton to scramble to protect the image of the neo-liberal model and prevent a global financial crisis.

Clinton rallied support from Canada, Europe and the International Monetary Fund to bail out the Mexican economy, providing his NAFTA partner with a $52 billion emergency loan package. The loan was the largest foreign financial bailout in U.S. history and served to keep the Mexican economy afloat, a fact conveniently forgotten by NAFTA proponents.

Another point to consider is that GDP per capita does not measure social well-being and can easily be skewed by the wealthy elite. Thus, during the first few years of NAFTA, the number of billionaires in Mexico skyrocketed, while in the period from 1993-1996, some 2.5 million Mexicans lost their jobs.

Similarly, GDP per capita does not account for the drop in real wages for the working classes of the three signatory countries of NAFTA or the inability of small-scale Mexican farmers to compete with American and Canadian state-subsidized crops. The simple fact remains that the statistics of free trade ignore the social reality of trade agreements for the majority of the population.

Many view the FTAA as an extension of the G8 Summits and the World Trade Organization meetings over the past half dozen years. It is interesting how the language of protest has now been appropriated by dominant players in the pro-FTAA camp; from the Seattle protests of 1999, to the Quebec City demonstrations of 2001 and the Genoa marches a few months later, one of the catch phrases of the so-called “anti-globalization movement” (a deceptive and dangerous name itself), has been the demand for fair trade, not free trade.

So, is it any surprise that both Paul Martin and George W. Bush recently asserted their commitment to “free and fair trade,” as if the two concepts were mutually reinforcing and compatible? I think not. Such linguistic posturing plays an important function in what Walter Lippman called the “manufacture of consent.” Essentially, like they do with most issues, politicians pay lip-service to social concerns in order to gain legitimacy and consent from the electorate.

If those who are trying to “sell” free trade were actually serious about increasing well-being, they would increase spending on social programs and create sustainable models of economic development. But, unfortunately, Martin and Bush are as committed to helping the poor as they are to fostering democracy in the hemisphere.

Certainly Jean-Bertrand Aristide — the former democratically-elected Haitian president who was overthrown by a joint Canadian/American/French coup d’etat in February 2004 — can attest to the fact that neither Bush nor Martin has any serious qualms with authoritarianism.

Despite their gestures and lies, Martin and Bush had little influence on the South American leaders, as Argentina, Brazil, Paraguay, Uruguay and Venezuela refused the terms of the FTAA.

It seems that the shortcomings of neo-liberal thought and practice have been painfully felt for too long in the Western Hemisphere. The political rhetoric and discourse that mask the realities of free trade have become transparent, and the FTAA has come to be regarded by many as pure wind.

Michael Kirkpatrick is pursuing a masters degree in Latin American history.