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Derestricted Original: Spanish FTAA - TRADE NEGOTIATIONS COMMITTEE
As we explained at the Quito Ministerial Meeting, there
is an increasing awareness and growing concern in Venezuela of the effects
that the FTAA may have on the economy, politics, environment, culture,
labor, and human rights. Given the importance of decisions made in the framework
of the FTAA, the government of Venezuela is obliged to keep its citizens
informed about the implications of issues under negotiation in the FTAA.
This obligation is set forth in Article 73 of the Constitution of the
Bolivarian Republic of Venezuela, which states,
“International
treaties, conventions, and agreements that could compromise national
sovereignty or transfer power to supranational entities (…) shall be
submitted to referendum.” As Venezuela understands it, the FTAA is not merely a
trade agreement. While it is true that the objective is to create a free
trade zone, it is also true that what the negotiating groups are proposing
is the establishment of a supranational legal and institutional system
that will eventually prevail over the current system in our country.
Hence, a full awareness of the implications that the issues under
negotiation in the FTAA will have for national sovereignty is of crucial
importance to Venezuela. In fact, Article 153 of the Constitution states,
“(…) Rules adopted in the framework of integration agreements shall be
considered to be part of the body of laws currently in force and shall
apply directly and preferentially to domestic legislation.” Depending
on the way in which the FTAA Agreement is concluded, Venezuela could end
up having to “constitutionalize” the Agreement. Due to the implications
for sovereignty and democracy, the government of Venezuela is therefore
obliged to submit all matters related to this issue to referendum. For all of these reasons, we remain concerned about the
way in which negotiations have been conducted to date. We feel that the
TNC has yet to arrive at the decisions and agreements needed to ensure
that extensive information on the implications of the FTAA is provided to
our citizens in a transparent manner. As the negotiations proceed, there
is an ever greater and more urgent need to ensure that extensive
information on the implications of each and every one of the issues under
discussion in the negotiating groups is broadly disseminated. We must remember that the intention to guarantee
transparency in the negotiating process was affirmed at the 2001 Summit of
the Americas in Quebec. The demands made by social organizations
throughout the Hemisphere remind us that the moment has arrived to follow
through on this commitment. At the Quebec Summit, the president of the
Bolivarian Republic of Venezuela, Hugo Chávez, expressed reservations
about the dates set for concluding negotiations and inaugurating the FTAA,
as, in his opinion, more time was needed for, inter alia, the
dissemination of information and public debate. It must be recognized that FTAA negotiations are based
on a set of theoretical and political assumptions that have not been
discussed in sufficient detail by the people of our countries and their
respective social and business organizations. Consequently, these
assumptions cannot be interpreted as the result of a common consensus. For
these and other reasons, the Venezuelan government hereby proposes that
several of the issues underpinning the basic definition of the FTAA be
put, once again, to debate. Firstly, as a result of the crisis underway since the
military coup of 11 April 2002, Venezuela has a new appreciation of the
extraordinary importance of the need for governments to be able to draw on
a wide spectrum of public policies to respond to crises (whether
environmental, political, or economic), as well as to be able to tackle
the challenges and demands associated with fair, sustainable development.
The commitments and disciplines assumed under the Agreement will severely
restrict the ability of countries to implement, as national interests
warrant, many of these public policies in a sovereign and democratic
manner. The implications of the following could be particularly
devastating: prohibitions regarding performance requirements, restrictions
on using government procurement to promote national development goals, the
liberalization of all public services (which, in Venezuela’s case, would
make it difficult to comply with constitutional obligations to Venezuelan
citizens in critical areas of social policy and access to public services)
and the issue of regulations being discussed in the context of
liberalizing agriculture, which could also hinder Venezuela’s ability to
comply with the constitutional mandate to promote policies aimed at
ensuring food security for the country. The recent sabotage of PDVSA, the national oil
industry, is a pathetic example of everything stated in this document.
This action was no more than the violent reaction of the oil industry’s
aristocracy to the Venezuelan government’s decision to regain control of
the country’s main industry. In other words, the opening up and
liberalization of PDVSA catapulted Venezuela into becoming a participant,
ahead of time, in the proposal for a fully liberalized, global world.
Previous governments took Venezuela to the WTO without reserving any
special rights regarding its oil. According to the vision that previously
governed PDVSA and which was finally overthrown, the only advantage of
having natural resources was to be limited to attracting investment and
was not to be a force for driving the nation’s economic and social
development. With this approach, PDVSA opened its doors to transnational
capital and very quickly renounced its right to use its extraordinary
purchasing power to ensure markets for its national industry, which was
consequently replaced as the main petroleum supplier. And to top it all,
the oil industry’s liberalization was coupled with the relinquishing of a
previously existing right that required foreign investors to transfer
technology and provide technical assistance as well as human resources
training. As a result of this, the oil industry was no longer the powerful
engine that only a few years earlier had driven national development.
Increased foreign investment and the rise in exports did not, in the end,
generate sectoral link-ups with a powerful multiplying effect on the
productive apparatus’ growth and development. Our concern lies, therefore,
in that any agreements that are finally reached in the negotiations on
investment and government procurement, to mention only two examples, would
mean that Venezuela would have to, once and for all, give up these tools
for leveraging national development. Secondly, Ministerial Declarations issued in the
framework of the FTAA negotiations have repeatedly affirmed and ratified
the commitment to hold consultations that allow for ample participation by
civil society in the negotiation of this Agreement. The Quito Ministerial
Declaration agreed that “the views expressed (by civil society) constitute
a valuable contribution to the negotiations.” Consistency with these
resolutions means adopting the willingness to table for discussion those
issues that social organizations and movements have been raising in recent
years1. Criticism and observations made by social and political
organizations and movements throughout the continent, from the Southern
Cone to Canada, have generally referred to important issues related to the
general guidelines of the agreement being negotiated. The Agreement’s lack
of balance between the protection provided for commercial and
trade-related rights and that provided for human, labor, cultural,
environmental, gender, and even democratic rights has been repeatedly
pointed out. As indicated below, only recently has the dissemination
of the Agreement's content and an invitation to the participation of civil
society in the FTAA discussions been rather timidly arranged. It would not
make much sense to extend such an invitation if the underlying political
orientations were already determined and the only matter left to negotiate
were limited technical issues. And Venezuela’s intention in presenting this document
is precisely to take advantage of the opportunity “to exchange general
viewpoints on the overall status of the negotiations…” Finally, the FTAA has been defined, as a negotiation
process, as a “comprehensive, single undertaking” negotiated on a
consensus basis. This means that the issues that have already been
discussed are not agreed to in a definite manner until the negotiations of
the entire text have been concluded. As the negotiations advance, issues
could arise that initially were not discussed in sufficient depth, or
whose medium or long-term implications were not sufficiently clear to the
country representatives participating in the negotiation. The fact that
the negotiations have been pursued in a piecemeal manner, namely by
negotiating the different chapters of the Agreement separately, has made
it difficult for countries that have a weaker capacity and institutional
framework for negotiations to follow up on the implications of the process
as a whole. In this spirit, Venezuela would therefore like to point
out some of the issues that it considers should be left open for
discussion. 1. Liberalization policies and the role of the
state in development The main challenge facing the countries of Latin
America and the Caribbean is to overcome the poverty and vast inequalities
that make the region one of the most imbalanced in the world. Any program
aimed at building the future of Latin America and the Caribbean must give
priority to addressing the issue of poverty and achieving environmentally
sustainable development. There is no guarantee that the hemispheric
liberalization of investments and capital flows alone will ensure the
spread of well-being to all peoples. The evidence would suggest the contrary: over the last
two decades, liberalization and deregulation have increased at a rapid
pace around the world. Meanwhile, however, inequalities have been
exacerbated both within and among countries. Dani Rodrik, professor of
economics at Harvard University, states: “The principles of the Washington Consensus do not
serve as useful guidelines for promoting economic growth in Latin
America.” “The periods of economic growth have no relation
with the policies of integration to the world economy2”. The experience of recent decades in the region suggests
that it is not the liberalization policies set out by the Washington
Consensus that most favor economic growth. During the sixties and
seventies, when development and import substitution policies were
implemented, average annual economic growth levels in the region far
exceeded those recorded when structural adjustment policies,
liberalization and outward-looking growth models became widespread.
“Between 1960 and 1980, there was sustained growth, at an average pace of
2.9 percent a year; between 1980 and 1990, the region had negative growth
of –0.8 percent a year; and starting in 1990 economic growth resumed at an
average pace of 1.6 percent a year”
3. Increasingly, it is generally agreed (even in studies
conducted by many international and inter-American financial agencies,
such as the World Bank and the Inter-American Development Bank) that the
market alone is not capable of guaranteeing growth, of overcoming poverty
or of achieving equity. The role of the State and public policies
must be re-introduced as necessary conditions for achieving the desired
goal of equitable, democratic and environmentally sustainable development.
The principles underlying the FTAA negotiations have been marked by an
ideological bias, according to which market forces are always preferred
over actions taken by the State, regardless of the regions´ experience and
the ways in which the State has participated in all the successful
historic experiences of capitalist development. The issue of relations
between the market and the State cannot be resolved once and for all, for
all future situations and all possible circumstances, on the basis of
general theoretical or political assumptions. The appropriateness of
greater or lesser levels of State regulation or intervention is an open
issue that must be resolved according to constantly changing conditions
and to the political choices of the voting public, which are based on an
evaluation of the platforms presented by different candidates and parties.
Without this possibility of choice, it would be difficult for us to speak
of democracy. The policies of liberalization and structural adjustment,
therefore, cannot be established as fixed long-term commitments, as this
would impose extraordinarily severe restrictions on the future room for
maneuver of democratic politics. In this scenario, the countries of Latin America would
find themselves increasingly vulnerable in an increasingly unstable
international context, with severe limitations and even bans being placed
on the very public policies that would enable them to respond to these
changing conditions. 2. Inequalities in levels of development The negotiations of the Free Trade Area of the Americas
started out against the backdrop not only of abysmal differences in the
sizes of the economies, but also of extraordinary differences in the
levels of development. One of the key goals of a successful integration
project, as demonstrated by the experience of the European Union, is to
ensure that integration allows for concrete steps to be taken towards
significantly reducing these huge inequalities. This requires that firm
commitments be made (with procedures that guarantee their fulfillment) so
that the implementation of the Agreement will make an effective
contribution to reducing these inequalities. The issue of the vast inequalities with which the FTAA
negotiations process started has been recognized time and again in the
documents issued at Presidential Summits and Ministerial Meetings. The
Quito Ministerial Declaration states:
“We reaffirm our commitment to take into account in
designing the FTAA, the differences in levels of development and size
of economies in the Hemisphere, in order to ensure that these
economies participate fully in the building of, and benefits resulting
from, the Agreement…” The measures that have been discussed under the issue
of "preferential treatment" or under the category of "smaller economies"
neither pave the way for nor provide guidelines for policies that could
effectively contribute to a significant reduction in these vast
differences. It is not really a matter of large and small economies, but
of highly different economic structures. The measures concentrated on so
far have been limited to strengthening the countries’ technical capacity
to tackle the FTAA negotiations, but no decisions have yet been made
regarding the necessary and urgent measures that must be applied in order
to reduce and eliminate the profound imbalances that exist among our
countries. If action is not taken to improve social conditions and the
conditions of production, highly unequal countries will be treated as
equals and forced to compete under the same rules despite their relative
backwardness and weaknesses. It is therefore indispensable that we move on
from technical assistance measures and extensions of deadlines
if we are to comply with the FTAA’s commitments and regulations for
the creation of the mechanisms and funding necessary to correct the
asymmetries and disparities among those countries currently involved in
negotiating the Agreement. There is much more that can and must be done within the
framework of the Hemispheric Cooperation Program. Only pursuing technical
assistance measures as a means of ensuring that countries are in a
position to participate in the negotiations does not constitute adequately
addressing the divide which separates the weak countries from the powerful
ones. Applying equal treatment to profoundly unequal economies can only
benefit the strongest at the expense of the weakest. Neither technical
assistance with the adaptation process, nor deadlines spanning a few years
will solve these problems. This issue is of particular concern in light of
the fact that the “General Objectives and Principles” of the negotiation
of the Agreement stipulate that “The rights and obligations of the FTAA
will be shared by all countries.”4 Intrinsic to this situation is is the
demand for a certain principle of reciprocity among economies and
economic agents that are fundamentally unequal. For progress to be made in
reducing these fundamental inequalities, it if of paramount importance
that we embrace the challenge and stand firm in our commitments which will
necessarily demand a significant transfer of resources from the richer to
the poorer countries. For countries with weaker economies, the
establishment of a free market is not solely dependent on tariff reduction
measures. It will also depend on investments in the improvement of the
conditions in their productive and social environment, as well as on
changes in prevailing competition conditions in the main markets of the
Hemisphere. Venezuela knows that its exports still face significant
barriers in these markets. Therefore, the sincere will to resolve the
issues regarding developing countries’ access to different markets must
necessarily be translated into the correction of the disparities and
changes in the conditions for competition. Support policies for
production, contingent protection measures, as well as challenging
technical barriers that prevent access by weaker countries still prevail
in the main markets. And free trade, when engaged in under these terms and
with disadvantages, only benefits countries with higher levels of
industrialization and development. Our view is that a Free Trade Area can be an
opportunity for everyone alike if, and only if, the main powers of the
Hemisphere share the political, economic, and financial costs of opening
up spaces for the productive efforts made by weaker countries. In this
regard, the creation of Compensation Funds for the financing of
infrastructure and services projects aimed at decreasing asymmetries and
differences among countries is an essential condition to prevent the Free
Trade Area from becoming a space in which some win while many lose. We wish to emphasize that Free Trade Zones are not set
up only by eliminating tariffs. Structural, legal, and economic
convergence is vital to ensure that the FTAA is a win-win alliance.
Whether a Free Trade Zone ends up delivering the opportunities promised to
all depends on the degree of solidarity attained. The main powers of the
continent should support the creation of convergence funds, so that free
trade policies could be harmonized with national interests. 3. Mandate for transparency in the negotiations and
democratic participation On repeated occasions, presidential and ministerial
declarations on the FTAA have established mandates and commitments
regarding transparency in the negotiation process. Civil society’s
participation in the follow-up of the process depends ultimately on the
one condition: transparency in the negotiation process. Up to now,
however, transparency has been very limited. Only after civil society
organizations throughout the continent exerted pressure was a first draft
of the negotiations released in June 2001, after several years of ongoing
negotiations. The second draft of the negotiation was made public in
November 2002. These drafts only provide societies with a limited capacity
to discuss what is happening in the FTAA negotiations. The numerous
brackets, with no mention as to which countries have suggested the text in
each set, makes it impossible for the people of any given country to
identify their respective government's negotiating position. A great deal
is left to the discretion of the government representatives to the
negotiations and, in fact, their positions are kept secret which from the
outset makes it impossible to hold any well-informed and democratic debate
on the issue. Only if the negotiation process is truly transparent
for society as whole; for business sectors; workers; indigenous, cultural,
and environmental groups; political parties; parliament, and the press
will we be able to assert that we are moving toward an integration that
can be considered to be a democratic process. In the case of Venezuela,
pursuant to the provisions of article 73 of the Constitution regarding
Referendums for Bills and National Concerns, the government would have to
hold a referendum on the FTAA before approving or ratifying the Agreement. In order to attain greater transparency, as well as
full access for societies to all the information, and public discussion of
the FTAA negotiations, the timetables for the negotiations would have to
be changed. These are the costs that are necessary for democracy. The
accelerated pace of the current meetings and negotiations and the efforts
to conclude these negotiations by the end of 2005 make it impossible for
the negotiations to be transparent and also prevents the various social
sectors and society as a whole from being consulted before far-reaching
decisions such as those involved in the current FTAA draft chapters are
made. The demand for a democratic, transparent process,
access to information, and the right to participate in the FTAA
decision-making process stems, fundamentally, from the fact that the
Agreement is much more than a limited trade agreement. The Agreement’s
broad scope is set forth in precise terms in one of the General Guidelines
issued at the Fourth Trade Ministerial of the Americas. According to this
principle: “All countries shall ensure that their laws,
regulations, and administrative procedures conform to their obligations
under the FTAA agreement.” What is being requested is the politico-institutional
redesigning of State structure. In many instances, and Venezuela is one,
substantial constitutional changes would be needed. This being the case,
we cannot continue to negotiate as if these were just some trade
negotiations in which only experts and specialists in the different areas
of commercial and international law need participate. Democratic
negotiations need to include in an effective manner all sectors of the
population continent-wide because every sector will be affected to some
extent by the agreements being negotiated. 4. Social and Environmental Affairs The Quito Ministerial Declaration reiterates that the
“negotiation of the FTAA will continue to take into account the broad
social and economic agenda contained in the Miami, Santiago and Quebec
City Declarations and Plans of Action, with a view to contributing to
raising living standards, increasing employment opportunities, improving
the working conditions and increasing the health and education levels of
all people in the Americas, and better protecting the environment.” As we
have already stated, however, there is a vast gap between the commercial
commitments and disciplines set out in the text of the Agreement’s various
chapters and the commitments acquired with respect to human, labor,
cultural, and environmental rights. Likewise, there is a huge gap between
investor rights and the rights of States. All the countries participating in the FTAA are also
signatories to a wide range of international agreements and treaties whose
aim is, precisely, to protect human rights and the environment. The NAFTA
experience has already proven that, on occasion, the commitments that a
country assumes in new bilateral, multilateral, or global agreements may
come into conflict or even contradict other agreements previously signed
and ratified by that country. The FTAA is not an agreement that addresses
human, labor, cultural, or environmental rights. However, it must be
ensured that the commitments to be acquired upon the signing of this
Agreement do not jeopardize the commitments that all of our countries may
have previously acquired under other treaties. There are grounds for real
concern given the fact that free trade agreements in general (as has been
the case with NAFTA) do provide for mechanisms that ensure their
enforcement through the imposition of heavy sanctions, which are much more
effective than the mechanisms provided for in agreements and treaties on
human, labor, cultural, and environmental rights. This ability to ensure
enforcement of rules is also a feature of World Trade Organization (WTO)
agreements. We thus propose that a Negotiating Group be created, in
collaboration with the major indigenous and peasant organizations, labor
unions, human and migrants’ rights organizations, etc. throughout the
continent, and with the technical support and financial backing of the
OAS, the IDB, and the ECLAC, to conduct an in-depth evaluation of the
commitments acquired by our governments under agreements on human,
environmental, gender, labor, cultural and other rights, and their
potential conflict with the commitments that our governments would acquire
if the current version of the FTAA Agreement were to be signed.5 This group should also undertake the evaluation of
current constitutional texts, legislation, rules, and procedures in each
country to clearly assess which commitments entailing legal and political
changes are being acquired when negotiating an agreement whose criteria is
that: “All countries shall ensure that their laws,
regulations, and administrative procedures conform to their
obligations under the FTAA agreement.” Without this evaluation, countries would be negotiating
partially in the dark, without being fully aware of the exact implications
of the issues being negotiated. Without this information, systematically
organized, it would be extremely difficult to hold a public debate and
establish a well-informed, democratic decision-making process throughout
the continent. Finally, to avail our countries of the necessary
timeframe that will allow them to amply report and discuss the
implications and consequences of all these important issues related to the
FTAA negotiations and, on that basis, be able to develop the conditions
and strengths needed to take advantage of opportunities and face the
threats inherent to this process, the government of the Bolivarian
Republic of Venezuela insists anew on the need to discuss the feasibility
and desirability of:
In appreciation of the good will and disposition of the delegates at this TNC to listen to and consider this democratic request from our people and our government, I remain, Yours sincerely, Víctor Álvarez R. Puebla, Mexico, 8 April 2003
1 The documents of the
Social Continental Alliance, which brings together important social and
union organizations that are widely representative of the entire
continent, are an example of contributions that are fundamental to
issues discussed in the FTAA. [http:/www.asc-hsa.org] |
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