Free Trade Area of the Americas - FTAA


Trade Negotiations

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March 29, 2004

Original: Spanish
Translation: FTAA Secretariat



Name(s) Dr. Isidro Morales of the Universidad de las Américas Puebla and Dr. Paulino Ernesto Arellanes Jiménez of the Benemérita Universidad Autónoma de Puebla
Organization(s) Benemérita Universidad Autónoma de Puebla and Universidad de las Américas Puebla
Country Mexico
FTAA Entity addressed
in the contribution
FTAA Process

Civil Society Forum on the FTAA Negotiations
Benemérita Universidad Autónoma de Puebla

This roundtable included the following participants: Dr. Nora Lustig, Rector of the Universidad de las Américas, Puebla; Dr. Enrique Doger, Rector of the Benemérita Universidad Autónoma of Puebla, and Professor Pablo Lazo, Chair of SOC-FTAA. The comments from the public contributed to the enrichment of this roundtable.

The main message of this roundtable was that the discussion of whether inequalities had increased as a result of protectionism or liberalization was an artificial one. While the countries of the European Union have experienced a convergence of per capita GDP, under NAFTA, the GDP of the United States and Mexico has tended to diverge due to the inequalities between these two countries. Specifically, in northern Mexico, the standard of living is converging with that of the United States, while in the South it is converging with the standard of living in the countries of Central America. This shows that measures need to be taken to eliminate inequalities, not only when protectionism exists, but also when an economic opening process is underway. Participants indicated the contexts in which protection or liberalization brings with it increased inequality, for example:

a) Protectionism means that the incomes of privileged sectors—those with the political capacity to protect themselves—are reduced.
b) Obstacles to immigration adversely affect equality and this is part of the protectionist mentality.
c) In the case of agriculture, protectionism is not advisable, as some 70 percent of the poor live in rural areas. Subsidies are normally granted to producers in wealthier countries.
d) Intellectual property rights limit access to pharmaceutical products – this is also a form of protectionism.

Liberalization can increase inequality as well, by widening the wage gap between skilled and unskilled workers, and increasing the disparity in the concentration of benefits. NAFTA created agglomerate economies in northern Mexico, which explains the higher growth rates in that region, while in southern Mexico, marginalized sectors are not integrated into the markets and are therefore not benefiting from the process.

The following were pointed out as essential elements in defining an action plan for fighting inequality: no agricultural protection and the liberalization of labor markets. In order to fight inequality, domestic policies also need to be established that focus on ensuring access to education, including higher education, the gradual opening of vulnerable sectors, as well as crisis prevention and resolution mechanisms. Participants furthermore noted the need for funds to be transferred; for example, through structural or cohesion funds similar to those existing in the European Union.

The United States proposal regarding the structure of the FTAA has encountered opposition from countries such as Venezuela, Brazil and Argentina. Civil society in the countries involved, including the United States, has also questioned the FTAA proposal, and alternative agendas have consequently been presented. The proposals are no longer made from the perspective of generating large amounts of capital, but from that of addressing various problems, such as the heavy agricultural subsidies that make it impossible for some to compete.

The process needs to be transparent in order for civil society to become aware of the impact of the negotiations. Mechanisms to compensate for inequalities must be put in place, and alternatives to make integration viable are therefore required.

The FTAA must respond to the differences in the size of the economies, without disregarding cultural differences. Clear rules are thus required to implement structural reforms with full legal security.

The FTAA can and must be the key to raising standards of living, improving health and protecting the environment, but this depends on the process’ capacity for social dialogue and negotiators’ capacity to respond to the demands of civil society.

The most recent ministerial meeting, held in Miami, was mentioned as a turning point in the negotiations. Paragraph 10 of the Declaration stipulates that the countries negotiate a balanced set of rights and obligations. At the same time, however, negotiating groups are instructed to conduct plurilateral negotiations. The Trade Negotiations Committee must therefore commence the plurilateral negotiations. In Miami, a clear proposal was made to create a civil society committee that could participate in the negotiations. Two sensitive issues, labor and environmental rights, were also introduced into the discussion. Both chapters are currently bracketed and their future is uncertain.

Speakers reminded those present that one of the NGOs’ complaints had been the lack of more efficient mechanisms for their participation. A mechanism that affords direct contact with the negotiations is needed, given that civil society is concerned about the closed nature of the process. Spaces for negotiations need to open up “in real time”. In addition, resources need to be transferred to middle-income, low-income and very poor areas. Finally, participants commented on the issue meetings held with civil society groups in Brazil, Santiago de Chile and the Dominican Republic.

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