FTAA Ship Runs Aground, But Party Goes On

At the Miami FTAA summit last week, a festive cruise ship full of trade ministers and lobbyists ran aground for several hours on its voyage to a plush island resort. Eventually the ship was salvaged and the partying continued, much to the relief of the host committee.

It may have been symbolic of the week's events.

A huge but empty trade agreement -- widely described as "FTAA Lite" -- was all the US could achieve after being buffeted for weeks by rising fair trade winds. But the jolly ship of neo-liberalism was salvaged in Miami rather than torpedoed, receiving life support from its most formidable critic, Brazil, and causing confusing challenges for the global justice movement in its wake.

Fair trade leader Lori Wallach, her voice nearly broken, summed up the dilemma at a rally at Miami's Bayfront Park last Wednesday. "The good news is that the US-Bush expansion of NAFTA has been pushed back and derailed. The bad news is that the boneheads and their client governments are still on their mission. We can't let this happen. This is an avoidable disaster. We are stuck with NAFTA and the WTO, but this one is avoidable. We've got to go back and do the hardest work, electing people who represent us."

Global Exchange co-founder Medea Benjamin also emphasized a positive spin as well. "These trade ministers went away hungry. The agreement was a buffet with no nutrients." Then, shifting to another metaphor used by critics, she added that, "The FTAA train left the station, but the boxcars were empty."

Several questions remain to be sorted out: the content of the agreement itself, whether it can be revived, and why Latin American countries unanimously supported further negotiations, seeming to ignore or marginalize social movements in their own countries.

Empty Boxcars

As veteran New York Times trade correspondent Elizabeth Becker wrote before Miami, the US agenda was "to avoid another debacle" like Cancun, where the September WTO meeting was derailed by a new bloc of countries including Brazil, India, China and South Africa, demanding greater access to US markets especially for their agricultural products.

The Bush Administration resisted any reductions in its protectionist agricultural tariffs (and steel tariffs as well), a gesture to its critical electoral support in the farm belt. For example, Gov. Jeb Bush's citrus growers would have gone ballistic at any reductions of their 28.7 cents-per-gallon tariff against Brazil's imported orange juice. (NYT, Oct. 28) While yielding nothing on tariffs, the US and the European Union demanded greater privatization and deregulation for their corporate investors, an agenda that was shunned by Brazil and its allies. To the ire of the US, the Cancun meeting collapsed abruptly, and shudders traveled through the corporate and political worlds.

Showing that markets are really a function of politics, the US was determined to assure a diplomatic "victory" for its trade agenda in Miami. To fail again would be comparable with the US debacle in Iraq going into an election year in which voters in Iowa, New Hampshire and South Carolina (for starters) are so angry that the Democratic presidential candidates are being forced to talk about "fair trade" after a decade of liberal fantasies about NAFTA and the WTO.

The scaling back to "FTAA Lite" was a "severe disappointment" to US corporate lobbies, according to the Financial Times. The "opt out" provision, by which countries could pick and choose which rules to follow, was a "cop out," business lobbyists told the Miami Herald. The New York Times editorial board condemned the Bush Administration's "shocking" betrayal of the editors' apparent dream of a "more muscular trade deal." (Ever since Lori Wallach dubbed the FTAA "NAFTA on steroids," the drug analogies keep popping up.)

Indeed, the 350-page draft agreement includes 5,000 bracketed items --policies drafted by staff for which there is no consensus so far. The ministers left it untouched. Instead, they spent their first morning listening to irrelevent reports by United Nations agencies, then to droning testimony from inter-American labor ministers. Finally, about mid-afternoon Thursday, US trade representative Robert Zoellick offered the low-key suggestion that the meeing should finish one day early since many ministers seemed to want to leave.

The 350-page draft remained unopened. If anyone had insisted on debate or consensus, the FTAA would have collapsed. As one observer said of the bizarre scene "it was so fragile it could come apart on any detail. Everyone was scared shitless of putting new issues on the table."

When the Venezuelan delegate raised the question of how the FTAA would reach its January 2005 deadline, the US and Brazilian co-chairs became visibly upset. The meeting then adjourned, some 30 hours ahead of schedule.

So the US avoided an election year embarrassment. But it also was reacting to a new Latin America. Events ranging from the Zapatista insurgency to the elections of progressive nationalists in Brazil and Argentina, to the recent overthrow of the Bolivian government are reflections of a hot current of anger running through the continent against neo-liberal policies. Instead of the North American colossus swallowing Latin America, there is an indigestible populist nationalism that will not be bullied or bought.

The US may prefer in the short-run to focus on bilateral trade agreements with "several compliant nations," but the state is set for a serious showdown with Brazil, Argentina and other nationalisms rising to the surface.

Is Brazil Reversing Course?

There was euphoria last year when Luiz Inacio Lula da Silva and the Workers Party came to power in Brazil. It was the most significant electoral triumph for the Latin American left after three decades of military dictatorships. Lula campaigned against the FTAA as an "annexation" of Latin America by the US.

Now the Brazilian government co-chairs the FTAA with the United States, and was the key player in keeping the negotiations alive in Miami. Only weeks ago, the US was condemning Brazil for being a spoiler in Cancun and threatening a coalition of "can do" nations against the "won't do" bloc. Yet there was Robert Zoellick cooing in Miami alongside his Brazilian counter-part, left-wing foreign minister Celso Amorim. The Brazilian had chosen a word in English -- "enabling" -- to describe the agreement to keep the talks alive, and Zoellick couldn't agree more. "It's a great word," he chipped in.

One unofficial Brazilian insider explained that, "We were counting on resistance from the US to the Brazilian proposal, but they decided to accept it. This puts our social movements in a difficult position, because Brazil will accept the FTAA "model" even if it does not include all the issues, and the FTAA official schedule also. So our campaign will have to make difficult decisions soon."

Hearing this evaluation, I was reminded of a conversation with another Brazilian nearly one year ago amidst the jubilation over Lula's victory at the World Social Forum in Porto Allegre. "Brazil does not want an ideological confrontation with the United States," referring to Cuba and Venezuela. What then of Lula's denunciations of FTAA on the campaign trail? "We will negotiate and hope the FTAA will eventually go away."

Lula's government has proved disappointing to the left already. The 1.5 million member landless movement is demanding he deliver on promises of land reform. (see NYT, July 27). Lula's government has reversed its promise not to allow the planting of genetically modified crops, giving in to Monsanto. (NYT, Sept. 28). Lula is planning pipelines and dams in the Amazon, enraging Brazil's environmentalists. (NYT, Nov. 22. WSJ, Oct.11)

It is too early, and perhaps inappropriate, for the global justice movement to pass judgement on Lula's government, but his strategy seems to arise from his historic experiences as a tough union negotiator, which alternated from strikes to compromises to victories. His civil service is thoroughly trained in assessing Brazil's national interest amidst the world balance of power. His formidable political team includes longtime underground strategists turned diplomats.

The Brazilians are well aware that their electoral triumph was helped hugely by $30 billion in loans from the IMF (which represents the Bush Administration), which critics on the left questioned at the time. But Lula also knows that the politics of debt are double-edged: Citigroup, Fleet Boston, J.P.Morgan Chase and General Motors badly needed the roll-over for their Brazilian investments as well.

Lula has made a priority of building a strategic alliance to balance the US and the EU within the trade negotiations. Brazil led the creation of the "G-22" at Cancun to offset the wealthy G-7 bloc. He has proposed cuts in global armaments spending to feed the hungry. Brazilian negotiators have cultivated China's vast soybean market as an alternative to the US and Europe. And with his closest ally, President Nestor Kirchner of Argentina, he has drafted a "Buenos Aires Consensus" to challenge the "Washington Consensus" of privatization and deregulation. The joint declaration with Argentina, stressing jobs and fair trade instead of profits alone, is as close to an "ideological confrontation" as Lula has come.

Perhaps Lula's strategy will cause the FTAA to implode from within eventually, without Brazil taking the retaliatory blame. But it is equally likely that Brazil and the US will pursue an ultimate deal along the lines of a labor-management negotiation, with the hemisphere under an expanded US corporate dominion. The labor-management model under capitalism may improve export industries in the developing world but leaves democracy in a weakened state and non-governmental advocates at the margins.

Lula and Kirchner at this point represent competing nationalisms-- representing their national business interests as well as labor interests -- against those of the United States and Europe in a single system of global capitalism, not a separate trading bloc based on an alternative economic system. To the extent that they are socialists, they are market socialists, which raises understandable concerns among socialists without power.

Hardline global justice activists have seen this process unfolding in South Africa. There the international financial barons retreated under heavy pressure from their long-standing support of apartheid. They were forced to be supportive of Nelson Mandela's release from Robben Island and the electoral transition of the African National Congress to political power in 1994.

In turn, the ANC government immediately adopted neo-liberal economic policies, turned its back on promises of wealth redistribution, privatized its mining industry and utilities, and left behind many of its once-ardent supporters in the black townships. Within a decade, a new stage of struggle was being opened in South Africa by workers and communities calling themselves "the poors," who faced displacement, wage cuts, unemployment, and water and electricity shut-offs amidst the rise of a new black oligarchy.

Both "new South Africa" and "new Brazil" contain business classes long submerged under apartheid or military dictatorship. Their form of nationalism, while far preferable to direct oppression, does not automatically include a class sympathy with their own dispossessed, and so the national liberation phase unfolds into new class and community alliances. The global justice activists who participated in the anti-apartheid or anti-imperial movements suddenly find themselves in a quandary. Can they be in solidarity with the Brazilian government against US agricultural monopolies but also on the side of the landless movement against Lula's inadequate land reform? In solidarity with black South Africans seeking to end white privilege while also standing with "the poors" against unaffordable rents and rates?

A similar dilemma confronts US activists around the 2004 election. The defeat of George Bush is a near-universal desire, but with whom? A Democratic Party that invented NAFTA? Candidates who blow with the trade winds? Is steadfast opposition in the streets the only choice? Are writers like Naomi Klein and Noam Chomsky essentially correct in diagnosing politics as a dead-end? Or is a strategy based on the streets in danger of being trapped in a cul-de-sac while the real fights occur inside the negotiating arenas? Should the global justice movement look favorably on a fair trade alliance with potential nominees like Howard Dean or Dick Gephart?

These are not easily answered questions. What is clear is that the US is being forced to retreat, at least for the election year, from its once-triumphal unilateralism in both Iraq and Latin America. Like the Miami negotiations, victory and defeat become harder to distinguish, and that is a great difficulty for a movement built on principled opposition.

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