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Conspicuously Absent at Summit of the Americas: a U.S. President Pushing the "Washington Consensus" or Trying to Revive the Hemisphere-Wide "Free" Trade Agreement

Statement of Public Citizen's Global Trade Watch

Posted: 4/17/2009

WASHINGTON, D.C. - Perhaps the most interesting feature of the Summit of the Americas is what is not on the agenda, Public Citizen said today. At this fifth gathering of regional heads of state, the goal that was the founding purpose of this summit process - hemispheric expansion of the North American Free Trade Agreement (NAFTA) model of investor rights, deregulation, privatization and "free trade" - is noticeably missing in an agenda spanning topics from climate change to the economic crisis.

"The conspicuous absence of the summit's usual end-to-end focus on pushing more-of-the-same free trade agreements and deregulation signals the end to a regional integration model that has proved extremely damaging to many," said Lori Wallach, director of Public Citizen's Global Trade Watch division. "It is quite stunning that this summit is focused on trying to deal with problems that in no small part were caused by the model of hemispheric integration fiercely pushed at past summits."

U.S. President Barack Obama will be shaking hands at this summit with many leaders who were elected because of the backlash against the neoliberal policies previous U.S. presidents pushed on the region for two decades.

"Leaders throughout the hemisphere face broad public demand at home for real change in trade and economic policy, and some have begun creating new approaches. Others, like Obama, have committed to do so," Wallach said. "With many regional leaders elected on popular mandates to 'change' course from the failed, one-size-fits all neoliberal policies of the past two decades, Obama's commitments to renegotiate NAFTA and change failed U.S. trade policies fits well with other leaders' calls for the policy space needed to rebuild economies that deliver tangible benefits for the majority."

The negative effects of the economic model promoted at past Summits of the Americas have been well documented. Most recently, the findings of several major studies conducted by Tufts University's Global Development and Environment Institute on the record of hemispheric economic and trade policies showed that even when countries succeeded in attracting foreign investors, the new firms largely operated as "enclaves" with limited connections to the domestic economy.

Worse, these foreign investors put many local firms out of business while total investment levels failed to rise with the inflow of foreign investment. Environmental damage resulting from the current model was also significant. (Visit Tufts' Global Development and Environment Institute for more information.)

The institute's studies on Mexico provide significant long-term evidence of the failure of the past model. Once highlighted as the model of free trade's promise, the failure of Mexico's development strategy after 15 years of NAFTA is evident.

"The lived failure of the neoliberal model has caused seismic political shifts across the Americas and within the United States, as shown by the election of 72 new Congress members since 2006 who committed to change the current failed trade model and replaced representatives who had supported it, as well as Obama's own election on a series of similar commitments," said Wallach. "After spending four Summits of the Americas and 15 years focused on expanding the failed NAFTA model, leaders of the Americas may finally have heard - and will act on - the public's call for a new day on trade."

Obama's campaign commitments included the antithesis of past Summit of the America agendas, which focused on expanding NAFTA to a hemisphere-wide Free Trade Agreement of the Americas:

  • Renegotiation of NAFTA and the Central America Free Trade Agreement (CAFTA) to safeguard domestic environmental and consumer protections against excessive foreign investor privileges and rights;
  • Renegotiating those pacts to include binding labor and environmental obligations;
  • Ensuring "trade" agreements do not require privatization of essential services, such as health care, pensions, education and drinking water; and
  • Safeguarding procurement policy space to promote environmental, development and labor rights goals

Also see Obama's written responses to questionnaires (PDF) on these issues.

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