Two McGill professors faced off against two social activists in a debate at McGill last Thursday on the Free Trade Area of the Americas (FTAA), the proposed free trade zone which would comprise every country in the Western hemisphere except Cuba.
William Watson, a McGill economics professor, and Armand de Mestral, a McGill law professor, defended the FTAA at the event while Steven Shrybman, a international trade and public interest lawyer and, and Jaggi Singh, a social justice activist, criticized the agreement.
Singh and Shrybman argued that the FTAA, while technically limited to international trade issues, will have serious ramifications on state sovereignty. The FTAA, they claimed, will indirectly influence the decisions of governments even if the agreement’s supporters do not admit it.
“The FTAA may not force countries, but we know they are beholden to the FTAA, if it’s opened…. Beyond specific cases, there is a chill effect,” said Singh, referring to instances when North American governments have decided against confronting corporations’ practices harmful to health, environment, or safety, out of fear of being sued under NAFTA’s Chapter 11.
The FTAA charter’s equivalent of NAFTA’s Chapter 11, which allows corporations to hold governments accountable in secret tribunals for violating their trade rights, was hotly contested.
Unlike other free trade zones, such as the European Union, the FTAA lacks transparency, Shrybman said.
“Why would corporations have secret meetings to rule over government policy and law? They can’t [sic... should read "can"] take their complaints to a hotel room in Washington…. NAFTA cedes authority to corporations; Europe has judicial forums while NAFTA has private tribunals,” Shrybman said.
Watson claimed that Chapter 11 does not force governments to bend to corporate interests, but only forces equal competition between domestic and imported products, except for public services, which are exempt. Access to rich markets is a boon for poorer nations, he said.
“The FTAA eliminates tariffs that block trade…. Other countries saw the US-Mexico-Canada agreement and wanted access to rich markets…the basic principle is national treatment – treat others the same as your own,” said Watson.
Shrybman replied that the FTAA was written exclusively by corporations to serve their interests, and it allows them to raid national resources without giving anything in return.
“This isn’t about trade, this is about new regimes controlling domestic policy and law in a neo-liberal agenda…this is access to markets without having to invest in economies,” said Shrybman.
Singh brought up Chapter 11 cases where governments tried to stop harmful chemicals from being peddled by corporations, only to be successfully sued and forced to pay and change policy, such as Ethyl vs. Canada.
“Chapter 11 is in NAFTA because of corporate demands, to change rules to allow corporations to have more power,” said Singh.
Although the debate at times became personal (Watson accused Singh of suffering from an inferiority complex due to being the only non-professor on the panel, to which Singh responded by repeatedly bowing to Watson’s “esteem”), both sides agreed that subsidized farming is economically harmful.
“The average European cow has a higher income than the average African citizen. We shouldn’t subsidize farming, we should let [farmers] compete,” Watson said.
Critics of the FTAA say the agreement will cause ecological harm, limit domestic control over agricultural practices, and spur the privatization of public sectors goods, such as health care.
But Watson and de Mestral argued that the FTAA is in fact a multilateral agreement limited to trade, and that its opponents unfairly saddle the agreement with evils that are products of other forces.
“A government might accept billions to privatize, but that is not in the FTAA,” Watson said.
“The center of FTAA and NAFTA are boring old tariff reductions,” added de Mestral.
Watson asserted that although certain groups, like small farmers that cannot compete on the global market, will suffer from the FTAA, economic opening will ultimately generate enough wealth for governments to compensate for the agreement’s negative impact with better social services.
“Free trade doesn’t help everyone, whatever the politicians say,” Watson admitted. “What does happen is that countries become more productive…. Highly protected sectors may have to look elsewhere for work when tariffs drop.”
Singh and Shrybman said that the trickle-down model of resources is misleading, and that only corporations will benefit from increased productivity. A re-investment of newly acquired wealth into social welfare programs is unlikely to occur.
“The losers are millions of people and the winners are the very rich, and that makes you ask why do it…. Something is trickling down, but it ain’t wealth,” Singh quipped.
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