[Marxism] Bush fails to get even a token verbal concession on FTAA

Joaquín Bustelo jbustelo at bellsouth.net
Sun Nov 6 03:54:06 MST 2005

	Do you want to know how bad it went for Bush in Argentina?

	The guy left Saturday before the summit was over. Said he didn't
want to be late for a barbecue with Lula. The Barbecue is on Sunday. 

	Despite all manner of threats and inducements, a solid bloc of
five countries prevented the Mar del Plata summit from giving Bush even
a token, verbal concession on the Free Trade Area of the Americas. And
this bloc had tacit support and encouragement of some other governments
that didn't want to step directly into Washington's line of fire. 
	The imperialists had been looking to get language saying that
stalled talks on the hemispheric accord would restart in April, or some
other point in the New Year. Instead of this, which would have been
mostly a verbal concession, the final declaration contains a statement
by Argentina, Brazil, Paraguay, Uruguay and Venezuela stating

	 "The conditions do not exist to attain a hemispheric free trade
accord that is balanced and fair with access to markets that is free of
subsidies and distorting practices."

	As is obvious from the statement, what most galls Latin American
countries (and not just these five) is that "free trade" negotiations
are always aimed at dismantling the protection of the national interests
of Third World countries, but they don't deal with what are tremendously
trade-distorting practices that only very rich countries can afford and
that screw the Third World.

	The most irritating item are the billion-dollar-a-day subsidies
that the U.S., Europe and Japan give to their agricultural sectors.
Third World countries can't afford similar subsidies and third world
farmers can't compete in markets where Europe and the United States
constantly dump huge surpluses at prices that do not have the remotest
connection to the cost of production. The United States has arrogantly
refused to put its subsidies on the table in the FTAA talks saying
they're negotiating on that with the Europeans in the framework of WTO

	But another form this takes is all sorts of shenanigans and
manipulation of the oil market and other commodity markets. The major
imperialist countries maintain "strategic" crude oil reserves which are
used as a club to prevent third world oil producers from obtaining top
dollar for their products at moments of maximum demand or market
disruption, guaranteeing instead that any extra income winds up as
windfall profits of the imperialist oil companies. That's what happened
recently in the United States, when distilled petroleum product prices
(gasoline, diesel, jet fuel, etc.) reached levels corresponding to $100
or more per barrel of crude oil, but crude prices stayed mostly at the
mid-$60 dollar level, in other words, in a really FREE market, crude oil
producers could have been getting up to half again as much for their
oil, at least for a few weeks, and that money went to imperialist
corporations instead.

	And this is an ongoing scam. Some 95% of U.S. refinery capacity
is now back or will be in a few days, but more than two thirds of Gulf
of Mexico crude oil production remains shut down. Under these
conditions, one would expect the domestic shortfall in crude production
to have a cumulative effect in driving up crude oil prices. That's how
free-market capitalism is supposed to "reward" those providing a scarce
resource and create additional incentives for increased production. But
that isn't happening. 

	By opening U.S. and European oil reserves, the price of crude
oil didn't rise nearly as much as the price of distilled products, and
the result was staggering jump in third-quarter profits for the oil
majors, which control refining and distribution. These profits beat all
previous records for quarterly operating results despite lower
production and a spike of costs associated with the hurricanes. And mind
you, those third quarter results are for a 3-month period that only
included windfall profits from the Hurricanes in September.

	What this means is that the opposition of these five countries
is very solid because it is materially grounded. Brazil and Argentina
have large agricultural industries and Venezuela has oil. And the
economies of Uruguay and Paraguay are intertwined with those of their

	But there were also political factors involved. With Bush's
approval rating at Nixonian levels, growing indications of a recession
in the U.S. next year, and the split in the U.S. Republican levels
between the nativist/America first/religious fundamentalist sector on
one side and more world-minded industrial, commercial and banking
interests on the other, there really isn't any point to negotiating
anything with Bush. He can't deliver, and whatever concessions Latin
Americans give now would simply become the starting point for new
imperialist demands when a new president takes office.

	On the Latin American side, Fox and Lula are both lame ducks,
and Kirchner in Argentina was in a way quite eloquent at the summit in
saying that his country was not willing to repeat the neoliberal free
market experiment of the 90's which produced such an unmitigated
catastrophe. More to the point, the examples of his own deposed
predecessors and overthrown ex-presidents in Bolivia and Ecuador show
what happens to those rulers who would try.

	Chavez, of course, has absolutely no intention of letting his
country get raped like Mexico was by the United States with NAFTA.

	Some U.S. media reported that there was a move afoot to go ahead
with an FTAA of 29, i.e., minus those five countries. That they took
this White House-inspired spin spread by Mexico's Vicente Fox, who acted
as chief ventriloquist's dummy for the Bush regime, only shows the
abysmal cultural level (in the Spanish sense of the term, i.e., the
abysmal lack of general knowledge about the world) prevalent among even
the foreign desk staff and international correspondents of American
corporate journalistic outlets.

	For the U.S., there is, quite simply, *no point* to an FTAA
without Brazil, much less without Argentina, Venezuela and Brazil.
Especially because the U.S. already has NAFTA with Mexico, CAFTA with
Central America, a bilateral deal with Chile, and is working on another
one with some of the Andean countries. Although for the South Americans,
what makes the most sense is a trade bloc of that region, i.e., uniting
the Mercosur and the Andean Pact, which is already in the works.

	To understand this you need only look at rounded-off figures for
population (for Latin America CEPAL 2005, in millions) and then GDP (CIA
Factbook 1994 estimate, purchasing power parity in billions of USD) for
several Latin American countries (I've included also Germany, France,
Britain and Russia for comparison). [I prefer rounded off figures
because both the population and economic numbers are really estimates
and do not have the precision that using three or four significant
figures implies.]

Germany    82 $2,400
Britain    60 $1,800
France     60 $1,700

Brazil    188 $1,500
Russia    150 $1,400

Mexico    106 $1,000

Argentina  39 $  500

Colombia   46 $  280
Peru       28 $  160
Chile      16 $  170
Venezuela  27 $  150
Ecuador    13 $   50

What needs to be added is that Brazil's economy is if anything stronger
than the comparison with Mexico suggests. It has tremendous agriculture
and a large industrial base, if somewhat deteriorated, and important
modern industries such as aerospace and nuclear energy. And politically,
I think it is clear that Lula (whatever his own subjective view of
himself, or the view his followers have) represents a serious national
bourgeois effort to widen the country's relative autonomy from

Meanwhile, Mexico increasingly is taking on many of the characteristics
of a gigantic Bantustan, a reserve pool of labor for the U.S. economy.
Like in the case of Blacks in the old apartheid South Africa, Mexican
immigrant workers (especially the undocumented, but not just that layer)
are stripped of legal rights and social protections in order that they
can be more easily super-exploited. Remittances from these workers will
reach $20 billion this year, making it the country's second largest
source of foreign exchange, and are growing at a rate of 20% or more a
year, which means within two or three years they will become the
country's main source of foreign exchange, as is already the case with
some Central American countries. The 20% growth figure (this year's
projection, last year's actual was 24%) is suggestive of how rapidly the
country is being transformed --from the U.S. point of view-- from a
source of oil to a source of wage slaves.

Politically, what is particularly striking is Brazil joining in the
(clearly) Venezuelan-inspired statement that an FTAA that would be in
the interests of the countries of Latin America is not possible. This
could represent something of a shift in Brazil's position compared to
what it took in Miami almost two years ago, when, yes, it opposed
Washington's overall scheme but instead of letting the project collapse,
Brazil came up with a formula that would allow individual countries to
opt in or out of various parts of the pact, clearly an absurdity from
the point of view of a customs union, but politically it had the effect
of keeping the FTAA project around and even facilitated or justified
Washington's plan B of opening Latin American markets one or a few
countries at a time.

However, comments by Brazil's foreign minister make clear that, for
Brazil, unlike Venezuela, the statement that "conditions do not exist"
for a fair FTAA carry an implicit but emphatic *right now.* Brazil's
message is that only sweeping concessions in the Doha round of world
trade talks by the imperialists on the issue of agricultural (and
perhaps other subsidies -- remember, Brazil is in the airplane business
and expanding into the rocket business) would make a "fair" FTAA

But even so, cohering these five countries around a no to the FTAA, is
therefore an advance, although we should have no illusions that this
means and end to Washington's attempts to further subjugate various
Latin American countries through trade deals, both between the U.S. and
one country or a handful of countries (the CAFTA model) as well as
through the WTO.



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