news analysis - RIP: the Free Trade Area of the Americas
WORKERS, FEB 2005 ISSUE
In December 2004, the Presidents of Venezuela and Cuba announced the death of the Free Trade Area of the Americas - FTAA or ALCA in Spanish. The US proposed the idea nearly five years ago as a crude copy of the European Union model. The plan was to expand NAFTA, the North American Free Trade Area, combining Canada, the US and Mexico with every country (except one) in the Americas including the Caribbean, North, Central and South America.
There would be a single currency, the US dollar, and the economies of all American countries (except one) would be annexed to adopt free market economics, cuts in public expenditure, deregulation and privatisation, and to become fodder for US capitalism. This was to be the mechanism to ensure the survival of US capitalism. The US economy would flourish with access to the new markets, a huge pool of cheap labour and plenty of new opportunities for US companies to exploit the "liberalisation" of these additional economies.
Conferences of all American countries (except one) were held to thrash out details and whip any reluctant nations into line. The one country excluded decided to campaign against the FTAA, not on the grounds that it wanted to be part of it. Cuba said it would damage workers throughout the Americas and enlarge the US empire. Cuba argued for referendums -not annexation.
The dream crumbles
The US dream quickly began to crumble. The new government of Venezuela broke ranks and said it wanted no part of the FTAA. This action was followed by the new governments in Brazil and then Argentina, whose previous government had collapsed trying to service debts of $100 billion. The new government refused to accept IMF conditions for debt repayment and began to turn its economy around. In January 2005, Argentine President Kirchner told its creditors they could have 25% of the debts repaid but that was it, they were getting no more.
The new governments in Panama and Uruguay are making similar noises and other new governments in Costa Rica and Bolivia are rejecting neo-liberal economic policies. The Caribbean countries of CARICOM are demonstrating their independence. The South American common market MERCOSUR has called for regional unity in the face of US pressure for the FTAA. These countries have responded by creating the South American Community of Nations to defend continental sovereignty.
The final nail in the FTAA coffin has been the joint Venezuelan-Cuban declaration to promote the "Bolivarian Alternative for the Americas". The declaration is based on eliminating import tariffs and tax free profits on mutual investments. Cuba will guarantee $27 per barrel for Venezuelan oil, 2,000 scholarships in Cuba for young Venezuelans, transfer of Venezuelan technology to the Cuban oil sector and promotion of joint ventures. Known in Spanish as ALBA, this concept is seen as the antithesis of the FTAA (ALCA) being based on cooperation and solidarity, not the neo-liberalism of the FTAA.
At a time when the Ukraine is being served up on a plate for future annexation into the European equivalent of the FTAA, the EU, concepts of sovereignty, solidarity, mutual cooperation, defiance of the IMF and opposition to free market policies are in the ascendancy in the other hemisphere.