Why the Stakes Are So High for Trade Talks

Why the Stakes Are So High for Trade Talks—Web Exclusive

The big post-Cancun news is that a coalition of developing countries, led by Brazil, has dramatically weakened the formerly sweeping text of the proposed Free Trade Area of the Americas; the recent FTAA negotiating meeting in Miami called for an "a la carte" treaty proposal that will allow countries to opt out of some areas. Meanwhile, the full-strength Central American Free Trade Agreement will likely come to a vote in Congress this spring. Why are activists so worried about "free" trade agreements?

The WTO, and other so-called "free trade" treaties such as NAFTA and the proposed Free Trade Area of the Americas, are actually highly political, negotiated documents in which stronger countries often set the labyrinthine rules to their advantage. For example, when the WTO was formed, wealthy countries simply pushed through a classification system in which their massive farm subsidies are defined as "not trade distorting"—in utter defiance of both reason and suffering Third World farmers.

Of course, there would be nothing wrong with some guidelines for trade in order to help (rather than hurt) the poor, or in order to cut the risk of harmful financial crises, or in order to let democratic governments make choices for their own people. Still, many developing countries were willing to give up their right to set such guidelines, because the WTO promised a fair, rule-based system in which, it said, poor countries could grow and gain jobs.

In reality, wealthy countries often run roughshod over poor ones at the negotiating table. Here’s how: