MENAcing FTAs

MENA countriesMiddle East, North Africa uprisings and Free Trade Agreements The discussion over the uprisings in the Middle-East have been framed as Islam meets pro-democracy vs. dictatorships.  Although it’s an accessible way for those in the Muslim-fearing West to discuss revolution in tolerant and civil terms, I’m not certain that these discussions frame a comprehensive picture of the uprisings. To get a better sense of what these uprisings signify, we might turn inward– as Wisconsin has– and begin to look at the unraveling of free-market capitalism, particularly free-trade. What does this “People’s movement” mean, particularly in the face of the bilateral and regional negotiations and agreements otherwise known as Free-Trade Agreements? As uprisings that call for regime change are appropriate considering that throughout the last decade there has mostly been a further streamlining of wealth funneled through oil/industrial/agricultural partnerships between corrupt governments and the big transnational industries, services and transport.  As defined by the World Bank, the Middle-East, North Africa (MENA) countries– representing the regions listed on the adjoining map– are both US-Middle East FTAs (which include Israel, Jordan, Morocco, Bahrain, Oman), and the 1998 Greater Arab FTA (GAFTA), which includes: Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. Signed in 1998, GAFTA came into force in 2005 (others may still be in the process of joining). Regionally, there has been economic unity or cooperation among the member states since 1957 when the Council of Arab Economic Unity (CAEU) was formed. Cairo, Egypt is the Administrative center for the CAEU and many of the economic policy decisions of the region took place there. As Cairo continues to be a center of the many economic decisions that concern the member states, the fact that the recent uprisings should reverberate across the region from Cairo might not be such a surprise, when viewing these uprisings through an FTA filter.  These uprisings may not be entirely dissimilar to the regime changes that took place among some of South American nations over the last decade, an obvious and defiant response to US trade hegemony. Bilaterals.org, a reputable website critical of the WTO, describes some of the general inequities between the US and the Andean countries, which is useful, as they express the tensions that have also been brewing among the people of the MENA nations, which are now erupting:

“…a number of special tensions have marked these FTA discussions. One is that the Andean countries have been reluctant to go beyond their WTO obligations in terms of intellectual property rights. The governments have kept expressing strong concerns about biodiversity, traditional knowledge, and access to medicines. Another overwhelming concern has been with regard to agriculture, where the Andean countries are reluctant to liberalize their markets on bilateral terms if the US will not agree to reduce domestic subsidies. An underlying concern has been how the FTA would interact with Andean Community law; that is, which of the two would take precedence. Regarding the US side, Washington’s lack of flexibility has been pointed out by many as a hallmark of the process. For that reason, many people refuse to call these “negotiations“. Indigenous peoples, farmers’ organizations, labour unions, and other social movements have been heavily mobilizing to stop this FTA. The FTA has been seen from the start as a thorough capitulation to US economic and geopolitical interests. In Colombia, Ecuador, and Peru, different sectors have pushed for national referenda on the FTA in their respective countries — and on several occasions organized their own.”
Although the term “FTA,” or the cogent analysis of free trade among the local populations may not have been the catalyst for these uprisings, it is arguable that the result of free-trade has led the poor, the educated and under-educated, the unemployed, and the dissatisfied youth to mobilize against the regimes that have benefited most from these negotiations.  These regimes are kingdom or government despots that privilege cozy relationships with transnational corporations in the various trade sectors which include not only oil, but agriculture, banking, pharmaceuticals, shipping, mining, manufacturing, tourism and housing development to name an obvious few. The US, particularly US-led transnationals, have been front-and-center, actively utilizing draconian WTO measures (aka threats of embargoes on other trade sectors), liberalizing trade regulations for the benefit of not only big agriculture (like Monsanto, Cargill, Nestle, etc..) but also other non-agricultural WTO sectors. In general terms, this has literally prevented middle income labor as well as many of those who were educated abroad and returning home, from participating in any viable way outside of– and independent of– the transnational system, which, defined by share-holders own logic, maximizes profits by hiring immigrant workers for lower wage. One process by which neo-liberal trade institutionalizes these disadvantages has to do with Subsidies and Countervailing measures, as enforced by the WTO, a result of the GATT Uruguay Round measures which was brought into force in 1995 . Subsidies are when a government or administration provides assets or resources to an industry to give it an advantage so that is may succeed in the market. As a result of these measures, what defies common sense is that a sovereign country may be unable to solve its unemployment by subsidizing the unemployed and under-funded farmers with seeds or land, because it would interfere with the free-market, meaning foreign imports of food, and the sale and presentation of goods in the market.  The mechanism through which this technical process occurs is in the supra-national courts.  In these FTAs it could be a violation of international trade law for governments to provide subsidies that will “unfairly” compete with foreign imports.  The result for not resolving these disputes may result in hefty fines or embargoes, which could then create legal barriers to a country from participating in the international market, further hurting its economy. There are a number of various measures that can be used across economic platforms, to enforce these rules.  Boycotts, high import tariffs on the country’s exports, or economic punishments exacted upon other sectors like a negative media campaign are effective towards exacting punishments, particularly in the case of the US market, where we traditionally have a strong per-capita consumer base . The long-standing US embargo with Cuba, for example, created desperate measures, particularly when the Soviet economy collapsed in 1989.  It took nearly a decade, but Cuba’s resolve of this unemployment/food problem was logical– following early socialist principles of food cooperatives– they subsidized local farming, necessitating that the percentage of output go to the state, while the rest be used for the benefit of the farmers and local markets.  Cuba was forced to do this out of necessity, in part, because of the ongoing US trade embargo. If there had not been an embargo already in place and Cuba was participating in the free-market, the likely scenario is that Cuba would have a higher GDP and would be a tourist-based economy without the sufficient means to feed itself, and would also likely embrace an underworld economy of drugs and prostitution, real estate bubbles and possibly gambling… a scenario that must resonate with many Pacific islands. To summarize, the people have generally not been on the receiving end of these benefits as they have been removed from the process as a result of these FTAs, and in the last decade, mostly, we have all unwittingly found ourselves trapped as consumers, forced to provide for our basic necessities in the transnational market under the rubric of rising unemployment, and more recently, higher food prices. Following up with Wisconsin protests, the issue of doing away with the unions collective bargaining rights is part of the same dialogue regarding the transnational system, whereby today’s Financial Times cites that the public sector’s benefits have gone up 20% points more than the private sector, the reality is that public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, as Krugman points out in a NYTimes op-ed. In this era of corporate privatization, by all standards of providing for general welfare— public utilities and industries should be regulated by governments and not made to compete in the free-market.]]>

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