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Corporate globalisation

ronya | 11.09.2003 13:41 | Globalisation

Background information to Anti-WTO protests in Cancun:
On corporate globalisation, NAFTA (North American free Trade Agreement) and FTAA (Free Trade Agreement of Americas.

What is the FTAA and Corporate Globalization?
Since the mid-sixties, the neo-liberalisation of trade relationships has led to the increasing industrialisation of specific areas – free zones, an example is the border between Mexico and the US, a result of NAFTA (the North American Free Trade Agreement), signed by Canada, U.S. and Mexico in 1994) which removed national protection barriers, tariffs, labour rights, environmental and commercial regulations across the border.

The context for this development has been determined by changes in the global economy that have permitted the relocation of the production process around the world. In the "post-industrial" era, the economic activities of large corporations become globally dispersed according to the availability of cheap non-unionised labour and have led to the "global assembly line" that is not located according to the specifics of city or national interest.
The Free Trade Area of the Americas (FTAA) is the formal name given to an expansion of NAFTA and would include nearly all of the countries in the western hemisphere and create the world's largest free market zone— affecting 650 million people and $9 trillion in capital.

The aim of the FTAA is to implement the already clearly failed NAFTA model of increased privatisation and deregulation worldwide. The imposition of the FTAA agreement rules would empower corporations with a set of tools to constrain governments from setting standards for public health and safety, to safeguard their workers, and to ensure corporations do not pollute the communities in which they operate. Effectively, these rules would handcuff governments' public interest policymaking and enhance corporate control at the expense of citizens throughout the Americas.
FTAA would deepen the negative effects of NAFTA as we seen in Canada, Mexico and the U.S. over the past decade, expanding the damaging consequences of NAFTA's to another 31 countries involved.
Intensifying NAFTA's model means that exploited workers in Mexico could be leveraged against even more desperate workers in Haiti, Guatemala or Brazil by companies seeking tariff-free access back into U.S. markets.
A quick look at NAFTA's legacy reveals disastrous consequences:
· An estimated 395,000 U.S. jobs have been lost since NAFTA as companies relocated to Mexico to take advantage of the weaker labour standards. These workers usually find jobs with less security and wages that are about 77% of what they originally had.
· The U.S. trade surplus with Mexico has become a deficit for the first time.
· Despite promises of increased economic development throughout Mexico, only the border region has seen intensified industrial activity. Yet even this small "gain" has not brought prosperity. Over one million more Mexicans work for less than the minimum wage of $3.40 per day today than before NAFTA, and during the NAFTA period, eight million Mexicans have fallen from the middle class into poverty.
· In addition, the increase of border industry has created worsening environmental and public health threats in the area. Every day, 44 tons of hazardous waste are disposed of improperly. In this time, birth defects have increased dramatically. In the first year of NAFTA in one Texas border county, 15 babies were born without brains -- an unprecedented 36% increase from the year before!
· Along the border, the occurrence of some diseases, including hepatitis, is two or three times the national average, due to lack of sewage treatment and safe drinking water.
· Although it's hard to imagine that anyone would push for more of a failed model like this, what little we do know about FTAA is that is likely to look quite a bit like NAFTA. In fact, some FTAA texts are reported to be literally based on NAFTA, with additional countries added in. We know what results to expect!
What is the current status of the FTAA negotiations?
All the negotiating groups have held meetings witht 2-3 month intervals throughout the 2000 - 2002.
The negotiators have laid out the positions of their governments on the nine core issues. A complete "bracketed" (draft) text was ready in December 2000. The Vice ministerial level meetings on FTAA NAFTA expansion began in early 2001, such as the Summit in Quebec. The next ministerial-level Summit of the Americas is planned to happened in Miami 17-21st of November 2003. The agreement is to be complete and implemented in 2005.

Who is involved in the FTAA negotiations?
After the successful imposition of the NAFTA, U.S. officials organized a Summit of the Americas in Miami in December 1994. Trade ministers from every country in the western hemisphere (except for Cuba) agreed to launch negotiations to establish a hemispheric free trade deal.

After the "Miami Summit," not until the "Santiago Summit" in Chile in April 1998 the 34 nations participating set up a Trade Negotiations Committee (TNC), consisting of vice ministers of trade from every country and headed by Dr. Giavarini (Argentina). Negotiators also agreed on a structure of nine working groups to deal with the major areas they agreed to cover under FTAA: agriculture, services, investment, dispute settlement, intellectual property rights, subsides and anti-dumping, competition policy, government procurement and market access. You would never know it from news reports, but since late 1999, the working groups have been meeting every few months to lay out their countries' positions on these issues and try to develop the treaty language.

As with the Multilateral Agreement on Investment (MAI), many Members of the U.S. Congress have no idea this was happening. Congress has set no goals for the U.S.'s participation in these talks and has not delegated to the Executive branch its Constitutional role of setting the terms of international commerce.
Nevertheless, a variety of corporate committees advise the U.S. negotiators; under the trade advisory committee system, over 500 corporate representatives have security clearance and access to FTAA /NAFTA expansion documents.

Organizations such as the Organization of American States (OAS), Inter-American Development Bank (IDB), and the UN Economic Commission for Latin America and the Caribbean (ECLAC), collectively known as the "TriPartite Committee," also provide direction.

On a very early stage, non-governmental civil society organizations (NGOs) demanded working groups on democratic governance, labour and human rights, consumer safety and the environment. These claims were rejected, and instead a Committee of Government Representatives on Civil Society was established to represent the views of civil society to the TNC. Yet this committee is little more than a mail in-box. It has no mechanism to incorporate civil society concerns and suggestions into the actual negotiations, so these are mainly ignored.

(The U.S. is represented by the U.S. Trade Representative's office (USTR), headed by Charlene Barshefsky as of November 2000. The lead USTR negotiator on FTAA is Peter Allgeier.)

What will FTAA's practical effects be?
The FTAA negotiations are occurring in secret and no texts have been made publicly available, we cannot know yet the details of the drafted treaty text. Conversations with the USTR (the U.S. Trade Representative's office) have revealed what to expect once a final agreement is unveiled – which will be when too late to change it!

Essential Social Services Endangered: The FTAA will contain a series of commitments to "liberalize" services, which is much like the General Agreement on Trade in Services (GATS) within the WTO. "Services" is a broad category that includes education, health care, environmental services (which can include access to water!), energy, postal services and anything else we pay for that isn't a physical object. Possible effects of the FTAA services agreement include:
o removal of national licensing standards for medical, legal and other key professionals, allowing doctors licensed in one country to practice in any country, even if their level of training or technological sophistication is different;
o privatization of public schools and prisons in the U.S., opening the door to greater corporate control, corruption and the temptation to cut critical corners (such as medical care for inmates or upkeep of safe school facilities) in the interests of improving profit margins; and
o privatization of postal services transferring U.S. Postal Service functions to a few delivery companies like FedEx, which could then send postal rates through the roof.
Nafta sets precedents in the relation of “investor - to states” suits:
Like in NAFTA's Chapter 11, the USTR says that FTAA will include "investor-to-state" suits. These allow corporations to sue governments directly for the removal of standards or laws designed to protect public health and safety, which may cost the corporations a little more in operating costs. In other words, the FTAA would provide a hemispheric "regulatory takings" clause that explicitly values corporate profits over human costs. NAFTA cases that set a likely precedent for FTAA actions under this provision include:
· The Canadian funeral home chain Loewen Group used NAFTA investor protections to sue the U.S. government for $750 million in cash damages after a Mississippi court found Loewen guilty of malicious and fraudulent practices that unfairly targeted a local small business. (NAFTA permits companies to sue governments over rulings or regulations that may potentially limit their profits.) Loewen argues that the very existence of the state court system violates its NAFTA rights.
· The U.S.-based Ethyl Corporation forced Canada to pay $13 million in damages and drop its ban on the dangerous gasoline additive MMT, a known toxin that attacks the human nervous system. Other regulations protecting public health and the environment remain open for attack under NAFTA and FTAA.
· In a similar case, U.S.-based Metalclad Corp. sued a Mexican state to allow a toxic waste disposal site, claiming that the environmental zoning law forbidding the dump constituted an effective seizure of the company's property a seizure that, under the property rights extended by NAFTA (and to be perpetuated in FTAA), requires that the offending government compensate the company.
Food, Agriculture & GMOs: The U.S. is trying to force all countries to accept biotechnology and genetically modified (GM) foods in which unregulated U.S.-based corporations have taken a lead. Yet food security organizations all over the world agree that these technologies will increase hunger in poor nations. Being forced to buy expensive patented seeds every season, rather than saving and planting their own, will force traditional subsistence farmers in the developing world into dependency on transnational corporations and closer to the brink of starvation. If the U.S. position wins out, FTAA will promote the interests of biotech and agribusiness giants like Archer Daniels Midland (ADM), Cargill and Monsanto over the interests of hungry people in developing nations.

Intellectual Property Rights (IPR): The U.S. is trying to expand NAFTA's corporate protectionism rules on patents to the whole hemisphere. These rules give a company with a patent in one country the monopoly marketing rights to the item throughout the region. These rules are enforced with cash fines and criminal penalties, making these rules even harsher than the WTO IPR rules. These rules have been used as justification for pharmaceutical companies to quash compulsory licensing mechanisms to allow competitor companies to manufacture a drug in exchange for a fee for "renting" the patent. This monopoly control allows pharmaceutical corporations to keep drug prices high and block production of generic versions of life-saving drugs, which spells disaster for the ill and impoverished, especially in developing nations. These rules also allow companies to "bioprospect" and lock down patents for traditional medicines that are considered "traditional knowledge," effectively robbing indigenous people of their cultural heritage to fatten corporate wallets.

Latinamerica – a geoeconomic zone for corporate globalization
The U.S. government and powerful international financial institutions such as the World Bank, IMF and Inter American Development Bank are restructuring societies around the world to serve transnational capital and powerful corporations. The majority of global trade flows between the Asia-Pacific and U.S. region are transforming Latin America into a highly geoeconomic zone for the expansion of corporate-led globalization.

The multitude of free trade projects proposed for the region, such as the Free Trade Area of the Americas (FTAA), the Central American Free Trade Agreement (CAFTA) and the Plan Puebla Panama (PPP), are not spreading “freedom” as its PR machinery claims. On the contrary, these projects are leading to direct attacks and limitation of freedom on workers, indigenous peoples, women and the environment.

Deeply indebted to the US through multilateral institutions like the IMF, IDB and World Bank that are US dominated and strengthen through global organizations such as the WTO (World Trade Organization) and regionally in agreements like (FTAA, CAFTA) free trade agreements and massive industrial regional infrastructure projects such as the (PPP).

Latin American governments use as a commodity, in this unequal trade, essential human services; such as health, education, and water, in a system many refer to as "Pay or Die".

All these forces are together focussing efforts to create a singular Latin American free trade zone that responds to global capital and corporate needs, while failing to respond or ignoring to the majority of peoples’ needs. As a result of this, a large group of the population is leaving their communities, migrating to cities in the United States in search for economic survival, only to face repression and economic hardship.

If the FTAA, CAFTA and the PPP have their way they will:
· Deny countries the right to protect vital local industry, selling essential services and natural resources such as health care and education, water, electricity to Trans-national Corporations.
· Displace thousands of rural and indigenous peoples with massive industrial development projects including hydroelectric dams, mining, oil drilling, commercial agriculture and forestry.
· Deny countries the right to regulate speculative investments-leaving national economies open to the wishes of a few trans-national financial corporations.
· Give corporations the right to patent indigenous seeds, medicines and gene sequences, forcing communities to buy back the seeds that they own.
· Deny governments the right to reject genetically modified crops.

Ten reasons to oppose FTAA
During the last three years, representatives from 34 countries have been working in secret on plans to expand the North American Free Trade Agreement (NAFTA) to Central America, South America and the Caribbean. The Free Trade Area of the Americas (FTAA) is another example of the free-market fundamentalism that has created a global race-to-the-bottom threatening the environment, families' livelihoods, human rights, and democracy. Once again, a sweeping "free trade” agreement is in the works that puts commercial interests above all other values.

1. The FTAA Expands a Proven Disaster
The FTAA is essentially an expansion of NAFTA. NAFTA has proven a nightmare for working families and the environment. A look at NAFTA's legacy shows why these kind of "free trade" agreements should be opposed.

Working families suffer: In the US, almost 400,000 jobs have been lost since NAFTA, with workers' new jobs paying, on average, only 77 % of the wages of their earlier employment; in Mexico since NAFTA, one million more Mexicans earn less than the minimum wage, and 8 million families have slipped from the middleclass into poverty.

The environment suffers: In the maquiladora (assembly line factories) zones along the US-Mexico border, the increased pollution and the improper disposal of chemical wastes has dramatically increased rates of hepatitis and birth defects.
NAFTA should be repealed, not expanded.
2. The Agreement Is Being Written in Secret
Despite repeated calls for the open and democratic development of trade policy, the FTAA negotiations have been conducted in secret.

Discussions around the FTAA began in 1994 when US trade officials, emboldened by the passage of NAFTA, gathered trade ministers from across the hemisphere in Miami for a summit. Talks heated up in 1998, when trade ministers from the hemisphere met again in Santiago, Chile. Since then, negotiations have been taking place every few months, and the first working draft--with countries 'positions already set--was ready in April 2001 in Quebec City, Canada.
Although Congress hasn't set goals for US participation, hundreds of corporate representatives are involved in the process, advising the US negotiators and helping to write the rules. At the same time, however, citizens groups, and even the United Nations, have not been able to incorporate their concerns and suggestions into the talks.
3. The Agreement Will Undermine Labor Rights and Cause Further Job Loss
The NAFTA experience demonstrates how basic labour rights and the interests of working families are eroded by "free trade" agreements that lack enforceable labour protections. Corporations move high-paying jobs to countries with lower wages and bust unionisation drives with threats to transfer production abroad. According to a study conducted under the auspices of NAFTA's labour side agreement, 90 percent of 400plant closings or threatened plant closings in the US in a five-year period occurred illegally in the face of a union organizing drive. This "race-to-the-bottom" will accelerate under FTAA as corporations pit exploited workers in Mexico against even more desperate workers in countries such as Haiti and Guatemala.
4. The Agreement Will Exacerbate Environmental Destruction
The export-driven growth models promoted by ”free trade” agreements andthe policies of the World Bank and the IMF have destroyed ecosystems around the world. Under this unsustainable model, many countries in the Global South cut down their forests, over fish their waters and exploit other natural resources to earn hard currency. Since NAFTA, 15US wood product companies have set up operations in Mexico, and logging there has increased dramatically. In the Mexican state of Guerrero, 40 percent of the forests have been lost in the last eight years, and massive clear cutting has led to soil erosion and habitat destruction.
5. The Agreement Will Put Lives at Risk
The FTAA would expand NAFTA's rules on monopoly patents to the whole hemisphere. This means that companies with a patent in one country will have the exclusive right to market their products throughout the hemisphere. Intellectual property rules are especially important for the pharmaceutical industry, which uses the regulations to stop countries from producing less expensive versions of name brand drugs. Currently Brazil is one of the top manufacturers of the types of generic drugs that are essential for the majority of the world’s poor who can't afford drugs produced by US companies. If expanded intellectual property laws prevent the Brazilian government from making life-saving drugs, the AIDS crisis and tuberculosis epidemics will worsen, and people around the world will suffer.
6. The Agreement Will Lead to Privatization of Essential Services
The FTAA is expected to contain commitments to privatise services such as education, health care, and energy and water utilities. Such deregulation would especially harm working class communities and communities of colour. In some countries, these privatisations are already occurring, and those least able to pay for vital services are the ones who suffer the most. When Bolivia privatised its water utility, water rates increased 200 percent, leading to riots that resulted in six deaths.
7. The Agreement Will Provide a Backdoor for the MAI
The FTAA may provide a back door for establishing in the Western Hemisphere provisions of the Multilateral Agreement on Investments(MAI), a kind of "investors' rights" treaty defeated by citizens in1998. Already, the US trade representative has said the FTAA will include provisions for "investor-to-state" lawsuits. These allow corporations to sue governments for compensation if they feel that any government action, including the enforcement of public health and safety laws, cuts into their profits. Such lawsuits could be used to dilute US laws that promote local businesses.
8. The Agreement Will Spread the Use of GMOs
US trade negotiators are trying to force other countries to accept genetically modified organisms (GMOs). But environmental groups warn that these technologies haven't been adequately tested, and food security experts say GMOs could increase hunger in poor nations. Farmers have traditionally saved their seeds from year to year, but as multinational corporations patent GM seeds these farmers will be forced to pay for seeds, pushing them further into dependency.
9. The Agreement Will Increase Poverty and Inequality
"Free trade" is not working for the majority of the world. During the most recent period of rapid growth in global trade and investment--1960 to 1998--inequality worsened internationally and within countries. Without debt cancellation and rules to curtail rampant capital speculation, countries in the Global South will remain dependent on the Global North, inequality will increase, and the hope of achieving sustainable development will be farther off.
10. There Are Proven Alternatives
Policy makers and pundits often try to convince us that corporate globalisation is an inevitable phenomenon. In fact, the current economic processes known as "globalisation" have been defined and driven by a very small number of corporations. Now people around the world are creating an alternative grassroots globalisation. Citizens’ groups from across the Western Hemisphere have written an "Alternative Agreement for the Americas" that offers a picture of what socially responsible and environmentally sustainable commerce would look like. You can find the document on the Global Exchange website.

Mobilization against the FTAA in Miami November 17th – 21st Novemebr 2003
Free Trade Area of the Americas (FTAA) ministerial scheduled for November 17th – 21st is in downtown Miami.
Be a part of this mobilization against corporate-controlled globalisation – and help Stop the FTAA!
Teach-ins and seminars, reality tours, alternative ministerial, concerts and forums, rallies and marches, and many more ways to get our message out! Activists from around the world linking the local issues to the global fights and building solidarity and alternatives will join people from Florida and around the country.
· It’s being negotiated without Citizen Input
· The FTAA will undermine Labour Rights, Push Down Wages and cause Job Loss
It will hasten Environmental Degradation
· The FTAA will hurt Family Farmers
· It will lead to privatisation and extreme deregulation of Essential Services
· Corporations will be given outrageous rights to sue Governments
· The FTAA will jeopardize consumer safeguards
· It will spread the use of genetically modified organisms (GMOs)
· It will deny access to lifesaving medicines for millions of people
· The FTAA will make the rich richer and increase poverty throughout the hemisphere
Economic oppression and military repression are flip sides of the same coin. The economic terrorism inflicted on the poor that accompanies "free trade" could not stand without the repressive military apparatus that brutalizes people who rise up to resist. Those who oppose the globalisation of greed and those who work to end US training of repressive foreign armies are joined in one effort.

Concerned citizen from all over North America will converge from November 19-21, 2003 in Miami, Florida to voice their opposition to the Free Trade Area of the Americas agreement (FTAA) and from November 22-23 in Ft. Benning, Georgia to speak out against the School of the Americas (SOA).

Miami will be the host of the FTAA ministerial meeting, which brings together the trade ministers of the hemisphere to launch the final stage of the FTAA negotiations. Fort Benning is the home of the School of the Americas, where repressive Latin American troops are being trained as the military muscle to enforce exploitative policies.


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