TRADE: Divisions Between US-Latam on Labor, Environment

By IPS Correspondents Reprint | | Print |

Tim Shorrock

WASHINGTON, May 8 1998 (IPS) - Deep divisions between the United States and Latin America regarding the effect global trade has on social issues emerged this week at a conference of hundreds of diplomats and corporate executives in Washington.

“The challenge is no longer how to forge the global market, but how to put sensible boundaries around the market that already exists; how to make the global economy work for the many and not just the few,” union leader John Sweeney, president of the 13 million-member AFL-CIO, told delegates. The two-day conference was sponsored by the Economic Strategy Institute, a Washington think-tank funded by U.S. manufacturing and transportation interests.

The split between the United States and its Lation American neighbours centered on the role to be played in trade negotiations by labor and environmental groups, and Washington’s use of sanctions against Cuba and other countries.

Trade ministers from Mexico and Brazil criticized the United States for allowing “protectionist” sentiments to distort U.S. trade initiatives. U.S. congressional and union leaders, however, maintained that the American public would reject globalization unless trading countries treated wages and other social issues with the same concern given to intellectual property and other issues important to business.

Verbal exchanges, often sharp and direct, underscored the strength of the public discontent in the United States over trade and the growing frustration in Latin America with the political stalement in Washington over globalization.

The AFL-CIO’s Sweeney said that while efforts to forge global markets were led “primarily from the suites and plush offices of banks and corporations, the new internationalism is being driven largely from the streets.” And it is demanding “effective governance that will secure basic worker rights, environmental and consumer protections, sensible anti-trust and financial regulation.”

Latin American frustration with this approach came from Mexican Trade Minister Herminio Blanco Mendoza, the Mexican Minister of Trade. In a speech Wednesday, he blasted “protectionists” in the United States for derailing the free trade agenda in the Americas and pleaded with U.S. corporations and politicians who supported free trade to regain the initiative lost when Congress voted down President Clinton’s request for fast track negotiating authority.

“We must be as active as those who fight against free trade,” Mendoza declared. “Unless the believers in free trade campaign just as hard, we won’t move as fast as we want on opening borders in all our countries.”

He said the rejection of fast track by Congress reflected “trade fatigue and it has given an extraordinary boost to unions and other free trade opponents.”

Mendoza went on to attack those behind the delay in Chile’s entry into the North American Free Trade Agreement (NAFTA) which had forced the administration of president Bill Clinton to push for labor and environmental discussions in recent discussions on a Free Trade Area of the Americas (FTAA). Unions and environmentalists had “undermined what we have achieved” and “biased the trade agenda,” he said. “We should all work to defeat this strategy.”

Mendoza was particularly critical of attacks by U.S. labor unions on conditions in Mexico’s maquiladora export factories, where 4,000 corporations employ more than one million workers.

Although less caustic in tone, Jose Botofogo Concalves, Brazil’s Minister of State for Trade, Industry and Tourism, criticized the United States for its policies of unilateral sanctions. He said that free trade discussions would continue in the Americas despite Congress’ failure to give Clinton the authority to negotiate a sweeping agreement.

Because of the fast track defeat, he was not yet convinced the FTAA “will develop along the lines” outlined at recent summit meetings of leaders of the Americas, Concalves said. “But we certainly won’t stop simply because the United States has no fast track authority…Sooner or later, the United States must face this issue to make the FTAA successful.”

In response, Arizona republican member of the House of Representaives Jim Kolbe, a fast track supporter, agreed that the momentum for trade liberalization has slowed. ” The air has gone out of the tires, the steam out of the engine.”

While “not fatal” the refusal by Congress to pass fast track constituted a “very serious failure,” he said. Kolbe noted that the United States and Cuba were now the only countries in the hemisphere lacking a free trade agreement with Chile.

At a panel discussion on U.S. politics, William Greider, author of “One World: Ready of Not”, said free trade advocates in the United States “underestimated the depth and strength of the opposition.”

NAFTA “didn’t defeat the opposition, but fueled it” because business claims of its impact have not been fulfilled, Greider said. If the U.S. system did not respond to the critics of NAFTA and globalization, he warned of a political vacuum that could lead to a “right-wing reaction” to trade that could be far more costly to business that an opposition led by Democrats.

“If the system doesn’t respond, the people will opt for other things,” he said.

Jerry Jasinowski, president of the National Association of Manufacturer s, dismissed the analysis offered by Greider and Sweeney.

“Some have been severely impacted by globalization, but the overall picture is enormously positive,” he said. “We’re number one and we’re sitting around acting like we’re number 10.”