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Opinion and Analysis: Economy | International

Summit of the Americas, Argentina: Tomb of the FTAA

Caracas -- "In the future, we will speak of US-Latin American relations in terms of the era before Mar del Plata, and the era after it," remarked President Hugo Chávez today on his weekly televised talk show, Aló Presidente.

Three weeks ago, Latin America scored a major victory over US economic and political domination in the Summit of the Americas in Argentina. Latin America may not be on the minds of most US citizens, but the seismic shift in relationship with the US is a major issue across the hemisphere.

In Caracas last weekend, President Chávez spent four hours analyzing on national television the different speeches, disagreements, and impacts of the Summit. In the true style of the former international relations professor, he showed clips of presidential speeches of Mexico, Argentina, Canada, the US, and other countries, and offered economic, political, and historical analysis, frequently punctuated by close-ups of colorful maps. This popular political education riles the blood of the elites who abhor listening to their President criticize the US government, but the poor majority swell with pride in their country¹s leading role in reshaping international political economy.

The summit, organized under the auspices of the Organization of American States, was supposed to be about creating jobs. Instead, it turned into a struggle about the economic vision for the hemisphere ­ with Bush on one side promoting the Free Trade Area of the Americas, and Chávez on the other promoting the Bolivarian Alternative for the Americas.

Consider the backdrop: Bush is facing blistering criticisms of the war in Iraq, over 2,000 grieving families, dismal approval ratings, and staff indictments, compared to Chávez¹s meteoric 70% approval ratings and accelerated economic growth (9.3% this trimester, the highest in Latin America). It was one of those times when the truth was so apparent that it couldn¹t be spun: even the mainstream US media acknowledged that Chávez had won.

Let¹s place the need for such a struggle about a new economic vision for the hemisphere in context. According to the UN, and included in the draft declaration, is the horrifying truth that 222 million people - 43% of the population of Latin America - are poor, with 96 million ­ nearly one in five ­ living on less than a buck a day. US diplomats, much to their chagrin, got the additional phrase "while in the United States there are 37 million poor," circulating widely in the media, by strongly opposing its inclusion in the declaration.

But the vision for exactly how to create economic growth ­ and ensure that growth creates jobs and reduces poverty ­ remains mired in controversy. For example, the recent economic growth in the US has been an unusual jobless recovery. Likewise, during the last 25 years of following the Washington Consensus economic model of privatization, lowering tariffs, opening up to foreign investment, and eroding worker's rights, exports have increased, and yet Latin America has experienced a spectacular failure of economic growth ­ less than .5% per capita income growth average since 1980.

And in spite of (or rather because of) the obvious failure of NAFTA to lower poverty or unemployment rates while increasing exports, expanding NAFTA to the western hemisphere through the Free Trade Area of the Americas ­ the FTAA ­ has been the top political priority of the US in Latin America for the last ten years. But in 2003 the talks faltered, and have been stalled ever since. Despite the growing opposition to the FTAA in recent years, the US intended to use the summit to set a date to start the talks up again.

A strikingly candid assessment by the WSJ acknowledged that the "rise of Mr. Chavez, and of other more moderate leftist leaders in Latin America, reflects the disappointing results of the so-called Washington Consensus, a set of market-oriented policies like trade liberalization and privatization that the region and parts of Asia embraced during the 1990s."

Nowadays, the countries moving farther away from Washington economic orthodoxy ­ Venezuela, Argentina, and Uruguay ­ are the three fastest growing economies in Latin America today.

The Tomb of the FTAA is in Mar del Plata

Mexico introduced the first proposal to include language in the Declaration to re-ignite the FTAA talks. (President Chávez later referred to President Fox as a "puppy dog for US imperialism," a comment that has caused quite a diplomatic flap between the two nations.) The countries of Mercosur - Argentina, Brazil, Uruguay, and Paraguay - introduced alternative language that conditioned the relaunching of talks on the outcome of discussions in the WTO on US agricultural subsidies and tariffs, the issue that stalled them two years ago.

Venezuela, which was the only country to oppose the FTAA talks in the last Summit in Quebec in 2001, supported the Mercosur proposal.

Summits invariably end in consensus documents, but this one failed to produce either. At one point, Panama tried to intervene with a proposal to include both proposals to relaunch the FTAA talks and the one to postpone them ­ a highly unusual move. In cases of strong disagreement, the norm in summits is to include only language that is consensual. In this case, that would have meant not including a start date for relaunching of talks, a defeat for the Bush administration. So negotiators ended up leaving with no document at all.

Bush continuously referred to the "great majority" of nations that support the re-opening of talks for the FTAA, arguing that their perspective should be included in the final document. But this is misleading.

The US already has free trade agreements signed or in the works with all the other countries except the Caribbean Community. And while there is surely some ideological diversity within Caricom, the bloc has often expressed strong opposition to the direction of the talks, but lacks the political capital to publicly oppose US policy as can Venezuela or Brazil.

In addition, it has long been obvious that the purpose of expanding NAFTA has been to get at the bigger markets of Brazil and Argentina, not to get tiny St. Lucia to the table.

To decide once and for all on the future of the FTAA talks, Chávez called for a hemispheric referendum ­ like the Europeans are doing with their Constitution ­ so that the people can decide on the future of the economic integration of the Americas. But doesn¹t seem to be the direct democracy that the Bush administration means when he says that "democracy and free trade" go hand in hand.

Popularity Contest: Bush 0, Chavez 10

Across the city from the presidential talks, the Hemispheric Social Alliance together with the Argentine coalition against the FTAA organized a Summit of the Peoples. Over 12,000 Americans came from across the hemisphere to participate in over 150 workshops and events, covered by 600 independent and mainstream journalists. A closing assembly of over 5,000 people, presided by the head of the Argentine labor federation and yours truly, condemned the presence of President Bush in Latin America, the occupation of Iraq, the immoral debt, the WTO and the FTAA, and called for a people¹s integration based on human needs.

The following day, the "No Bush No FTAA" rally began with rain and a cold wind, as we marched through the near-deserted streets of the ocean resort town. Attended by around 40,000 people, the giant stadium was electrified by the presence of Cuban singer Silvio Rodriguez; Argentine soccer star Diego Maradona; Indigenous Ecuadorian leader Blanca Chancosa; Nobel Prize Winner Adolfo Perez Esquivel; Mothers of the Plaza de Mayo founder Hebe Bonafini; Bolivian presidential candidate Evo Morales; and the President of Venezuela, Hugo Chávez Frias.

"The tomb of the FTAA is in Mar del Plata!" cheered Chávez as the crowd went wild. He even asked for a moment of silence. Thousands of people started jumping up and down ­ probably also in a futile attempt to warm their bodies from the cold rain ­ shouting the Spanish rhyme "a moment of silence! The FTAA is dead!" It was a cheerful funeral, honored by a two-hour eulogy by the Venezuelan leader. "Today is a day to feel," the Argentine teacher on my right told me. "The paradigm is shifting."

Meanwhile, the New York Times noted that while other presidents ambled in small groups on their way to lunch, President Bush walked quite alone.

Mainstream media coverage repeatedly noted that Bush is the most unpopular president in Latin America in history, and that in a recent poll of 37 countries, Bush is most unloved by Argentines ­ who dislike him even more than Iraqis. Their country is still ravaged by an economic meltdown widely attributed to the International Monetary Fund. While Bush expressed support at the summit for Argentina's President Kirchner¹s economic program, Kirchner's comments were widely seen as critical of Bush and the IMF. Argentina¹s temporary default on its IMF debt in September 2003 helped jumpstart its economic recovery, and is credited with downsizing the IMF's political leverage with middle income countries.

The quote of President Bush most repeated in widespread media coverage was not related to any vision for jobs or economic development, but was an acknowledgement of the massive protests his presence always seems to stir. "It's not easy to host all these countries," he said, addressing Kirchner. "It's particularly not easy to host, perhaps, me."

The days of US economic and political domination of Latin America are on the wane.

The Mulch of the FTAA Fertilizes the Seeds of ALBA

Latin American leaders have been more successful in challenging the Bush administration's policies than Democrats in the US, because their opposition to Bush is based on a vision for a truly alternative economic model. Regional integration has built stronger relationships of trust among Latin American and Caribbean nations, looking to solve development problems by investing in their workforces and pooling collective resources.

This new regional integration is most often referred to as ALBA, the name President Chávez has given to the Bolivarian Alternative for the Americas. It is grounded in the principles of complementarity (rather than competition), solidarity (instead of domination), cooperation (not exploitation), and respect for sovereignty (instead of corporate rule).

As a concept, ALBA is based on the notion that Latin American countries can be stronger when they are united with each other rather than competing for the honor of top US lapdog. And in practice, ALBA is based on grassroots citizen participation, as the citizenry are both the implementers and the beneficiaries of the agreements under the banner of ALBA.

Petrosur is probably the most well-known of these agreements, an expansion of an historic program between Venezuela and Mexico with the poorest of Latin American nations to provide low-cost oil to poor Caribbean and Central American nations, and allow them to pay back with favorable financing or with goods and services.

This program has especially borne fruit between Cuba and Venezuela, where the latter has benefited from about 20,000 Cuban doctors and nurses providing free, preventative health care to 17 million Venezuelans, as well as assisting in the literacy program that has just taught over 1.5 million Venezuelan elders how to read and write.

The first day of the Summit, Argentina and Venezuela signed an agreement on agricultural development, building on their previous deal exchanging Venezuelan oil for Argentine beef and dairy products and contribute to Argentine economic recovery.

In an unusual gesture, Venezuela has also recently purchased millions of dollars of public bonds from both Argentina and Ecuador, helping to relieve financial pressures and dependence on foreign capitalist investors markets.

TeleSur is a new alternative news and culture television channel that¹s an alternative to the Atlanta-based CNN en español. With its headquarters in Venezuela, TeleSur can be seen on satellite in pockets around the world, and has financing from Brazil, Uruguay, Argentina, and Cuba, and correspondents across most of the region.

Leaders are also talking about founding a regional University of the South, and a Bank of the South to finance real development without the chains of debt.

An agroecology school spearheaded by the Brazilian Landless Peasant¹s Movement will soon be complemented by a new Latin American seed bank, designed to increase food security and keep control of the food supply in the hands of farmers, not multinational corporations.

At the Summit of the Americas, Chávez referred to the Kennedy program of the Alliance for Progress ­ an historical effort to stabilize Latin American economies in order to prevent the influence of communism. He suggested a new effort ­ an Alliance Against Hunger and Poverty, and offered the same financing over the next decade that Kennedy did - $10 billion.

From agriculture, to health and education, to public finance, to energy security, Latin Americans are creating innovative programs to solve the problems that centuries of colonization, decades of structural adjustment, and years of corruption have created. And Venezuela seems to be at the epicenter of this innovative change. That's why the World Social Forum (http://www.globalexchange.org/tours/722.html) chose to hold their next global gathering in Venezuela, this January 25-29, 2006.

The difference is, that the economic model promoted by the new Latin American leadership is actually delivering the benefits of democracy to their citizens ­ health care, education, clean water, jobs, real economic growth ­ without stifling the freedom or innovation of the private sector.

And with presidential elections in Bolivia, Brazil, Colombia, Ecuador, Mexico, Nicaragua, Peru and Venezuela next year, progressive forces are likely to pick up at least another two presidencies ­ with Evo Morales in the lead in Bolivia, and Andrés Manuel López Obrador the likely winner in Mexico.

Exhume the FTAA or Leave it Moldering: the WTO Ministerial in Hong Kong

We should celebrate the massive victory over the FTAA, the first free trade agreement with the US ever to be defeated. But we must also be on the lookout. Brazil¹s opposition to the FTAA is based primarily on the US's refusal to lower agricultural subsidies and therefore offer market access for Brazilian agro-industrial production of sugar, soy, and citrus. US negotiators have said that they can't lower subsidies or tariffs unless Europe does too ­ exactly the issue that is currently on the table at the World Trade Organization meetings in Geneva. The WTO Ministerial next month in Hong Kong might unlock the current standstill, which could open the coffin door of the FTAA. In addition, while lowering agricultural subsidies and tariffs would benefit Brazilian and Argentine exporters, the vast majority of poor countries would suffer net losses as they would see their imported food prices rice.

More likely, the failure of the Mar del Plata meetings will give more strength to developing countries to hold firm to their interests. Even the Wall Street Journal made the point that the "failure of the Western Hemispheric summit could make it more difficult for the U.S. to gather support for the Doha Round, and could embolden other countries to make more demands in those talks."

Two of the three recent WTO Ministerial meetings have ended in failure, and a third strike could inflict irreparable credibility damage. With the current deadlock, negotiators have already made a cynical call for a "lowering of ambition" for the Hong Kong meeting. That's so when it fails to produce progress on the negotiations, they can claim that it wasn't an important meeting anyways.

But we'll know the truth: the "free trade" Washington Consensus corporate globalization model is losing its grip on the world¹s imagination, because the model is a failure.

The peoples of Latin America not only know that Another World is Possible, they're building it right before our eyes.

Deborah James is the Global Economy Director of Global Exchange, www.globalexchange.org , and a frequent traveler to Venezuela.