Free Trade Area of the Americas could devastate fledgling economies

“The greatest evil is not now done in those sordid dens of crime that Dickens loved to… “The greatest evil is not now done in those sordid dens of crime that Dickens loved to paint. It is not done even in concentration camps and labor camps. In those we see its final results. But it is conceived and ordered (moved, seconded, carried and minuted) in clean, carpeted rooms, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks, who do not have to raise their voice.” – C.S. Lewis.

This Thursday, representatives from the 34 nations of the Western hemisphere, excluding only Cuba, will meet in Miami to discuss the creation of a Free Trade Area of the Americas. The meeting is the culmination of nine years of planning and – some fear – is the decisive meeting that will make the agreement inevitable.

Massive protests are expected, and Congress has allocated $8.5 million – which was attached as part of the $87 billion to help rebuild Iraq – to help the 2,500 police officers assigned to the protest keep order during the deliberations. The city is going to attempt to keep the protesters confined to designated areas of the city with giant fences, according to the Miami Herald.

I’m still in shock that all of this is happening. Even the people pushing for adoption of the FTAA plan describe it as an extension of the North American Free Trade Agreement, that cataclysmic disaster which resulted in the loss of 765,000 American jobs, many small farms, and the near collapse of the Mexican economy. Does anyone think that this is a good idea? Anyone?

In my mind, the idea of adopting “free” trade policies between countries with drastically different levels of development is one of the only black-and-white issues left in politics today.

The idea is for all countries to eliminate tariffs and subsidies on all goods and to push fledgling countries toward an export-oriented system to increase growth. Then, allow the magic of laissez-faire capitalism to do its work, and presto! The most efficient distribution of income, granting a higher standard of living to all, emerges.

The idea clearly hinges on the presumption that all countries will cooperate in creating a zero-interference environment. The most common blow to “free” trade, as it operates now, is that larger countries don’t cooperate. U.S. subsidies to sugar cane farmers make it impossible for Jamaican sugar to compete in the U.S. market. And our subsidized milk drove most Jamaican dairy farmers out of business in the late ’90s.

I want to attack deeper than that. What corporations want is free trade – freedom for trade. Freedom is good both politically and economically. But the term can be misleading when we examine how we use it in regard to trade. In relation to trade, it’s used to mean trade that’s completely uninhibited, trade that flows without any sort of supervision or protections, trade that pays no attention to political boundaries and that can simply flourish. To me, that sounds more like economic anarchy.

And all sorts of anarchy work the same way: the strong win, the weak lose.

In a region like the Western hemisphere, there is massive economic inequality. Countries like Nicaragua have virtually no economic infrastructure of their own. Their businesses have no chance of competing with American or Canadian enterprises. Free trade advocates note that their policies bring prices down for consumers and impoverished people can afford food and milk. But it is American milk – and soon their local enterprises collapse and they have no hope for long-term growth. In America, we have laws to protect small businesses from the cutthroat tactics of corporations. Why deny those protections internationally? Freedom for trade is good, but freedom can only be secured when there is a system of laws to protect it.

Individual countries need the freedom to look after their own enterprises. You can’t expect economic unity across countries with competing political interests.

But we already know all of this, as Americans. The first thing the American government did after the revolution was to initiate tariffs to protect infant American businesses from dumping by the British. Similar policies were initiated by South Korea after World War II, and it worked for them as well.

But apparently we’ve forgotten all of this.

Questions, Comments, Insights or Suggestions? WMinton@pittnews.com.