Another bilateral arm-twisting

What we cannot achieve multilaterally, we snatch bilaterally – this is the logic of EU and USA commercial policies in Central America, says a Mexican activist

When small and big development countries gang up at the WTO, it is difficult to make the neoliberal ideas fall into place in the final communiqués. “However, what we cannot achieve multilaterally, we snatch bilaterally”. That is the logic underlying the commercial policies of both the EU and the USA in Central America and other small economies, according to Alberto Arrollo, a Mexican trade activist who visited Nicaragua at the same time that the EU, Latin America, and the Caribbean countries were holding their third summit in Vienna earlier this month.

The outcome of the Vienna meeting confirms his analysis. In addition to the World Bank and International Monetary Fund structural adjustment programmes and the US trade agreement with Central America and the Dominican Republic (CAFTA), the region is now headed for another bilateral arm-twisting exercise. Thus Central America and the European Union decided to “launch negotiations for an Association Agreement, including the establishment of a Free Trade Area”, and the two parties expect “a rapid process of negotiations”. The joint communiqué does not once mention the Doha round, although it is the WTO development round which calls for special and differentiated treatment of developing countries, meaning that poor countries will have more time to phase out tariffs than rich countries.

Along quite different lines, the South American countries associated in MERCOSUR agreed with the EU not to initiate trade negotiations until the Doha round is concluded. This is so, argues their joint communiqué, because “an ambitious and balanced outcome in all areas under negotiation is decisive for creating a safe, stable and equitable environment, which generates trade and investment opportunities for all WTO members, especially developing countries, bearing in mind that contributions must be consistent with the principle of special and differentiated treatment and less than full reciprocity.”

Lisbeth Petersen: “Bilateral trade treaties do not take the uneven balance of power between the participants into account.” Photo: Eva Rasmussen.

Troubling

“It is troubling that the Doha round is not mentioned in the agreement between Central America and EU”, comments Lisbeth Petersen, MS coordinator in Central America. “We consider that trade might create development, however it is far too easy for strong economies like those of US and EU to twist the arm of economic lightweights such as the Central American countries. Bilateral trade treaties such as CAFTA, or the treaties entered into between the EU and Mexico and Chile do not take the uneven balance of power between the participants into account. Here everyone must follow the same rules, except when it comes to subsidies. While the EU and the US stick to their agricultural subsidies, they were forcefully abolished long ago by countries such as Honduras and Nicaragua thanks to the IMF structural adjustment programmes. The EU has underscored that what they are going to negotiate is not only a trade treaty, but a development and trade treaty. If the European countries were serious about the development perspective, they should have left the trade negotiations to the WTO – and have abolished their agricultural subsidies.”

Exclusive participation

There was little openness surrounding the negotiations leading up to and during the Vienna summit. The EU demands that civil society participate through CCSICA, the official consultation organ of the Central American Integration System (SICA), which is a space for prolonged and ongoing talks about the customs union, the Central American Court, and a number of other things related to regional integration. This is a problem because it excludes most of Central American civil society, given that one of the many conditions to be member of CCSICA is to agree with SICA. In any case, not to invest too much time in CCSICA might be the best option available, as its influence is limited to contribute to the decisions of this consultation organ and its subcommittees. None of MS’s partners are members.

Alternative

Parallel to the official summit an alternative was held at which thousands of activists and two presidents, Hugo Chávez of Venezuela and Evo Morales of Bolivia, discussed another way of trading: the Bolivarian Alternative for the Americas (ALBA), which seeks to establish an economy based on solidarity, cooperation and support for development, rather than on competition. The Venezuelan president, who is the most outspoken spokesperson of the model, talked about “health for gas” and stressed that this is an economy based not on exchange value, but on use value. Cuba and Venezuela have lent ALBA official support, and Daniel Ortega, Sandinista candidate in the upcoming presidential elections in Nicaragua, also supports it warmly.

The Vienna summit has raised very little interest among news media and NGOs that normally deal with trade policies. “MS will try to give rise to a debate on the bilateral agreement, so that we are not taken by surprise when negotiations begin”, says Lisbeth Petersen. When that will be has not yet been decided.