Thursday, June 15, 2006

US-Andean trade deal 'to hurt developing countries'

Maryian Alowo | Kampala, Uganda
15 June 2006 04:46
Mail and Guardian

The move by the United States to sign free-trade agreements (FTAs) with the Andean countries of Peru, Colombia and Ecuador will harm thousands of small farmers, Oxfam has warned.

The agreements will block access to affordable medicines and favour foreign investors, says Oxfam in a report titled Songs of the Sirens it released on Wednesday. The report outlines the negative effects of the proposed agreement.

"The US is demanding concessions that could affect the sustainability of development policies and weaken the ongoing process of integration with neighbouring countries,” Oxfam says.

The report says although negotiations with Ecuador have been temporarily suspended, the agreement with Colombia is awaiting final executive approvals and the Peru agreement, already signed by both countries, will be considered by the Peruvian Congress in the coming days and in the US Congress in the coming months.

“Developing countries have been enchanted by the appeal of free-trade agreements, but, much like the song of the sirens, this attraction is ultimately self-destructive,” says Stephanie Weinberg, trade policy adviser for Oxfam. “The benefits that an FTA offers Peru, Colombia and Ecuador will be far outweighed by the negative impact of agricultural dumping, harsh patent rules and deregulated foreign investments.”

According to the report, Oxfam believes that the Peru and Colombia agreements on agriculture, intellectual property and investment rules would harm the development of these countries.

“In agriculture, the agreements would dismantle safeguard mechanisms that are vital for food security and the livelihoods of small farmers, while making no attempt to address the unfair dumping of American overproduction,” Weinberg says. “The livelihoods of a quarter of the population of these countries, especially the poorest in rural areas, depend on agriculture for their livelihoods.”

He adds: “The FTAs pry open the markets of Peru and Colombia without any consideration for the damaging effects of dumped, cheap, subsidised American products.”

On intellectual property, the report says the US has succeeded in extending pharmaceutical patents beyond 20 years, which goes well beyond agreements made at the World Trade Organisation (WTO).

“As a consequence, medicine prices in Peru will increase by almost 10% in the first year of the FTA and 100% after 10 years. Colombia will have to spend an extra $940-million a year to buy more expensive medicines and nearly six million people will lose access to medicines,” says Weinberg. “Trade could be the engine to pull millions out of poverty, but the winners of this agreement are American and international companies.”

He adds: “In the Andean countries where half the population lives in poverty, this agreement will actually reduce access to affordable medicines and stifle opportunities for development.”

The US has started concentrating on bilateral agreements because the WTO’s Doha development round is deadlocked and talks on the Free Trade Area of the Americas have stalled.

Oxfam says the US is using these new bilateral deals to force poorer countries to give up a lot more than they would at the WTO.

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Blogger jsb said...

How do you feel about Vietnam seeking a bi-lateral free trade agreement with the U.S.?

9:23 AM  
Blogger leftside said...

I don't know the details on that deat, but my first impression is that a socialist country is better able to withstand some of the negatives cited here by Oxfam.

In agriculture under the Vietmanese system, they will have a better chance than say Central America to compete with US farm technology. Vietmanese (socialist) subsidies are deeper and more comprehensive that just subsidizing crops, which is illegal under the trade agreement.

Vietmanese workers in factories have better conditions than many other countries in the region.

There may very well be some drawbacks for Vietnam, particularly in financial services and the like. But Vietnam is clearly taking the Chinese path, whereby they feel full "normalization" with the world trading community is in their interests. But the Chinese model also stresses a planned market entry, on their own terms. That is, with thought and foresight, using the power of trade to benefit their strategic interests. Practically, that means that the Government gets a seat at the table and often in the Boardroom, with shared ownership and the like.

12:13 PM  

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