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
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.
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.
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
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.
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.
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.
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