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NAFTA, the FTAA and ... the PPP?

The latest spoonful of "free trade alphabet soup" being served in the Americas is the PPP -- the Plan Puebla-Panama, a trade ploy that may forever change Mexico.
 
 
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A wide toll highway and modern railroad tracks cut across the country, through coastal marshland, dense rainforest and mountainous highlands where small fields of blue agave and corn cling to the steep hillsides. Peasant farmers who live in the small towns along the way glance up as the trucks and trains thunder by, gazing at the trucks and boxcars full of cheap clothing made in China, electronics made in Japan, oil drilled in Colombia, shrimp farmed in Oaxaca and lumber from Chiapas, bound for northern Mexico, the United States, or beyond.

Some of the peasants linger along the side of the road, trying to sell tortillas or mangoes to the drivers. But the drivers, on a tight schedule delivering goods and raw materials for multinational companies, rarely stop or even slow down.

When the peasants sit down for dinner at night, eating totopos and beans and hearing the vague rumble of the trains and trucks in the distance, they might talk about the changes of the past few years. About the relatives and friends who have migrated to the U.S. looking for work, because the free flow of cheap Illinois corn, Florida oranges and other U.S. products into Mexico has made it even harder for Mexican farmers to sell their goods to their own neighbors. Or because the land where they used to farm has been leveled for eucalyptus plantations or maquilas (factories).

They might talk about the fishermen they know in the coastal towns, who are one by one leaving the sea for factory jobs because the ocean-dwelling shrimp they catch with nets cannot compete on the market with the industrial shrimp farms. These farms now cover thousands of acres of land in the area, acres that once hosted tangled, thriving mangrove ecosystems but now leak a stinking mix of chemicals and shrimp excrement into the surrounding lagoons.

If they are Mixe, Mixteca, or one of the other indigenous groups in the area, they might tell stories about the past, when they still lived on their traditional land, now claimed for the highway, railway, eucalyptus and maquilas. They might also share legends of the countless strange and beautiful plants and animals of the Chimalapas rain forest, which is steadily being eaten away by the mass development going on around and inside it.

Free Trade Nightmares

Such despondent images sum up many people's worst fears for the future of Mexico -- in this case, for the lush Isthmus of Tehuantepec -- in the face of the swelling tide of free trade and corporate globalization.

In the seven years since the North American Free Trade Agreement (NAFTA) took effect, gloomy images abound. While imports from Mexico to the U.S. are up by several billion dollars, the number of Mexicans living in extreme poverty is up as well -- 79 percent of Mexicans now make below the poverty level of $7.50 a day. Poverty has increased particularly in agrarian areas as corn, coffee and other products imported from the U.S. can be bought more cheaply in Mexico than locally-grown products, due in part to the fact that U.S. produce relies largely on mass farming methods and, thanks to NAFTA, no longer faces import tariffs. Rising waves of people have migrated to the U.S. in search of work as their local economies steadily deteriorate.

Over the past year, the Free Trade Area of the Americas (FTAA) agreement, which would essentially expand NAFTA to the entire Western hemisphere, has come closer and closer to reality, despite the massive protests against it during the Summit of the Americas meeting in Quebec City in April.

Now, the latest spoonful in this multi-course free trade alphabet soup is being served to the residents of Mexico and Central America, though as with the FTAA, many people there still don't know what they're being asked to eat.

This most recent offering is the Plan Puebla-Panama (PPP), a pet project of Mexican President Vicente Fox that was introduced in September 2000 and treated, privately, as one of his top priorities over the past year. The plan follows in the footsteps of several grandly-named plans before it: former Mexican president José Lopez Portillo's Alpha Omega plan of the late '70s and former president Ernesto Zedillo's Trans-Isthmus Megaproject of the '90s. But with a characteristic bigger-is-better approach that he must have honed in his time as a Coca Cola executive, Fox has taken the idea to a whole new level.

All of these plans essentially aimed to create a new "dry canal" transportation corridor through southern Mexico, something to lure and facilitate the burgeoning wave of inter-American trade, and to serve as an alternative to the increasingly backed-up Panama Canal for trade between Asia and North America.

The Isthmus of Tehuantepec, the narrowest point in Mexico with the state of Oaxaca on the south side and Veracruz on the north side, has been a major trade corridor since before the Spanish conquest. Through the centuries it has always been crucial, not only as a trade corridor but as an area wealthy in natural resources and biodiversity. In fact, the Chimalapas jungle on the isthmus is ranked first in biodiversity in the country, with more virgin forest than the Lacondon jungle in Chiapas. The oceans and lagoons off the isthmus have historically been rich in fish and shellfish, just as the earth below has been rich in minerals and oil.

Despite this natural wealth, the area has been relatively slow to develop economically, perhaps because of the stifling tropical heat, past epidemics of yellow fever and other diseases and the high population of indigenous people who retain strong constitutional rights to their land. It's easy, then, to see why successive presidents and swarms of businessmen have seen the isthmus as a jewel ripe for exploitation.

The Alpha-Omega and Megaproject plans focused for the most part on the isthmus and surrounding land. The PPP, however, takes the vision further. As the name suggests, the scope of the project ranges roughly from Panama to the central Mexican state of Puebla, and probably beyond. Though the plan was hatched and is orchestrated by Fox, it goes hand-in-hand with similar plans being plotted and implemented in other Central American countries, most notably Nicaragua and El Salvador.

Even though non-governmental organizations and community groups have dedicated long hours to study of the project since it was announced, and though there is a 300-plus page report about it on the Mexican government's web site, specific information about the PPP is hard to come by. The overall spirit of it is clear, however, and there is no doubt about some of the major factors the plan would entail.

The heart of the project would be the "dry canal," a modern highway and high-speed rail cutting through areas that are now traversed only by winding, narrow roads and rocky dirt paths.

The Dry Canal

The "canal" would be lined with maquilas, industrial shellfish farms, plantations, petrochemical operations, lumber concessions and mineral excavations, drawing on the area's rich natural resources and the potential cheap labor available throughout Mexico's small towns and indigenous communities. The canal would provide immediate transport for eucalyptus lumber and mass-produced shrimp and maquila goods. The farms would largely be cultivating non-native species of shrimp from the Philippines and other areas, driving local shrimp fishermen out of business and possibly infecting local populations with foreign bacteria. Similar farms which have already been built in the north of Mexico, but are much less prevalent in the isthmus, have destroyed hundreds of thousands of acres of mangrove ecosystems and polluted delicate coastal areas with their liquid waste.

The canal would also be used largely for transport of goods and raw materials that neither originate nor are sold in Mexico or Central America -- goods made cheaply in Japan and China on their way to the U.S. or Canada, for example.

While some of the projects connected with Zedillo's plan did materialize, including increased logging and oil exploration by foreign companies and a spate of road building in southern Mexico, for the most part both the Alpha Omega and the Megaproject stagnated.

But NGOs and business leaders alike feel confident that Fox's plan is close to fruition. The plan was the major focus of the "Concertacion Tuxtla" summit meeting of Central American presidents and Vicente Fox in San Salvador on June 15.

At the summit, the Interamerican Development Bank announced its commitment to leading the search for project funding from the World Bank, the International Monetary Fund, national banks, corporations and private investors. According to Wendy Call, a journalist who attended the summit as part of her work on a fellowship for the Institute of Current World Affairs, specific funding for the project is slated to be announced this fall.

"Fox's PPP probably will be more successful in generating business interest in eight months than [Zedillo's] Megaproject was in five years," she said. "Fox has much more success with the World Bank and IMF than Zedillo did. He is being heralded as the man who will bring global capitalism to Mexico."

Many indigenous and human rights groups in southern Mexico say that despite their constant requests for information, the administration has been tight-lipped about the proposal.

"A lot of people don't have any idea what the PPP is," said Elba Flores Nunez of the Red de Derechos Humanos de Tepeyac (Tepeyac Human Rights Network) in Oaxaca. "State and federal government officials say, 'We don't know what you're talking about, the project doesn't exist.' But journalists from other countries have told us they posed as investors to meet with government officials and were given all sorts of information about the project. A man from Colombia said, 'How come we all know what the PPP is and you don't?' If this is supposed to be beneficial, why aren't they informing the population about what it is?"

The PPP's Effect on Indigenous People

Although the free trade aspects of the PPP would have ripple effects on people all over Mexico, and indirectly even in the U.S., the many indigenous groups that live in Chiapas, Veracruz and Oaxaca would be hardest hit. The isthmus has one of the highest concentrations of indigenous people in the country -- 30 percent of the total population, including Mixes, Mixtecas, Zapotecs and others. Oaxaca, which makes up the largest part of the isthmus, is home to 16 different indigenous groups as well as people of African descent who are considered indigenous. Rates of poverty, malnutrition and illiteracy are particularly high in Oaxaca, with more than 70 percent of the people living in extreme poverty.

Thanks to indigenous protections in the Mexican Constitution and an Oaxaca state indigenous rights law passed in 1995, much of the land in the isthmus is protected and owned by indigenous people. And most of this is in communal holdings, which makes it impossible for any one person to cede the land to the government or private corporations. The acquisition of indigenous land is one of the biggest hurdles the government will face in implementing the PPP, and one that is already being addressed.

The national "indigenous rights" law passed this spring by Fox and the majority of Congress actually does little to protect indigenous rights to land, according to almost all indigenous groups and advocates in the country. The law was voted down by states with high indigenous populations, including Oaxaca, Chiapas and Guerrero. The National Indigenous Rights Council, the EZLN [Ejercito Zapatista de Liberacion Nacional], and indigenous rights groups around the country have denounced it.

Oaxacan leaders note that the national law is especially dangerous because it supersedes the relatively positive Oaxacan state indigenous law. However, they note, that law is not always enforced either, and, regardless of legalities, the government and private landowners continue to use underhanded tactics to gain control of land.

"The government hasn't been giving people the titles to their land, so that it will make it easier for them to take it away for the highways they are building," said Nunez. "Communities are also being asked to donate some of their land, being told the highway will benefit them. People were thinking they could put up little stores by the highway and sell tortillas, walk their donkeys along the road. They don't realize this is a super-highway and they'll have no access to it."

Increased Militarization and Border Control

By driving down the prices of locally produced agricultural goods through free trade and destroying the environment for local farmers and fishermen, the PPP will doubtless cause many Mexicans to migrate to the U.S. in search of better-paying work. But ironically, one of the components of the plan, as stated at the meeting in San Salvador and at other points, is actually to decrease both migration into Mexico from Central America and migration out of Mexico to the U.S.

As part of selling the plan to the U.S., Fox has committed to help cut down on Mexicans immigrating to the U.S. This promise also includes an effort to keep Central Americans from immigrating to the U.S. through Mexico.

Proponents of the PPP suggest that it will create more jobs in maquilas, shrimp farms, eucalyptus plantations and the like, so Mexicans will have other opportunities besides immigration.

But opponents of the plan say that the positive effects of jobs created would be outweighed by the displacement and destruction of farming and fishing communities. They also say that the plan will inevitably entail increased militarization of southern Mexico. Naturally, the military will be brought in both to augment the southern border and to protect the industry and transportation projects.

Call points out that this will be a boon to Fox as far as Chiapas is concerned, giving him an excuse to increase military control in the surrounding area and destabilize indigenous power in general.

"Fox promised to resolve the situation in Chiapas," she said. "I think that is one of the main forces behind the plan."