Bolivia's Peoples' Trade Agreement
By Nick Buxton, June 2006
"We depend on a global market, but we want a market that is just and based on solidarity, not just profits for a few," said Maria Victoria Fernandez, President of Bolivias Women Workers Association. "We need rules that respect our sovereignty and give us fair prices, so we can live a dignified life." She recounted how IMF-backed trade liberalisation policies, which allowed unfettered imports of used clothes from the US, had almost destroyed a thriving home-based Bolivian textile industry. Behind her, clowns on stilts tottered past with their faces painted: 'No to Free Trade. Yes to Life.'
It was April 2005 and clowns, actors, civil society organisations, small producers and rural farmers as well as religious groups had gathered in the main high street of the mountainous capital of La Paz to call for a trade system based on justice and solidarity. The colourful and vibrant mix of stalls, street theatre and music organised by the Bolivian Movement against Free Trade culminated a week of events across the Andean nation and indeed in more than 60 countries worldwide in support of trade justice. All along the street, different groups representing farmers, cooperatives and health workers expressed grave concern at the Bolivian Governments attempt to rush headlong into an Andean Free Trade Agreement with the USA. Hector Calle, a rural parish community worker said: "The majority of poor people I work with are petrified of free trade. They feel that their small businesses will inevitably go under if our market is opened up to rich and powerful companies."
The civil society groups called instead for different trade rules: ones that protected small businesses, safeguarded the environment, and were based not on competition but collaboration.
Hopes Into Reality
Whilst people on the street expressed hope of change, few imagined that the Bolivian Government would one year later take the lead in pushing for just trade rules. Bolivia at that point was an observer to the talks for an Andean Free Trade Agreement (AFTA) which began in 2004. The Bolivian Government under the Presidency of Carlos Mesa was under great pressure to join the negotiations from the Chamber of Exports and in particular one businessman, Marcus Iberkleid who exported apparel to the US multinational Polo Ralph Lauren.
The threat was and still is that Bolivia had to enter the negotiations in order to maintain trade preferences granted by the US in a former trade and drug eradication pact due to expire in December 2006. Almost all of Bolivias media backed the business interests, repeating the mantra that Bolivia had no alternative but to sign a Free Trade Agreement with the US.
A year later, and the picture is very different in Bolivia. The demands from the street have become the official position of the newly-elected Government of Evo Morales. Within days of his arrival to his post in January 2006, Morales was under pressure to join negotiations for AFTA. But just as immediately Bolivia was to see firsthand its costs when Colombia became one of the Andean countries to sign in February 2006. Even though it hadnt been part of the negotiations, Bolivia suddenly found that Colombias agreement with the US threatened to cut off Bolivias biggest export to Colombia, soya which could not hope to compete price-wise with highly subsidized soya from the US. Principles of regional co-operation between Andean nations had been callously sacrificed by the Colombian Government in their rush to sign a deal with the 'biggest market in the world'.
Angered by the way Bolivia could be treated by a neighbouring country, Morales in a press conference said "We dont need a Free Trade Agreement (FTA). We need a Peoples Trade Agreement (PTA)." A policy was born.
Not diffferent rules but a different game
The Bolivian Governments alternatives were presented a month later. From the very outset the PTA proposals mark a dramatic u-turn from current consensus. The first paragraph states that the PTA "understands trade and investment not as ends in themselves but as a means towards development. Consequently its aim is not total liberalization of markets and the shrinking of States but rather creating benefits for all peoples".
Whilst the PTA was presented as an alternative to AFTA, it is really an alternative to the whole system of trade and investment rules today, which in reality are about much more than trade. The current bilateral and multilateral trade regimes such as the World Trade Organization agreements enforce liberalisation of all areas of a countrys economic and social life including a countrys rights over its services, its rules on intellectual property, State purchases, competition etc. Whilst different trade agreements may accept different timetables for developing countries, they still apply the same liberalisation recipe regardless of local needs.
More than anything, the current trade regime is about guaranteeing rights to multinational companies, who are able under investment chapters of trade agreements to sue developing countries for any regulatory actions that may affect their profits and investments
PTA openly questions the hypocrisy of the current one-recipe trade regime given the fact that all so-called 'developed countries' became prosperous by building up nascent industries behind trade barriers. However it goes further by developing its own core principles based on demands made by Bolivian social movements over many years [published on the web at www.boliviasoberana.org/blog/English]. These principles embrace four fundamental concepts that contrast directly with current trade policy:
- The State has the right to subordinate trade agreements to their own long-term vision of national development and to use 'protectionist' measures to achieve this
- The human right to water and basic services comes above the rights of multinational companies
- Trade agreements should seek solidarity and complementarity rather than competition and overexploitation
- Trade agreements should protect and support small community-based enterprises.
Moreover, drawing on indigenous wisdom in a country where almost two-thirds are indigenous peoples, the PTA unabashedly challenges one of the fundamental credos of our age when it questions the un-sustainability of 'economic growth' and the Western culture of waste which "measures the development of a country based on the capacity of its population to consume".
The PTA says that currently trade is based on a logic of competition and the urge for accumulation which leads to overexploitation of natural and human resources, and instead calls for another logic based on a "a distinct model of co-existence". This principle comes directly from a deeply-rooted idea of Pachamama in the Andean cosmo-vision, which says that we are dependent on and part of creation and need to live in harmony with nature and not work against it.
Turning Principles into Reality
Moreover, the principles are not just being saved for fine words. Within a few weeks of promoting these ideas, Bolivia signed a Peoples Trade Agreement in May with Cuba and Venezuela as a means toward development with social justice in the framework of genuine fraternal Latin American and Caribbean integration. Morales ideas dovetailed with Venezuelan President Chavez proposed alternative to the Free Trade Area of the Americas which he calls ALBA: a Bolivarian Alternative for the Peoples of America.
The treaty explicitly takes into consideration Bolivias colonial history and the challenges Morales faces in developing basic social services. It establishes a new foundation for trade based on the conviction that strong solidarity, mutual cooperation and aid between their peoples must prevail, free from any interest in business or market profits.
The result is that rather than talking about opening up nascent domestic markets to the flooding of subsidized imports or competition with powerful multinationals, the treaty instead proposes that each country elaborate[s] a strategic plan in order to guarantee complementary products that can be mutually beneficial based on the rational exploitation of the countries existing assets, the preservation of resources, the expansion of employment, market access and other aspects inspired in the true solidarity fostered by our peoples.
It encourages the formation and investment in joint companies and associations with priority given to initiatives which strengthen the capacity for social inclusion, resource industrialization and food security, in a framework of respect and preservation of the environment.
Practically, Cuba offered to use its capacity in education and health to immediately set-up 6 ophthalmologic centres in Bolivia which have the ability to operate on 100,000 people a year and to extend a literacy programme to the whole population. Venezuela offered both technical assistance and substantial investments in Bolivias hydrocarbons sector and most significantly to buy Bolivian agricultural exports including all the soya that could be cut off from Colombias trade agreement with the US. Bolivia committed to ensuring energy security for the three countries with its hydrocarbon resources and also offered amongst other things to exchange experiences in the study and recovery of ancestral knowledge in the field of natural medicine.
Pablo Solón, adviser to the Bolivian Government, in a recent interview says the agreement is exceptional because it accepts unequal rules for historically unequal countries ie that a poor country should have different trade rules than a richer, more economically powerful country. In this case, Venezuela opens its state purchasing to Bolivian suppliers while Bolivia does not; Venezuela lowers tariffs to zero, but we do not. If we are truly to talk about trade agreements to eliminate poverty, asymmetrical treatment is key.
Solón also noted that rather than just opening markets, the treaty also assures purchases of goods, which helps to guarantee a stable environment for managed growth rather than expose developing countries to the vagaries of a global economy. In the PTA, not only are there tariff preferences, but a commitment to purchase. In this case, Venezuela commits not only to lower tariffs for all the goods upon which they are levied, but also to buy 200 tons of soy and other products that would be harmed by the FTAs with the United States and European Union.
Bolivia Open for Business
Since signing the PTA, Bolivia has made clear it is looking to initiate similar trade agreements with other Governments. President Chavez at a meeting in London specifically suggested that Britains capital city could sign a PTA with Bolivia.
Unfortunately the European Union appears to be firmly headed in the direction of imposing the old free trade model. Most recently in Vienna, the European Union tried to push forward on a proposed EU-Community of Andean Nations association agreement that differs little from the AFTA which the US has attempted to impose on Bolivia. Venezuela and Bolivia managed to delay the start of talks by raising some concerns. However Austrian Chancellor Wolfgang Schuessels comments: ''There are always two possibilities in life: Either you want to open your markets or you don't want to open your markets -- it's your choice,'' suggest many European governments are still unable to see outside the free trade box.
Meanwhile the backlash against Bolivias alternative trade policy has started, in all likelihood backed by multinationals who see their interests directly challenged. Within Bolivia, the right-wing opposition to the Morales Government has launched a fierce campaign saying Bolivia is subordinating itself to Venezuelan interests. Soon after the announcement of the PTA, President Bush expressed concern at the erosion of democracy in Bolivia whilst Condoleeza Rice referred to Morales demagoguery. If Bolivia finds itself without trade preferences to the US in the coming years as a result of refusing to sign the Andean Free Trade Agreement, the backlash will grow.
The reality is that if a Peoples Trade Agreement is to succeed, it will ultimately depend on the peoples themselves. Up to now, global justice activists have largely been fighting a reactive battle, trying to stop corporate-managed trade agreements from extending their reach to all sectors of the economy and public services. Some activist groups have called for a new trade regime but many have ended up with a defensive posture calling for developing countries to have 'special treatment' that simply allows certain areas, such as public health, to be protected.
Yet here is an agreement that isnt defensive, but offensive in a truly positive sense. It starts from Andean principles of solidarity, complementarity, reciprocity and co-existence with nature, which contrast radically with current trade regimes that extend rights to capital and multinationals regardless of the cost.
This does not mean it is a perfect trade treaty nor will it be the panacea to global inequality, but it opens up a new space for a much-needed debate about people-based alternatives to trade. Trade and justice activists now have a crucial opportunity to help the Bolivian Government succeed in its first steps. This may take the form of a letter of solidarity recognizing that current trade rules have harmed working families and the environment in all countries and needs to be changed. It could involve choosing to buy Bolivian goods where there are choices. It should also involve responding to appeals such as the one made by Chavez to build a PTA with communities like London.
Speaking over a year ago, Maria Victoria Fernandez, President of Women Workers Association said she believed the struggle for trade justice could be won: "I believe we can win in our struggle for justice, because the yearning to be fully human, to live life in a dignified way is universal." Today that hope is in Bolivia. It is our responsibility to seize this opportunity and help to make that hope for a dignified life to become a universal reality.
Nick Buxton is a trade activist working in La Paz, Bolivia. He will be speaking at RAN's conference in London in July, 'Latin America: Social Movements Fight Back', alongside Oscar Olivera from La Coordinadora in Cochabamba and others.