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    supporting whoever..., 2005-07-28 13:39:27 | Main | the mother of all welfare queens speaks..., 2005-07-30 17:31:16

    CAFTA:

    I see another investor rights and corporate protectionist racket has been passed by congress. What I wouldn't do to see them sign off on a two page agreement for reciprocal tarriff and subsidy reductions, that might actually be interesting. This thing is, as they all are, hundreds of pages of technocratic jargon and somewhere in there you might dig up something not entirely dissimilar to part of a free trade agreement. Among all its twisting and churning of existing trade relations we have the usual provisions:

    • Member governments will be required to open bidding on government projects to transnational corporations, part of its various formalizations of gunboat privatization.
    • Strengthens enforcement of investor claims against foreign parties. For example Costa Rica will likely be forced to move Harken Energy's 57 billion dollar claim against Costa Rican environmental laws (something like twice CR's GDP) out of its national courts into an international tribunal in seeking damages for some unrealized potentiality. Someone will have to remind me where Adam Smith discussed the right to sue a contracting party to collect unrealized profits.
    • Such claims under Chapter 11 will be possible against regulations that are "more burdensome than necessary to ensure quality of service", as judged by a three member panel, regarding the operation of public utilities. It would seem fair to ask what giving corporations the right to sue governments for regulating, say, matters of public health and saftey, has to do with free trade. But then there's three chapters of the thing devoted to the matter, so there you go.
    • Agricultural subsidies, and subsidization of export industries in general, are left completely out - apparently gross market distortions like US ag and transport subsidies are not considered a "non-tarriff barrier to trade" like, say, a union or public health inspector. While there are no restrictions on how the US subsidizes industry these Central American governments are under strict structural adjustment agreements that restrict how they subsidize their industry. They call this "levelling the playing field".
    • Protectionist "yarn-forward" point-of-origin and quota constraints will be altered to protect US textile industries operating in Central America from Asian markets.
    • Existing ag tarriffs, meanwhile, will be dramatically reduced in Central America, driving small local growers out of business because of increased market pressure from said heavily subsidized American firms, sending them into the cities searching for work in US owned textile mills and factories, etc., driving wages down to "competitive" levels, putting further downward pressure on American wages and increasing rates of illegal immigration.
    • Expands protectionist "intellectual property" laws to give big pharma a loophole through the petty concessions on generic drug use that were eventually made to developing nations under TRIPS.

    It's impossible - and I'm ignoring the last minute pork slabbed to big sugar, et. al. - to see how anybody remotely interested in free markets could possibly support an agreement whose every provision, or lack thereof, is explicitly designed to protect some entrenched special interest against competition. About the only significant competition opened by this agreement is between independent producers in Central Asia against US state-backed monoliths and US workers against low wage competition in Central America: not so much a competition as a class slaughter. In this it's no different from past "free trade" agreements, and does little to alter existing trade relations so much as it does property relations.

    Nevermind how they slimed it through congress about the same as they did with the bankruptcy bill: with the collaboration of key Democratic votes. For good reason this is bad for anybody who might wish someday to see them push some GOP scum from power. We defer to pipa:

    An overwhelming majority—90%—said that countries that are part of international trade agreements should be required to maintain minimum standards for working conditions. Similarly 83% agreed that, “While we cannot expect workers in foreign countries to make the same wages as in the US, we should expect other countries to permit wages to rise by allowing workers to organize into unions and by putting a stop to child labor.”

    Seventy-four percent endorsed the view that, “if people in other countries are making products that we use, this creates a moral obligation for us to make efforts to ensure that they do not have to work in harsh or unsafe conditions” while just 24% endorsed the view that, “it is not for us to judge what the working conditions should be in another country.”

    Americans!

    While supporters of the agreement are all too happy to celebrate the unenforceable, backwards language of the 10 page section on labour as a "dramatic step forward" the provisions are wholly inadequate. The vague language is unenforceable in court - a brief scan of the language of chapters 9-15 on investor protections shows you what enforceable law looks like, compared to chapters 16-18 where labour, environment, and transparency are dealt with on a "strive to ensure" basis. How do you prove somebody didn't "strive"?

    More so, what member countries must strive to ensure is existing law: the administration was blocking the release of its own studies of said existing law for over a year, which were unsurprisingly critical. The AP, thank you very much, finally reported this story a day after the vote passed.

    CAFTA fails to meet even the minimal standards of the AFL-CIO-approved Jordan trade agreement, the labor provisions of which the executive long ago promised not to enforce . The right to free association is barely protected in this country, and the hell if it's ever been protected in El Salvador. If you're speculating in Central American markets or murdering union organizers at your bottling plant you couldn't ask for better protection, for everybody else it'll just be yet another dismal failure for the World Bank and US trade reps to lie about for years to come.

    update: I should get around to coding the trackback mechanism for this thing someday. Kevin Carson has much to add on the topic of gunboat privatization.


:: posted by buermann @ 2005-07-29 15:43:02 CST | link





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