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  Volume 101, No. 122 Monday, April 2, 2001  

What's good for corporations isn't necessarily what's good for us

The first five years of NAFTA have been a disaster

By Travis Metcalfe
Daily Texan Staff

In the early 1900s, the conventional wisdom was "what's good for General Motors is good for America." After the auto-maker was convicted of orchestrating the demise of public transportation systems in dozens of cities across the United States, some people began to doubt whether General Motors really had the public interest in mind.

Despite a horrific record of placing profit above all other considerations, multi-national corporations like GM still want the American public to believe that what's good for big business is good for everyone. The latest pill that they would have us swallow is the so-called Free Trade Area of the Americas (FTAA), which would essentially expand NAFTA to cover the entire Western Hemisphere. Business leaders and politicians will meet in Quebec in mid-April to finalize the details of the plan. Citizen activists from around the world will be there to greet them.

Consumer advocate and former Green party presidential candidate Ralph Nader refers to the FTAA as "NAFTA on steroids." Public Citizen, one of the many watchdog groups founded by Nader, recently released a report card evaluating the first five years of NAFTA to see how the reality of the trade agreement compared to the rhetoric used to rally public support for it in the early 1990s. The results were astounding. In every category, from job creation and trade balance to environmental protection and consumer safety, the first five years of NAFTA have been a disaster. Only one aspect of the agreement lived up to its promise corporate profits soared to record levels.

Adam Smith, who introduced the theory of free market economics in his 1776 book The Wealth of Nations, would roll over in his grave if he heard about NAFTA and the FTAA. Smith points out quite explicitly in his book that in a truly free market, huge profits are impossible because competition ensures the lowest price for consumers. He also notes that free markets cannot exist between nations with significantly different standards of living because the incentives for exploitation of the weaker economy are too strong.

In spite of its doublespeak name, the Free Trade Area of the Americas has nothing to do with free trade. It has everything to do with protectionism for corporate profits at the expense of concerns like public health and fair wages.

Under the FTAA, U.S.-style protection of patents will be extended to all of Central and South America. In practice, this will prevent generic drug manufacturers in Brazil from producing medications to treat HIV and providing them at market prices. Instead, the U.S. corporations that own the patents on these drugs will have a protected monopoly, and the price of the drugs will be inflated by several thousand percent above the manufacturing costs. Patents were intended to encourage innovation by allowing inventors to recoup their research and development costs before competition would be allowed. With the grossly inflated prices drug companies charge their customers, it only takes a few months to recover these costs, but their monopolies continue for many more years.

Workers on both sides of the border have suffered under NAFTA, and the FTAA would only spread the misery. In the United States, the rate of illegal threats by corporations to close their plants and relocate in Mexico has more than tripled since NAFTA was adopted. They successfully use this tactic during union organizing drives to keep wages artificially low even while worker productivity is increasing dramatically. At the same time in Mexico, wages fell 29 percent in the first few years of NAFTA while productivity increased 36 percent. Labor organizers in both countries know that resisting FTAA is not about job protectionism in either country. They are united against it because they know it would be bad for all workers.

Corporations argue that globalization is inevitable, and those who resist are just anti-progress. But many opponents are not against globalization itself, they are against corporate control. Organizations like Global Exchange have proposed detailed alternatives based on fair trade, human rights and democracy rather than "free" trade, corporate rights and plutocracy.

What's good for corporations has been demonstrably bad for the rest of us. The time to educate yourself about the FTAA is now, before the corporate spin-doctors unleash their propaganda in full force.

Metcalfe is a doctoral student in the Department of Astronomy