Harness FTAA energy to combat economic colonialism, promote economic growth — ACS head

Norman Girvan, General Secretary, Association of Caribbean States (ACS) is watching the FTAA trade table like a hawk. FTAA, he said, will either lead to another form of economic colonialism or improve the quality of life for developing countries. Girvan was at the time speaking at the Banking, Insurance and General Workers Union (BIGWU) 2003 Workers Education Programme entitled: “The Free Trade Area of the Americas (FTAA) - Implications for Labour, Business and the National Economy.” Girvan stressed the fact that trade liberalisation must be a form of growth that produces quality employment. “Employment that is secure and reasonably remunerated for the work done. Increased sources of opportunities for all and conditions which allow sustainable human development of the population.”

In Making Global Trade Work for People, a publication of  United Nations Development Programme (UNDP), Girvan said the assumption is that the purpose of trade is to support sustainable human development. He said the book went on to say that global trade and trade liberalisation is not an end in itself and they also make far reaching propositions and proposals for re-orienting the nature of the course and content of global trade negotiations in support of sustainable human development. Girvan said if one is to examine the declaration which accompanies the course of the FTAA, they would see that the FTAA supports such an initiative. He quoted from the declaration of the Summit of the Americas of 1994 which launched the FTAA process.

The declaration states: “The countries are aware that widely shared prosperity contributes to hemispheric stability, lasting peace and democracy... A key to prosperity is trade without barriers, without subsidies, without unfair practices and with an increasing stream of productive investments.” This, he said, is what will determine whether and to what extent  the “FTAA will actually, in practice improve the quality of life of the populations or whether the fears of some that it will amount to nothing more than a new form of economic colonialism will be realised.” The ACS general secretary said this is the question that has to be answered, but noted that it depended on the manner in which negotiations proceed and how countries organise themselves to defend their interests and insure that the outcome is reflective of their interests. Girvan said this is a very “inter-connected and intertwined” agenda and will profoundly affect all levels of the local economy and will also have social consequences and impacts. He added that more subjects which are normally within the purview of domestic policy and action are being incorporated into not only the FTAA but other trade negotiations and arrangements as well.

“Subjects such as intellectual property rights, competition policy, investment, government procurement, dispute resolution and labour standards are being negotiated and once an agreement comes into place it will be taken out of the arena and scope of autonomous, soverign, government action.” He said while the new rules are supposed to strengthen the framework for international trade and investment, it will also result in a new reality, a new way of doing business and changes which will affect the very substance of everyday life. “On the one hand the opening up of markets will enhance opportunities or provide enhanced opportunities for the business community and present an interesting potential for growth and the development of our countries but on the other hand they impose risks and challenges of equal magnitude.” For regional entrepreneurs, he said, the possibility of exploring economic complementarities with different economies, deeper markets and diverse preferences offers newer and greater opportunities for business, investment and growth.

However, he warned this also means a more complex legal framework and increased competition. He said in this framework, economies of scale and access to technology play a fundamental role. “These are significant challenges particularly for the small developing countries of the Caribbean region which do not have the benefit of economies of scale from the domestic market and do not have large technological complexes.” In the face of these challenges, Girvan said regional entrepreneurs can obtain  support from the enhanced regional markets and it is possible to forge strategic alliances and various joint production schemes which could be combined with the possibilities of creating productive conglomerates and regional clusters. He added that these ventures can take advantage of trans-border ties to increase the regional value of production and improve competitiveness by incorporating the best of the productive capacity of the various countries and sub-regions of the greater Caribbean. “We already see this in the significant flow of investment by TT firms into countries like Jamaica and others in the Caricom region.” However, he said for the governments, social actors and partners of regional countries, this is a task of “colossal proportions”, because of the numerous processes they must simultaneously embrace. Additionally, he noted that these governments’ desire to obtain the best possible reserves for their people are pushing the human and financial resources of the Caribbean region to their limits.