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Demonstraightening Out the FTAA

While the three-day negotiations over the formation of a Free Trade Area of the Americas (FTAA) proceeded in Quebec City in April 2001, tens of thousands of demonstrators toted placards outside, demanding to be heard.
Alexandra Flynn

Issue #65, January 2004

While the three-day negotiations over the formation of a Free Trade Area of the Americas (FTAA) proceeded in Quebec City in April 2001, tens of thousands of demonstrators toted placards outside, demanding to be heard. Having seen the impact of uncontrolled citizen participation in Seattle two years before, numerous steps had been taken by conference organizers to minimize the visibility of the demonstrators, including "protecting" conference participants by setting up high iron gates, and policing them with armed security guards and pepper spray. To the conference organizers, maintaining the integrity of the negotiation process meant cutting off contact between trade representatives and everyone else.

The protestors, excluded and ignored from trade organizations of every acronym, haven't stopped participating despite the barriers — they have instead created their own avenues. They demonstrate in massive, organized groups when formal organizations meet; they run parallel meetings (like the Ponte Allegre which had mirror proceedings alongside the World Economic Forum in April 2002); they have written hundreds of books and articles on the inequality produced by unfettered trade regimes; and have used art and photography to express dissent.

January 1, 2004 will mark the tenth anniversary of the creation of the North American Free Trade Agreement (NAFTA). These past ten years have meant enormous changes to domestic economies. Overall, while wealth and prosperity have increased in both Canada and the United States, the income gaps of the wealthiest and poorest classes have widened. Other changes include successful challenges made by corporations resulting in governments paying damages for having introduced environmental standards that reduced corporate competitiveness; a reduction in the number of family-owned farms in Canada; and new patent rules that result in an increase in the cost of medications. Despite this, plans to expand NAFTA by implementing the FTAA are rolling ahead. Like NAFTA, the FTAA will permit an international body to make decisions traditionally reserved for the nation state and, also like its predecessor, no provisions have been introduced permitting non-state actors to either take part in decision-making or bring damage claims.

NAFTA's underlying assumption is that social gains will ensue from the distribution of economic benefits, and that the pursuit of such gains are separate from trade and should remain in the hands of the responsible governments. When (and if) implemented in 2005, the FTAA will represent a market of approximately 800 million people with $11 trillion in production. While the European Union (EU), has acknowledged its role as a legislative body, NAFTA was reluctant to include provisions related to social, cultural, and political issues, nor did it provide a human rights charter. It stuck its head in the sand in creating mechanisms to deal with any social, cultural and political problems that developed in tangent to trade and investment.

This is not to give the impression that only governments have agency under NAFTA; investors and corporations do too. Under Chapter 11, they can sue NAFTA-signatory governments in special tribunals to obtain cash compensation for government policies or actions that investors believe violate their rights under NAFTA. If an investor or corporation wins its case, it will be awarded taxpayer dollars from the treasury of the offending nation. For example, Canada's banning of PCB products meant refusing exports from a U.S. company, which under NAFTA was compensated for lost profits — using Canadian taxpayer dollars.

Unlike investors and corporations, non-state actors can neither bring actions nor, in general, get information on tribunal cases unless the parties to the conflict consent. There are significant limits on their ability to submit information, attend proceedings, get access to documents submitted by any of the parties and, sometimes even, obtain the final decisions of the panels. And, because of the way in which it was enacted in Canada and the U.S., the public can't invoke NAFTA in national courts as the legal basis for a cause of action.

According to political theorists, the basic form of political involvement is voting, which takes place because the citizen wants change or because of increased awareness of his or her individual and collective rights. Additional participation occurs when citizens do not like the decisions that have been made by elected representatives. Participation then takes the form of lobbying in cases of social, economic, and political policies; and court challenges in the case of law. In rare circumstances, individuals with specific agendas will run for office. In each of these modes of participation, the bodies being appealed to are the elected government or the judiciary, and the interest to be gained is a change in how something is operating.

When NAFTA was created, the theory was that government leaders are elected to negotiate on behalf of citizens for domestic policies, of which international affairs are simply an extension. Public participation under this model would be confined to the nation state. But times have changed, and the old theory on participation no longer holds. The following are explanations of why non-state actors must be extended the right to participate in NAFTA and the future FTAA:

NAFTA and the FTAA are governing bodies. While NAFTA looks as though it is simply a set of administrative rules governing issues that have long since been a part of U.S.-Canada relations, they are actually rules that tie the hands of local and national-level players. NAFTA is unlike other legislative decisions that domestic governments grapple with: powers previously under its control are turned over to the international organization.

FTAA collage by Earth Dancer

Take the softwood lumber dispute, which centers around whether the stumpage fees payable by Canadian logging companies to the government are set below the resource rents that would be payable in a competitive market and, therefore, can be considered subsidies, since they would result in lower log costs for lumber producers. In 1983, the U.S. industry brought a countervailing duty action against softwood lumber imports, an action which subsequently flopped. Twenty years later, endless appeals and ineffective diplomacy have resulted in the industry being crippled. In the meantime, those affected stand back and wait for this mammoth trade organization to fix it, without any recourse of their own — not even to object to a body that will listen to them.

Anne-Marie Slaughter, a Harvard professor, suggests that "transgovernmentalism," a loosely connected set of relationships between domestic governments, judges, regulatory agencies, and transgovernmental organizations are "creating a genuinely new world order in which networked institutions perform the functions of a world government — legislation, administration, and adjudication — without the form." This leaves no single forum to which a governing agency can make decisions.

As George Bancroft put it, "The best government rests on the people, and not on the few, on persons and not on property, on the free development of public opinion and not on authority." The one avenue for public participation — the nation state — doesn't include a way for all of those affected to intervene. Public participation must be available in each element of the Slaughter-observed new world order.

Some get a voice while others don't. Non-state actors aren't monolithic; they include a combination of interests. Among matters not being covered in the FTAA negotiations are democracy, human rights, labour and environmental issues, immigration, capacity building and gender. These issues are undoubtedly intertwined with trade and investment and impact millions of people. Yet, while investors and corporations have a role within NAFTA and the FTAA, other non-state actors don't.

People want a new model. Hundreds of thousands of people protest when governments meet to discuss trade issues. Hundreds of books and articles have been written challenging the directions and decisions that NAFTA has taken. Parallel conferences have taken place while trade organizations meet. Lots of people want to be involved, and they don't believe that lobbying their domestic governments is enough.

And it makes sense. A person may vote for a government for myriad reasons. What if you like a politician's view on civil rights but not their views on trade relationships? And even if you vote based on their beliefs about NAFTA, Canada, the U.S. and Mexico are each only one of three parties. In 2005, they will be one of 34. Then there are organizations, like Greenpeace or Human Rights Watch, whose mandates are just as international as they are domestic. International identities mean that no national government is sufficiently connected with it for it to concentrate its lobbying efforts there.

Political expectations have extended beyond local and national interests. The public has an expectation of concrete, accepted, and acknowledged involvement in the international arena. Between membership in public international bodies, to involvement in private international bodies, to easier physical connections to other countries, issues abroad have become sources of concern at home. The expectations argument asserts that because citizens are concerned about international affairs, it is natural for them to want a voice in the decisions being made at that level.

Philosopher Charles Taylor believes that identities can be understood by the cultural groups to which one belongs. According to Taylor, membership in cultural groups must be considered alongside formal government and regulatory agencies, as the former offer a sense of community and civility not analogous in the latter. People do not simply have national identities, but global ones too. It means that we care and have opinions about people in other countries, with issues beyond those of the nation-state, and with how international institutions work. For years we have been told that "local is now global." If that is true, than democracy must exist where international bodies make decisions that affect us.

Political participation is essential where people have a direct stake in the outcome of the decisions being made. It follows that once a government hands off control to another body, the new body must provide direct non-state actor participation too. For example, when a federal government gives control of a domestic issue, like health or law enforcement, to states or provinces, then the public feels it should have a way to have its voice heard in the new state or provincial body. The same thing has happened here, except that the Canadian, U.S., and Mexican governments have given decision-making power over traditionally domestic issues to an international body.

Accepting that NAFTA and the FTAA must have avenues for public opinion begs the question of how. I find it helpful to look at potential changes along a spectrum, ranging from "increasing transparency," to "reforming existing institutions," to a "full shift."

The first step means disseminating information of the decisions taken by NAFTA and its tribunals and the reasons why, and giving opportunities to the public to intervene by submitting legal briefs. While it would empower the public to better understand what kinds of decisions are made, this step wouldn't give the public any decision-making agency or legal rights.

The second step, reforming institutions, would allow non-state actors to bring direct actions for such things as damages to the environment and violations of labour standards, and would tweak with public involvement in setting NAFTA and FTAA priorities. Reforming institutions means more than introducing superficial changes, though. Take the "Civil Society Committee," set up by FTAA negotiators, which invites civil society groups to submit their concerns. While it appears to acknowledge the importance of public participation, there is no obligation on the part of committee members to read or respond to the submissions. The Canadian government recently summarized non-governmental organization and social and political activist involvement as having "been a trying experience at times" with "the participation of and consultation with civil society is now an integral part of the FTAA negotiation process." However, without a seat at the table or real proposals for institutional changes, this kind of change is more lip-service than an invitation for real participation.

A full shift would mean a significant enhancement of NAFTA's governance system and, basically, the abolition of NAFTA in its current state. As an example, the Hemispheric Social Alliance (HSA) has collaborated with labour organizations and citizen's coalitions representing 50 million people, producing detailed alternatives to the dominant economic model. HSA's principle is that trade and investment should be used as instruments for achieving just and sustainable development, not simply as ends in and of themselves. Changes at this end of the spectrum mean a NAFTA and FTAA that includes the public as a party to the process.

If it doesn't happen formally, non-state actors will keep demonstrating, writing, making art, and making noise. You can't quell participation by keeping people out. And you can't claim to be a representative organization if you don't allow the public a seat at the table.

Alexandra Flynn is a Canadian attorney and writer currently living in San Francisco.

Credit: FTAA collage image Copyright ©2004 Earth Dancer

Copyright © 2004 by Alexandra Flynn . All rights reserved.