RECOGNIZE FREE TRADE FAILURES

UNDERSTAND CONNECTIONS

RAISE AWARENESS

PROMOTE FAIR TRADE

COLOMBIA FTA

RECOGNIZE FREE TRADE FAILURES

NAFTA Failures in Mexico
(Taken from the CAFTA Briefing Packet, by the Washington Office on Latin America (WOLA)

NAFTA in Mexico:

Signed in 1994, North American Free Trade Agreement (NAFTA) was lauded by its supporters as a “win-win-win” accord that would bring increased economic integration, development, and growth to Canada, Mexico, and the United States. NAFTA has undoubtedly accelerated regional economic integration, and select sectors have benefited from the agreement. But the tradeoffs of such integration are by no means negligible. Lessons learned from the experience of farmers and workers in Mexico under NAFTA can help illuminate the risks of sweeping reforms now being proposed for Central America.

• Asymmetrical levels of development in Mexico and the United States have acted as a barrier to real competition between the two countries, and have dealt a blow to Mexico’s small and medium producers. A 2001 report by the Economic Policy Institute found that at the time Mexico entered into NAFTA negotiations, it suffered from “noncompetitive production costs…due to higher prices for inputs such as diesel and electricity, higher financial costs, and higher marketing costs (due to deficient infrastructure in highways and warehouse storage…among other factors).” Greater access to farm technology and targeted subsidies in the United States have allowed large-scale agribusinesses to flourish, while the vast majority of Mexican farmers cultivate small plots with far fewer technological inputs. Combined with an elimination of some subsidies and price supports for Mexican farmers, the disparity has resulted in a flood of low-cost US goods to Mexico with which most Mexican farmers are unable to compete.

NAFTA and Labor in Mexico

• Blows to the rural agriculture sector under liberalization have not necessarily been offset by increased employment in urban areas. Under NAFTA, Mexico has seen a dramatic expansion of maquiladoras, with these plants contributing to 35% of all new manufacturing employment between 1995 and 1999. However, jobs were lost during the same period, as factories that had previously supplied inputs to exporters were replaced by foreign suppliers. On balance, employment in the manufacturing sector fell 9.4% between 1993 and 2000, as the loss in supply-chain jobs overtook growth in the maquiladora industry.
  
  
• Even in sectors that experienced growth under NAFTA, wages and purchasing power fell.According to a report issued by the office of Mexican President Ernesto Zedillo in 2000, incomes of salaried workers in Mexico fell by 25% between 1993 and 1998. While some of this decline can be attributed to the peso crisis Mexico experienced in 1995, even wages in maquiladoras – a rapidly expanding sector of the economy – fell by 21% during this period. Moreover, the purchasing power of the minimum wage fell by 17.9% through 1999.
  
  
• Workers’ rights and working conditions in Mexico have not improved noticeably under NAFTA, despite the inclusion of labor provisions in the agreement. The North American Agreement on Labor Cooperation (NAALC), a side agreement of NAFTA, called on signatories to enforce their existing labor laws and created a mechanism by which an outside panel could be appointed if countries exhibited a pattern of non-compliance. While the agreement held potential to strengthen labor standards and practices, the decision to use NAALC in this way – including calling for an arbitrating panel in cases of non-compliance – was placed in the hands of signatory countries rather than an independent oversight body. Moreover, only certain violations could trigger panel review or sanctions. Violations of the freedom of association, the right to bargain collectively, and the right to strike are among the labor rights not eligible for review or sanctions. As documented by Human Rights Watch, the end result of NAALC has been that signatories’ “interpretation of [the agreement’s] obligations has been minimal…[and] petitioners’ concerns have been ignored.”

CAFTA Failures
(Taken from the Stop CAFTA Coalition’s Third Annual Report Third Annual Monitoring Report) To view the full report: www.stopcafta.org

The Stop CAFTA Coalition and its partners have compiled this third annual report to detail the trends and impacts the U.S.-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) has had on citizens and economies in the signatory countries. The agreement is still relatively new, but the problems and trends forecasted or identified early on have materialized or proven worse than first expected. Patterns of growing inequality and ongoing poverty within the signatory countries have only become more extreme, contrary to claims that DR-CAFTA proponents made when arguing for the agreement’s passage.

The Stop CAFTA Coalition has determined that the negative impacts that DR-CAFTA has made in these countries are not simply “growing pains,” or the inevitable transitionary problems associated with the restructuring of a country’s economic system; they are fundamental flaws in the economic theory that drives DRCAFTA and will likely not improve. Therefore, the Coalition strongly recommends that the DR-CAFTA agreement be reassessed by the incoming Obama Administration and the 111th Congress, which convenes in January 2009. Not only should the U.S. put a moratorium on future CAFTA-style agreements, but Congress should evaluate the existing agreements and renegotiate or roll back the failed accords. In the case of DRCAFTA, the results of this report lead the Stop CAFTA Coalition to believe that the current agreement should be either completely overhauled or outright eliminated, and that a alternative trade relationship between the U.S. and Central America should built based on the eight principles of the “Pledge for Trade Justice” presented in the conclusion of this report.

Findings of “DR-CAFTA: Effects and Alternatives”
In this year’s report, analysts have found that the impacts and trends outlined in the 2007 report have continued or worsened. This is most apparent in El Salvador, Guatemala, and Nicaragua, three of the first countries to implement DR-CAFTA, and the three countries on which this report focuses. In all three cases, none of the comprehensive benefits it promised to these countries have yet been realized.

Social Impacts in Central America

Under DR-CAFTA, some signatory countries can report thousands of new jobs and reductions in rural unemployment, but these statistics can be misleading. Proponents of the trade agreement attribute the gains to DR-CAFTA. The statistics do not show, however, that many of the jobs created are dangerous, exploitative, and unstable jobs in factories, or maquilas, of the multi-national corporations that have moved into Central America as a result of DR-CAFTA’s investment incentives. The data does not introduce us to the many citizens whose families have sustained themselves farming for generations, but who are now forced to take maquila jobs because of a lack of options. Nor do statistics explain that job increases are usually accompanied by similar amounts of jobs lost in the agricultural sector. Similarly, unemployment figures typically do not take into account that much of the reduction in unemployment is the result of thousands upon thousands of workers forced to emigrate to Mexico or the United States because farming is not only no longer profitable, but cannot even sustain an already impoverished family.

Trade Balance

Some countries also saw increases in exports. These gains, however, are almost exclusively limited to large, often foreign corporations whose profits do not benefit the local economies or were to locations other than the U.S. Central American farmers are often unable to access the international market, in part due to weak infrastructure and their inability to compete with large corporate farms that have access to the capital needed to succeed in a DR-CAFTA economy. For most signatory countries, exports to the United States fell and imports from the United States rose, resulting in even greater trade imbalances than before the agreement. Earnings in the textile sector were also disappointing, as the region continued to lose jobs to Asia. One contributing factor was expiration of the Multi- Fiber Agreement (MFA) that regulated textile quotas and ensured that Central American countries could export to the U.S. Any advantages that DR-CAFTA created were diminished as companies pulled out of Central America and relocated in China.

Intellectual Property

Another potentially debilitating aspect of DR-CAFTA is the impact of its mandates regarding intellectual property rights. DR-CAFTA allows corporations to extend patent restrictions on pharmaceuticals, which means that once DR-CAFTA passes in a country, any medicine still under patent in the United States can extend that patent for twenty years in a CAFTA country. This creates an even more pervasive monopoly: local pharmaceutical companies must wait even longer before producing generic products for impoverished citizens that are unable to afford band-name products. These intellectual property provisions effectively perpetuate an already alarming inequality in health care across Central America by making many drugs affordable only to the extremely wealthy.

Mega-projects

Large-scale industrial development projects, such as open-pit mines or hydroelectric dams, are entering the region in increasing numbers due to DR-CAFTA’s stipulations regarding foreign investment. According to DRCAFTA, countries that host these foreign mega-projects are required to lower any “barriers to investment,” which usually means any tax or other type of benefit the country would receive from the project. DR-CAFTA also makes it very difficult for countries to take any legal action against a foreign corporation for any crimes committed in the country. Companies that bring mega-projects to the region also, quite often, exploit the indigenous populations the projects affect, by pushing them off of their ancestral land, poisoning or re-directing DR-CAFTA: Effects and Alternatives 2 their water supplies, and ignoring the repeated calls of indigenous peoples for human rights. Foreign corporations typically enter a country, extract the country’s resources or energy, displace and otherwise harm native peoples, and then leave, having provided little to no benefit to the host country.

See also:  http://www.share-elsalvador.org/programs/advocacy.htm

A Decade of Economic and Trade Integration (Word doc)

Free Trade Frequently Asked Questions (Word doc)

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UNDERSTAND CONNECTIONS

The WFP Mexico team identifies the migration of Mexican farmers as a result of the NAFTA agreement: (Mexico Imports Corn and Exports Corn Farmers: 15 years of NAFTA)

“The 15-year protectionist period for the four basic food staples – corn, beans, powered milk and sugar – was supposed to allow Mexico time to modernize its agricultural sector and transition toward producing more of what are considered to be its “comparative advantages” in agriculture: large scale horticulture and fruit production, not small scale traditional corn production. Corn farmers, unable to compete with U.S. agribusiness, cannot make a living and are forced to migrate in search of work, threatening the future of the traditional rural sector in Mexico. Campesino activist Jesuus Leoon, founding member of CEDICAM (Center for the Integral Development of the Mixteca,) says that NAFTA and the current economic model are a “…new colonization; the invasion of our markets with imported products, and the destruction of our natural resources and the exploitation of indigenous peoples and small farmers…this invasion is another form of colonialism like we saw from the Spanish 500 years ago.”

As always, the poor, mostly indigenous farmers bear the brunt of these policies. In fact, during the 14 years of NAFTA, 2 million agricultural jobs have been lost and each year 300,000 Mexican agricultural workers migrate to the U.S. Despite the U.S. Department of Agriculture’s continued claim that NAFTA is “…one of the most successful trade agreements in history” which “has benefited farmers, ranchers and consumers throughout North America,” Mexican civil society sees another reality. “With NAFTA there are losers and winners; those who benefit are the large agribusinesses like Cargill and Maseca, while the losers are the 2.5 million farmers that plant corn and beans,” laments Miguel Colunga from the Frente Democratico Campesino.

Aside from the continued devastating long-term impacts expected on the agricultural sector in Mexico, there will be immediate tangible impacts from the liberalization of corn and beans in 2008. A report released by a migration working group from the Mexican House of Representatives shows a potential rise of as much as 10% in undocumented immigration to the U.S. and Canada during this year alone. The report points out that with the full implementation of NAFTA and the almost 50% decrease in farm subsidies over the past decade, the remaining Mexican corn and bean farmers will be at such an obvious disadvantage that over 600,000 will cross the border in 2008 (as compared with a previous average of 550,000).

A recent World Bank study ranked Mexico as the number one exporter of migrants in the world, with remittances at an estimated $25 billion for 2007. As the No Corn, No Country campaign states, there now exists “a perverse, inhumane, and irrational logical of exporting small farmers ot the U.S. and importing food products.”

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RAISE AWARENESS

(Taken from the CAFTA Briefing Packet, by the Washington Office on Latin America (WOLA)

In an attempt to stay afloat amidst an influx of cheap US goods, some Mexican farmers – particularly those who farm corn – have changed their farming and land-use practices. Many of these shifts have taken a toll on the environment in areas under agricultural production. Large corn producers in Mexico have increased their use of pesticides, herbicides, and fertilizers in an attempt to raise yields. According to a study commissioned by the World Wildlife Fund, these inputs, along with intensified tillage and increased use of water resources, have had a negative environmental impact and have contributed to rapid soil degradation and erosion. Some small farmers have diversified their incomes through the addition of grazing animals; the overgrazing of land previously fallow or under cultivation, or the clearing of forests for pasture, both have negative environmental impacts.

Environmental Impacts of CAFTA

(Taken from GlobalExchange.org)

by Deborah James
U.S.-based Harken Energy Company wanted to exploit oil off the coast of Costa Rica, a country known for its long history of democracy as well as its pristine natural parks and natural resources. But the Costa Rican government denied the permit because the oil exploration would negatively impact Costa Rica's environment. Harken attempted to sue the government for $57 billion -- more than the country's entire GDP. The case was eventually settled in local courts. But if CAFTA is approved, Harken would have the right to sue the Costa Rican government for expropriation. Then the Costa Rican people would be left with two options: let Harken drill for oil and damage the environment, or pay them potential lost future profits.

For decades, governments have worked together through the United Nations to develop agreements to protect the natural resources of our shared planet. Unfortunately, so-called "free trade agreements" threaten to erode many of the advances in global environmental protection, endangering our planet and the natural resources necessary to support life. The North American Free Trade Agreement (NAFTA) and certain agreements of the World Trade Organization (WTO) were written to prioritize rights for corporations over protections for our shared environment.

But rather than being repealed, corporate interests are negotiating the expansion of these corporate rights. The U.S.-Dominican Republic-Central American Free Trade Agreement (CAFTA), soon to go before Congress, and the proposed Free Trade Area of the Americas (FTAA), currently in negotiations, are modeled on NAFTA. In addition, negotiations are proceeding within the WTO to expand many of its policies.

These new agreements threaten global biodiversity, would accelerate the spread of genetically engineered (GE) crops, increase natural resource exploitation, further degrade some of the most critical environmental regions on the planet, and erode the public's ability to protect our planet for future generations.

No Protections for the Environment
Neither CAFTA nor the FTAA require member countries to adopt internationally recognized standards for environmental protection. Nor does either agreement ensure that member countries don't lower or waive their existing environmental laws in an effort to attract investment. What's more, rules in CAFTA and the FTAA would actually prohibit member countries from enacting many new environmental regulations, allowing those regulations to be challenged as "barriers to trade." This strips the public from a fundamental democratic right to pass laws that protect our environment in favor of corporations' "right" to profit from environmental destruction.

Mega-Diverse Countries
Latin America is one of the most biologically and culturally diverse regions on the planet. Four of the five Central American countries included in CAFTA have tropical areas that have been identified as "critical regions" for their biodiversity. Additionally, 7 of the world's 12 "megadiverse" countries, (Mexico, Brazil, Venezuela, Peru, Ecuador, Costa Rica and Colombia) are found in the Americas. "Mega-diversity" countries represent the majority of the world's biodiversity and surviving Indigenous peoples, the true guardians of biodiversity. Unfortunately, so-called "free trade" agreements directly contradict important international legislation designed to protect the rights of Indigenous peoples and biodiversity, like the Convention on Biological Diversity as well as the International Labor Organization Convention 169, which states that Indigenous groups must be consulted on issues that affect their rights to land and livelihood.

Piracy of Global Biodiversity
In the last decade, the biodiversity of the Americas has been targeted by "life science" corporations (the growing consolidation of pharmaceutical, agrichemical and seed companies) in search of "green gold." These corporations are pillaging humankind's patrimony of traditional knowledge and biodiversity to create and patent drugs and agricultural products to sell for profit. The quest to patent life forms, especially medicinal plants and crops, threatens our food security, access to healthcare, and the biological and cultural diversity of the Americas.

Intellectual property rules in CAFTA and the FTAA would require that member countries grant protections to the patenting of life forms. This would facilitate a massive increase in "bioprospecting" or the practice of corporations patenting Indigenous communities' knowledge of plants and then profiting from that knowledge -- while forcing Indigenous communities to pay for what they had previously held in common.

No GE Food Labeling
Despite the fact that independent polls in virtually every country on the planet demonstrate that people want genetically-engineered (GE) foods labeled, corporations and the U.S. government have refused to do so. Giant agribusiness multinationals ADM and Cargill have generally refused to segregate GE from non-GE crops, eliminating consumer choice and imposing GE foods on consumers. With CAFTA and the FTAA, labeling laws would be prohibited as "more burdensome than necessary" for agribusiness investors.

More GE Contamination
Dozens of crops have been developed and domesticated in the Americas over the last 10,000 years, including corn and potatoes, two of the world's most important crops for food security. The traditional cradles of food diversity are threatened by encroaching genetic contamination. The experience of Mexico under NAFTA offers an example of what's to come for Central America under CAFTA. NAFTA forced open protected Mexican corn markets to a flood of cheap imports of corn from the U.S. Corn imports into Mexico have displaced at least one and a half million farmers and are steadily eroding the genetic diversity of thousands of native corn varieties. Then, in September 2001, genetic contamination of native corn varieties was discovered as a result of the introduction of artificially low-priced GE corn from the United States under NAFTA. The expansion of GE crops threatens food security around the world.

CAFTA and the FTAA completely disregard international law, such as the Cartagena Protocol on Biosafety, designed to regulate the cultivation and trade of genetically modified organisms.

“Chemical Reactions”: A WOLA Report on the Failure of Anti-Drug Fumigation in Colombia

Intensive aerial herbicide spraying of coca crops in Colombia has backfired badly, contributing to the spread of coca cultivation and cocaine production to new areas of the country and threatening human health and the environment, a report released today by the Washington Office on Latin America (WOLA) shows.

Aerial spraying, or fumigation, has been a central part of U.S. drug control policy in Colombia for nearly a decade.  The new report, "Chemical Reactions," shows that after fumigation of more than 2 million acres of the Colombian countryside, coca cultivation and cocaine output remain undiminished.  The dispersal of coca and cocaine production is exacerbating threats to biological diversity in Colombia, one of the most ecologically rich countries on the planet.

"Fumigation is part of the problem," the report says. "The aerial spray operations tend to reinforce rather than weaken Colombian farmers' reliance on coca growing, prompting more rather than less replanting, thereby contributing to coca's spread into new areas of the country."

U.S. aid to Colombia has totaled more than $5 billion since 2000.  As fumigation intensified with an infusion of U.S. funds, officials portrayed the spraying as not merely innocuous to human health and the environment, but as environmentally beneficial because it would inhibit the loss of forests to coca crops.  On the contrary, the WOLA report shows that:

• Fumigation pushes coca growing into new areas, spreading the ecological destruction that coca growing entails.
• The adverse effects on human health and the environment due to exposure to the spray chemicals may be considerably more severe than has been officially acknowledged.

By pushing coca growing into new zones, fumigation also contributes to spreading the violence and corruption associated with drug production to more and more regions of the country.  Since 1999, as the spray program escalated, coca cultivation spread from 12 to 23 of Colombia's 34 departments.  Afro-Colombian and indigenous communities have been particularly hard hit by coca's dispersal, the depredations of illegal armed actors involved in the drug trade, and the damage caused by fumigation.

"If you listen to the State Department and the drug czar's office, the problem with fumigation is that we haven't done enough of it.  But fumigation is not merely ineffectual, it is counterproductive.  Persisting with it will only add to the damage," said WOLA Senior Associate John Walsh, the report's lead author.

Rather than continue on a counterproductive course, the report urges the U.S. and Colombian governments to refocus their drug control efforts on rural development, while targeting enforcement at drug traffickers and criminal organizations, not peasant farmers.  Cooperation with affected local communities is crucial to designing viable economic alternatives suited to their cultures and to local ecosystems.

Among the report's details:

• The number of hectares fumigated in Colombia climbed from 60,700 in 1999 to 172,000 in 2006.  (One hectare is equal to 2.47 acres.)
• In the same seven-year period, the area under coca cultivation in Colombia rose from 122,500 hectares to 157,200 hectares, according to U.S. government figures.
• Cocaine production in Colombia rose from 617 metric tons in 2001 to 640 metric tons in 2005, according to UN figures, despite an increase in fumigation every year during that period.

A widely-cited study by the Organization of American States that found fumigation to pose only small risks to human health and the environment has come under sharp criticism from researchers for its lack of relevant field research, failure to assess economic and social impacts, and other shortcomings.

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PROMOTE FAIR TRADE

(taken from Fair Trade Resource network)
www.fairtraderesource.org

In alternative trade organizations, “Fair Trade” is about more than just paying a fair wage. It means that trading partnerships are based on reciprocal benefits and mutual respect; that prices paid to producers reflect the work they do; that workers have the right to organize; that national health, safety, and wage laws are enforced; and that products are environmentally sustainable and conserve natural resources.

In North America, there are many Fair Trade craft products available–decorative home accessories, jewelry, textiles, etc. Fairly traded coffee, tea, and chocolate are also widely available, and we are starting to see an influx in fair trade produce, most notably bananas. Items, such as Fair Trade sports balls and apparel, are also starting to appear.

Shopping Fair Trade

How do I know that a product is Fair Trade?

Some Fair Trade products, like coffee and chocolate, are Fair Trade Certified ™ and carry a label or “seal.” For other products, like handcrafts, there is not a certification system.

The following concepts are helpful in understanding the difference between certified and non-certified products. It is important to know that the goal of Fair Trade is to empower low-income artisans and farmers to better their lives. This mission drives Fair Trade. Although a label can be an important indicator of this aspiration for farmers, looking beyond a label leads to a vibrant world of Fair Trade artisans and craftspeople.

The TransFair label is currently only for food products. The Fair Trade Certified ™ logo is an independent certification that adheres to monitoring criteria and standards set out by the Fairtrade Labeling Organization.

Since 1997, FLO has established common principles, procedures and specific certification requirements for Fair Trade. Currently FLO only certifies commodities. The reasons are numerous and complex, but in general relate to the fact that “The very variety of handcrafted items are their strength… unique handcrafted items are not subject to direct comparisons with regard to price and performance.” (Fair Trade Yearbook, p. 159)

Fair traders of handcrafts work directly with artisans to guarantee Fair Trade standards (see What is Fair Trade?). Fair Trade Organizations (FTOs, also known as Alternative Trade Organizations, ATOs) work with low-income artisans to market their products and build their businesses.

FTOs, many of whom are members of organizations like the Fair Trade Federation (FTF) or the International Fair Trade Association (IFAT), adhere to Fair Trade criteria including workers’ pay, environmental practices, and good working conditions. When you purchase home furnishings, clothing, or crafts from FTOs, particularly those reviewed by national and international associations like FTF and IFAT, you can be certain that Fair Trade principles were respected. Consumers also know they they have purchased a unique item representing not only the talent of the artisan–often a woman from a developing country–but also the culture and traditions of the source country.

Consumers in search of Fair Trade products have a vast array of products to choose from. The Fair Trade Certified label and membership in associations like FTF and IFAT help identify Fair Trade products that are produced according to Fair Trade standards. Looking beyond the label to the trading relationship, consumers can identify FTOs that offer access to high-quality crafts and entry points into the way of life of other people.

Fair Trade Stores in St. Louis:

MacroSun International
Plowsharing Crafts

Manchester Methodist Church holds a Fair Trade Faire  in November
Contact Kelle Sikes:  ksikes@pioneer-technologies.com

May 9 is World Fair Trade Day

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COLOMBIA FTA

Why should Colombia’s human rights record enter into debate about a trade agreement?

Colombia is widely recognized as having one of the worst records on human rights protection in the Americas. Passage of a trade agreement will eliminate any leverage the U.S.government has to pressure the Colombian government to improve respect for human rights and the rule of law.  Since the Colombian and U.S. governments signed the trade agreement in November 2006, rates of killings by security forces and rightist paramilitary groups that have been linked to government officials are reported by some sources to have declined. But the numbers are still very high and not enough to warrant passage of a trade agreement. Attacks against human rights defenders, trade unionists, indigenous leaders and Afro-Colombian leaders continue with impunity.

In only the first 11 days of March 2008, four trade unionists were killed. That same week human rights groups had their offices ransacked and their equipment stolen.  Since the beginning of 2008, a total of 12 trade unionists have been killed.  In addition, extra judicial executions are occurring an alarming rate with recent cases reported in the areas of Valle del Cauca, Cauca, Meta, Putumayo and Nariño. Since the beginning of March, numerous national and international human rights organizations have received death threats from a notorious paramilitary group, the Black Eagles. 

Will the trade agreement improve the plight of Internally Displaced People in Colombia?

With an estimated 3.8 million internally displaced persons (IDPs), Colombia contains the second largest IDP population in the world, after Sudan.  People have been displaced due to the armed conflict and forced off land by powerful economic interests.  Afro-Colombians and indigenous populations account for a disproportionate number of the total IDP population, with an estimated 79% of Afro-Colombians who lived on collective territories being forcibly displaced from them.  WOLA believes that passage of a trade agreement is likely to accelerate violent land expropriation to benefit agro-export crops such as palm oil, which would benefit from the trade agreement.  WOLA also believes that the high levels of violence and impunity that characterize areas where forced displacement has occurred would make any other economic activity in these areas extremely difficult. Before a trade agreement is approved, the Colombian government must take more concrete steps to prevent and protect people from displacement, and to protect the rights of those displaced. 

Will the Colombia trade agreement reduce poverty?

WOLA believes that any trade agreement with Colombia must make the reduction of poverty and improving the livelihoods of the most vulnerable sectors as important as the trading of goods. In Colombia, 65% of the population lives below the poverty line. In rural areas, that figure reaches 80%. Under the proposed trade agreement, Colombia will cut tariffs on many basic agricultural goods and open its markets to heavily subsidized U.S. agribusiness imports.  Similarly, duty-free access to the United States for cut-flowers and other agro-export products will encourage agribusiness plantations to increase production for export.  Both agribusiness expansion and imports of agricultural goods will displace rural Colombian workers from their lands, worsening unemployment and poverty levels.  This trade agreement will hurt the rural poor and has no mechanism designed to prepare them for competition with cheaper subsidized goods produced by U.S. farmers. 

Will the trade agreement strengthen local and regional development? 

Foreign direct investments can be a critical tool in stimulating local and national development.  However, like other trade agreements before it, the Colombia agreement prioritizes protections for foreign investors over domestic development needs, weakening the government’s ability to determine and implement national development strategies. “National Treatment” provisions stipulate that governments treat foreign investors at least as well as domestic ones in government procurement bids.  Consequently, the government will be unable to favor established or nascent industries with ties to local communities.  Nor will the government be able to impose performance requirements which force foreign investors to create forward and backward linkages within a country’s economy, purchase supplies locally, or employ specific populations such as women or Afro-Colombians. WOLA believes that national needs must take priority over foreign investment rights, and the government must retain the policy flexibility necessary to determine the development strategies that its country needs. 

Will the Colombia trade agreement strengthen democracy?

The Colombia agreement includes the same controversial Investor-State Dispute Mechanisms included in NAFTA and other trade agreements.  As drafted, the dispute mechanism allows foreign corporations to sue for perceived violations of their rights and loss of future profits.  Foreign investors can demand compensation when, for example, public-interest laws prevent them from conducting business or when a community democratically decides not to allow a business practice in their area.  Since NAFTA’s implementation, investors have used this provision to challenge public interest laws and local governance processes.  An example of a law that would be threatened is the 1993 Law 70 in Colombia which mandates that government invest in the socio-economic development of Afro-descendants and protect their cultural identity and civil rights in order to preserve their ancestral territories.  Decades of violence and corruption have already severely undermined democracy in Colombia.  WOLA believes that any trade agreement must guarantee legitimate democratic practices and safeguard laws and regulations that protect all Colombians. 

Will failure to pass the trade agreement pose a national security risk?  

During a recent hearing before Congress, Admiral Stravridis, head of the U.S. Southern Command said, “As your national security adviser in that region, I will tell you that it is very important that the free trade agreement be passed from a national security perspective.”  No one in Latin America doubts U.S. support for Colombia.  However, WOLA believes that there is not a national security rationale for passing the trade agreement with Colombia and that a strong argument to the contrary can be made.  If this agreement follows the course of previous agreements, small agricultural producers will be displaced.  Agriculture is the third most important sector in terms of employment. More than 20% of Colombian workers depend on agriculture for their livelihood, with higher figures for Afro-Colombians and indigenous peoples. The Colombian Ministry of Agriculture and Rural Affairs conducted a study of the effects of liberalization on nine primary agricultural products and found that full liberalization would lead to a 35% decrease in employment (RCALCA resolution, December 12 2005).  

The question should be “What will happen to those displaced by this trade agreement?” In February 2006, an editorial in The Washington Post warned that the “rural dislocation that would follow from ending all protection for Colombian farmers could undermine the government’s efforts to pacify the countryside. If farmers can’t grow rice, they are more likely to grow coca.”  (February 17, 2006, p. A18).   In addition, forced displacement can contribute to individuals joining illegal armed groups, both on the left and right. In July 2004, the Colombian Minister of Agriculture addressed displacement and the potential impact of the trade agreement saying that “the FTA would give small farmers little choice but “migration to the cities or other countries (especially the U.S.), working in drug cultivation zones, or affiliating with illegal armed groups.”  Physical and economic displacement as a result of the trade agreement will cause greater problems for the Colombian government and invite even greater U.S. militarization in the region.

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