Can the US and Bolivia get along? February 26, 2009Posted by rogerhollander in Bolivia, Foreign Policy.
Tags: Bolivia, bolivia healthcare, bolivia trade, bolivia water, bush administration, cuba embargo, DEA, Evo Morales, foreign policy, International law, Latin America, latin america government, latin america politics, latin america relations, mark weisbrot, obama administration, privatization, roger hollander, Venezuela, war on drugs, wto
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Photo: Dado Galdieri, AP
guardian.co.uk, Wednesday 25 February 2009 19.00 GMT
Perhaps – but first the Obama administration must settle differences over drug enforcement, diplomacy and trade
With the Obama administration‘s policy toward Venezuela pretty much decided, and the embargo on Cuba considered untouchable because no one is willing to risk losing support among Cuban-Americans in the swing state of Florida, that leaves Bolivia as a left government in the region where the hostility of the Bush administration could be quickly reversed.
However, there are a number of outstanding issues between the two countries. The United States and Bolivia currently do not have ambassadors. Bolivia expelled the US ambassador on 10 September, on the grounds that he and Washington were intervening in Bolivia’s internal affairs. Among other offences, the US embassy was caught trying to use Peace Corps volunteers and a Fulbright scholar for spying; US ambassador Phillip Goldberg had met privately with opposition leaders at a time when elements of the opposition were engaged in destabilising violence; and the US seemed to lend tacit support to the Bolivian opposition by not condemning this violence or even offering condolences when dozens of government supporters were massacred in Pando on 11 September.
The Bush administration responded to the expulsion of the US ambassador by expelling Bolivian ambassador Gustavo Guzmán. But there are also other important issues for Bolivia. On 26 September, the Bush administration suspended Bolivia’s trade preferences under the Andean Trade Promotion and Drug Eradication Act. The official reason was that Bolivia had not been cooperating sufficiently in the war on drugs. But according to the UN’s 2008 report, Bolivia’s coca cultivation had increased by just 5 per cent, compared to a 27% increase in Colombia, the biggest beneficiary of US aid in the region.
The Bolivians are eager to begin a new chapter of improved relations with Washington. To demonstrate this willingness, the Bolivian government refrained from filing a complaint at the World Trade Organisation (WTO) against the United States for the suspension of its trade preferences. Their legal case is quite solid: under WTO rules, countries are allowed to establish rules for preferential access to their markets, but the rules must be applied equally to all countries receiving the preferences. Before filing a complaint at the WTO, however, Bolivia wanted to see if the new administration is interested in improving relations.
Then there is another holdover from the Bush administration: Bolivia’s new constitution declares that healthcare, along with water and other necessities, is a human right and cannot be privatised. In keeping with their constitutional law, Bolivia asked the WTO for permission to withdraw the previous government’s commitment to open up its hospitals and healthcare sector to foreign corporations. According to the WTO’s procedural rules, if there are no objections to such a request within 45 days, it is approved. The EU, home to some of the big healthcare corporations that might have an interest in the issue, responded that it had no objections. On 5 January, the last day of the waiting period, the Bush administration objected.
The Obama team has not yet decided whether it will rescind the Bush administration’s objection to Bolivia’s WTO request. Presumably they will – if not, it would be an unmistakable signal of continued hostility. Far from being an arcane detail of constitutional or international law, it has real meaning to millions of Bolivians. The struggle against water privatisation was a significant part of the movement that brought Evo Morales to power. This is the political origin of the constitutional provisions establishing these essentials as human rights that cannot be infringed upon by private interests: many poor Bolivians had found themselves unable to afford water after it was privatised and user fees tripled.
Bolivia has also kicked out the US drug enforcement agency, and it does not look like they are coming back. To the Bolivians, the US is using the “war on drugs” throughout Latin America mainly as an excuse to get boots on the ground, and establish ties with local military and police forces. They see the whole process as destabilising and a threat to their sovereignty and democracy.
Despite all of these differences, it is still possible that Washington might choose to normalise relations with Bolivia. There are apparently some divisions within the administration over tactics. The “doves” apparently include Thomas Shannon, the current top state department official for the western hemisphere, and a holdover from the Bush administration. These officials can see that there is a public-relations problem in abusing Bolivia, the poorest country in South America and more importantly one led by the country’s first indigenous president, Morales. To most of the world, he is the Nelson Mandela of Bolivia, with his government bringing an end to centuries of apartheid-like exclusion of the country’s indigenous majority.
For the “doves” in the new administration, it would be better to avoid a public fight with Bolivia, so as not to distract from the guy who is sitting on what may be the largest petroleum reserves in the world – in Venezuela – and whom they have already successfully vilified in the media. On the other hand, there are hard liners who feel the need to “lay down the law” with Bolivia. We will soon know who has prevailed
Free Trade May Not be Fair Trade: The Pacts are Always Biased Toward the Economically Stronger Nations August 26, 2008Posted by rogerhollander in Free Trade, Political Essays (Roger).
Tags: cheap labor, economic exploitation, economic hegemony, export subsidies, Fair Trade, Free Trade, Free Trade Agreement of the Americas, Free Trade Latin America, IMF, Latin America, mexican corn, Mexico, NAFTA, poverty, protectionism, roger hollander, third world, trade tariffs, World Bank, wto
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(I had been asked by its organizers to try to arrange for Canadian representatives to the “Hemispheric Conference of Parliamentarians” that took place in Quito in 2002. The subject of the conference was free trade and the impact it would have on Latin American countries. I spoke by phone with the offices of several Canadian New Democratic Party (N.D.P.) MPs, without success. Not being a member of any parliament myself, I was therefore invited by the organizers to be an official observer of the Conference.
There were members of parliaments from most Latin American Countries in attendance, including supporters of the Chávez government in Venezuela and oppositionist Senators from embattled Colombia. Meeting them and hearing their opinions was what I found most interesting. I was put up at a small hotel with some of the other attendees, and I had lunch with the executive assistant of an Ecuadorian congressman whose name was, no kidding, Fidel Castro.
Several months later I was in Los Angeles studying much of the material I had brought back from the Conference and thinking about what I had learned. The article that follows, which was published as an opinion piece in the “Los Angeles Times,” November 20, 2003, was a result of this experience. It was picked up and reproduced by a number of Internet web sites – including a porno [!] site which I suppose must have only seen and misunderstood the word “trade.”)
By taking a look at how free trade works, we can see why virtually every labor, ecological and anti-poverty organization in Latin America is strongly opposed to the proposed Free Trade Area of the Americas, which is the subject of this week’s Miami gathering of trade ministers from Western Hemisphere nations.
The critics see thing this way: Let’s say that the Newcastle mining industry in Britain can produce a ton of coal at the cost of $10, which it sells on the domestic market. The industry thrives. At the same time, coal mining in Pennsylvania is just as efficient, but with transportation and British import tariffs the cost to export coal to Britain would be $15 a ton. No deal. But the Pennsylvania mining interests, desperate for export markets, have powerful lobbyists in Congress, which in turn enacts the “Coal Law,” providing a government subsidy of $5 a ton. Further, with a free-trade agreement between the U.S. and Britain abolishing the $2-a-ton tariff, there would be a net gain of $7 a ton for the Pennsylvania mining industry. Now its actual – if artificial – cost of production is $8 an exported ton, $2 cheaper than the $10-a-ton Newcastle coal. Voila! Coals to Newcastle. Goodbye Newcastle mining industry. Hello massive British unemployment.
The logic is simple. There are two ways to “protect” local industry: import tariffs and export subsidies.
Free trade eliminates tariffs, giving the economic advantage not only to those producers that are more efficient production-wise (largely because they are more capitalized) but also to those industries blessed with governments capable of delivering massive subsidies. In other words, to the already industrial and wealthy nations.
Coal miners in Newcastle may not have to worry about my hypothetical example, but corn growers in Mexico have every reason to panic.
Grains are to Mexico as coal was to Newcastle. Since the initiation of the North American Free Trade Agreement among the U.S., Canada and Mexico in 1994, the earnings of Mexican growers of corn, wheat and rice, along with beans, have plummeted, while the cost to the Mexican consumer has risen by 257%.
Mexico, the land where corn was first domesticated centuries ago, is now importing “cheap” subsidized U.S. agribusiness corn. Coals to Newcastle indeed.
With a dramatic difference in industrialization (70 U.S. tractors, for example, for every Mexican tractor) and the powerful agricultural lobby in Washington maintaining enormous subsidies, it is no wonder that Mexican farmers cannot compete once the protective tariffs are eliminated.
In theory, free trade should make everyone more competitive, replacing the inefficient with the efficient. The idea is that everyone should do what they are best at and purchase from their neighboring countries what those countries do best. Everyone gains.
In reality, for historical and geopolitical reasons, what Third World countries are “best at” is having their natural resources extracted and exported to the industrialized nations (which in turn sell back manufactured products at high cost) and having their populations exploited for cheap labor.
Advocates of free trade – the already developed industrialized nations and those in the Third World countries who do their bidding – argue in the abstract, taking advantage of words with positive connotations such as “free” and “trade.” In the real world, however, economics is not a matter of ideology but rather of production and markets and the intervention of government. Bilateral agreement between unequal partners are inherently biased in favor of the stronger – and the greater the disparity, the greater the bias.
This is exactly the situation that exists between the U.S. and Latin American Republics.
The World Trade Organization treaties and the proposed Free Trade Area of the Americas are characterized by undemocratic processes, such as secret and semi-secret pre-agreements and unrealistic deadlines, and economic blackmail including threats to withhold the International Monetary Fund and World Bank funding upon which the weaker nations’ governments have become dependent. Rapidly expanding U.S. military presence worldwide only serves to reinforce the economic hegemony.
The impoverished nations of the Western Hemisphere have much to fear from the proposed trade agreement.