SUNS  4330 Tuesday 24 November 1998



LABOUR, ENVIRONMENT KEY TO ALTERNATIVE FTAA PACT

Washington, Nov 22 (IPS) - Advocates of "just and sustainable development" are forging a 'People's Hemispheric Agreement' to rival official free-trade proposals.

An officially-envisioned 'Free Trade Area of the Americas' (FTAA), to be agreed by 2005, would bind the Western Hemisphere's 34 countries in a common market stretching from Cape Horn to the Arctic Ocean.

Activists and academics hope to persuade the FTAA's backers to take other considerations on board. They argue, in a draft report discussed here Friday, that "trade and investment should not be ends in themselves, but rather the instruments for achieving just and sustainable development".

Otherwise, economic integration will follow a "neo-liberal economic model (that) has been a disaster for most of the people of the hemisphere," according to the report, 'Alternatives for the Americas'.

"It's not so much a choice between open and closed economies but a matter of ensuring that society has a role in the decision-making," says Alberto Arroyo, economics professor from Mexico's Autonomous Metropolitan University.

That role risks being limited to an FTAA civil society committee which so far has been "little more than a mail drop" for grassroots groups' comments, says Patty Barrera of Canada's Common Frontiers.

In addition to the Canadian group, the report's principal sponsors include the Chilean Network for a People's Initiative (RECHIP), the Mexican Action Network on Free Trade (RMALC), the U.S.-based Alliance for Responsible Trade, and Reseau Quebecois sur l'Iintegration Continentale (Quebec Network on Continental Integration).

For the 34 governments involved, FTAA mainly is "an instrument of market access and regional integration," according to Peter Allgeier, Associate U.S. Trade Representative for the Western Hemisphere. The report acknowledges this, but urges that access for foreign products and investments not be given greater privilege than national development plans, especially in the region's developing countries.

Any tariff-reduction timetable "should be accompanied by programmes to ensure that domestic industries become competitive during the transition," it says. Non-tariff trade barriers should "reflect
legitimate social interests rather than protections for specific companies."

The report also argues that:

* Countries should build "a common human rights agenda" to ensure that all hemispheric agreements uphold economic, social, cultural, environmental, civil and political rights, promote gender equity, and protect indigenous peoples' interests.

* Hemispheric agreements must allow governments to channel investment towards environmentally sustainable economic activities and file complaints against one another for seeking commercial advantage "at the expense of sustainability."

* Pacts must honour workers' rights - chiefly, to form unions - and "ensure proper assistance for adjustment as markets are opened up." Agreements should also recognise and protect immigrant workers' rights.

* Taxes should be levied on foreign exchange transactions and the proceeds ploughed into development programmes. Governments should be permitted to limit the volatility of capital flows, steer these towards direct and productive investments, and sue investment rule-breakers.

* 'Intellectual property' regimes should prevent corporate interests from undermining the right to livelihood of farmers, fisherfolk, other "guardians of biodiversity", artists and cultural workers.

* Countries should be allowed to ensure food security by protecting or excluding staple foods from trade agreements.

Environmental costs of economic activity should be distributed proportionately, with the heaviest burden falling on rich nations which "occupy an exaggerated environmental space" because of overconsumption, Arroyo argues.

Countries must set specific deadlines to phase out commerce in environmentally harmful products and impose tariffs to discourage their use in the interim, he adds.

Likewise, labour rights must be enshrined in trade agreements rather than relegated to side-agreements, "as a way of ensuring that trade can make a contribution to improving standards of living," says Marcelo Sereno, director of organising at Brazil's Central Unica dos Trabalhadores, a trade union federation.

Government and business leaders have argued that unions, by pursuing higher wages, undermine a central element in developing countries' competitiveness: cheap labour. Sereno, however, maintains that the difference in income levels between rich and poor countries is so great that significant improvements can be achieved without upsetting competition.

Workers are fighting for the right to unionise and bargain collectively, he adds, because "we must have the tools to improve living standards. Without the freedom to organise, and without strong
unions, we can't fight for those improvements."
If workers' welfare hangs in the balance, so do global economic prospects, according to John Dillon, author of 'Turning the Tide: Confronting the Money Traders'.

The notion that the United States acts as 'consumer of last resort', importing like mad to stave off global recession and save the reigning, export-led economic model, "is not a sustainable solution," Dillon argues.

That idea, apart from being unrealistic, threatens to worsen the environmental consequences of overconsumption by monied classes in the world's wealthiest nation. Economic prospects could receive a more meaningful boost were significant debt relief to be delivered, according to the Canadian economist.

This would involve going beyond the "timid" provisions of the 'Heavily Indebted Poor Countries' initiative shepherded by the International Monetary Fund and World Bank, increasing the relief offered and extending it to middle-income countries so as to stimulate consumption there, Dillon says.

Within middle-income countries, Arroyo adds, policy should aim to direct the resulting gains toward poor and middle-income people. They make up the bulk of the population and are most able to put increased purchasing power to good use.

As an added bonus, workers in developing countries would emerge as "strategic consumers", according to the Mexican academic. "This would give investors a reason to care about our impoverishment and living standards."

The current draft of 'Alternatives for the Americas' builds on an earlier version prepared for the April 1998 People's Summit of the Americas, held to coincide with ministerial trade negotiations in
Santiago, Chile.