The Hemispheric Social Alliance in the context of Latin American Integration Processes and the FTAA

01 December 2000

Latin American integration remains as elusive as ever. Transnational corporation interests in the NAFTA model are the driving force that continue shaping the southbound process of integration via sub- regional agreements such as Mexico and the Central America North Triangle 'free trade' agreement. Also Chile, that has a 'free trade agreement' with Mexico is negotiating another 'free trade' agreement with the United States. All these point in the direction to the advancement of the Free Trade Agreement of the Americas (FTAA) which ultimate purpose is to consolidate a continental bloc in the immediate area of influence of the US in 2005. It was during Bush government that the US launched the Americas Initiative in order to start confront growing competition from European and Asian trading blocs and to uphold in coming decades its economic and political hegemony in the continent it consider as its backyard. This hegemony includes guaranteeing access to natural resources, markets and labour force and to this end not only commercial strategies are to be deployed but also military might as in the Colombia Plan. Hence, 'continental security' is another ingredient of the complex architecture of US intervention in Latin America.

The first big step taken towards the FTAA has been NAFTA which is a world model of neoliberal globalisation processes. The MAI is based on NAFTA´s Chapter 11 on Investment. NAFTA is an agreement with equal rules and treatment between countries with absolutely disparaged levels of development and therefore a monument to inequality. It is, as pointed above, not only a 'trade' agreement but an agreement on investment and services that has opened Mexico up to a continuous process of taking over the public trusts by means of altering the National Constitution. During its negotiations and the following six years of operation NAFTA has served the interests of large corporations and has ignored all development needs; has been implemented without any democratic consultation and participation of societies, and has ignored elaborated proposals of social organisations for a Social Agenda that protects and satisfies social vindication and needs. From the very beginning of negotiations an intense process of trinational (Canada, Mexico, US) social response emerged. The networks formed acted to revert the antidemocratic character of the process putting forward the Social Agenda, questioning the true nature of NAFTA and generating a continuos and inclusive process of alternative development model building. Intense advocacy served to achieve labour and environmental side agreements, despite these being non binding.

Experience gained during advocacy processes around NAFTA have served civil society organisations in Mexico to also advocate for a different trade agreement with the European Union (EU); for an agreement not based on NAFTA and MAI rules, but instead one that has a social agenda not only as preamble language as it now stands. In this sense, the social and economic effects of total asymmetric 'integration' with the northern neighbours have been so negative in Mexico's countryside, small and medium enterprises, environment and most of the population, that a similar agreement with the EU can do nothing but impact negatively as well. Zedillo´s government decided to complete a trade agreement with the EU with the pretext that 'diversification of markets' was needed, of course once increased dependence with the US has proven evident. The Mexico-EU agreement, has a 'democratic clause' that calls for respect of human rights and has some references to social development. However, this clause is nothing more than a preamble to binding trade and investment rules. Many analyses have been produced that demonstrate how the Mexico-EU agreement reproduces the model of globalisation based on big corporations interests to control all areas of economies that can result in profits.

Ex-president Zedillo boasted until his last moment in office that Mexico had more free trade agreements than any other country in the world, which supposedly is a sign of progress, despite 70 million people being left behind in poverty and defenceless. This figure summons up all the damage caused to national development processes in the benefit of the 'external sector' which did not start with NAFTA but with structural adjustment policies implemented since 1982. NAFTA has exacerbated, however, since 1994, the dismantling of the internal production processes and total subordination of economic development policies to the US market. Pretended diversification of markets, as with the EU or other countries, may do at the most remedy certain dependence with the US, but will certainly continue exacerbation of dependence on corporate mobile capitals.

The fall of the PRI regime, certainly welcomed and heartening, does not mean president Fox will change at all the 'economic discipline' imposed to the Mexican population. It is a fact that Fox has complete will to deepen unconditional surrender to transnational corporations take over public properties and national interests. During the 'transition period' (once elected president) Fox assured investors in France that 'foreign investment will have priority' in his government and presented Mexico as a 'paradise for private capitals' in which the 'State would not hinder but remove all obstacles to foreign investors success'. He said his will be a 'government committed with business' and 'one that knows that employment and growth is created by business people and not the government'. Again, in Mexico he promised foreign portfolio investors 'total economic freedom, promote investment, property and capital formation laws and to eliminate existing monopolies in the Mexican economy'. The latter in clear reference to State companies; 'there will not be a government friendlier to investment than this one'. Likewise, the Mexican Foreign Service will be reinforced as an instrument to promote the country's economic interests abroad, in which only a handful of corporations linked to transnational capital, as has been denounced by associations of small and medium enterprises, participate. This comes as no surprise. The now ruling party PAN (National Action Party) is the conservative party of Mexico that pushed for neoliberal reform much before the technocrats of the PRI started implementing the SAPs in the eighties. The PAN is the party of the right that fought for decades PRI nationalist and economic protectionism. Many say the PRI grabbed the PAN ideology since the eighties when it started to dismantle the internal production systems and get rid of the Mexican Revolution ideology.

In terms of regional block formations, fears that Mexico will operate as a big Trojan horse for the FTAA purposes into Latin America are well grounded. Wall Street investment strategists have considered Fox's electoral triumph as great news for the US and have made public in detail that their interest is to see him 'deepening free market policies'; have Mexico 'overcome cultural reluctance against privatisation' and interpreted the election as a 'triumph of globalisation'. Salomon Smith Barney's, analysis director general Thomas Trebat, has stated that if 'Fox succeeds the message to Latin America will be: get on with global integration and closer links with the United States. If Fox fails it will be a big blow to global integration hopes, and closer links with the US, that may make a return to populist solutions instead of market based ones'. Glodman Sachs' Latin America Research Director Jorge Mariscal said Fox election are 'good news for Mexico and Latin America' because he will complete structural reforms (not achieved by Zedillo) as privatisation', to which he said, Wall Street would also like to see 'cultural changes'.

Jorge G. Castañeda, appointed Foreign Ministry by Fox, has explained that continental foreign policy of Mexico will seek to equilibrate the extension of NAFTA with a stronger relation with South American countries as a counterweight to our northwards relation. To this end Fox publicises that Mexico will turn its eyes to Latin America in order to confront as a block globalisation challenges. However, as Mexican analyst Carlos Fazio has warned, 'Fox could become a Trojan horse of the United States to meet the ends of the old hegemonic project of the FTAA. Intents of Fox to establish a Mexico - Santiago axis could point in that direction. The plot is to strengthen the presence of Chile in Mercosur to weaken Brazil's predominance in the South Cone. In Brasilia red spots of alert have turned on' and Brazilian politicians have clearly stated that 'North America ends in Panama'. Indeed , Fox's proposals so far do not go beyond the intensification of relations that do not depart from the neoliberal paradigm of deepening trade and investment relations within the NAFTA model, at the most accompanied with proposals to intensify drugs fighting through co-operation and mere declarations to promote democracy and human rights. Brazilian president Cardoso's vision is opposite to US hegemony as we will see below.

Mexico-Central America

Progress of NAFTA into a FTAA gained terrain during the last days of the PRI regime with the completion of a 'free trade' agreement between Mexico and Guatemala, Honduras and El Salvador (the North Triangle of Central America). Mexico already has 'free trade' with Costa Rica and Chile. The North Triangle (and Costa Rica) - Mexico agreement forms a new sub-regional block that adds up to Mercosur and the Andean Pact. The three may look as pillars to build on Latin American integration. However, The North Triangle - Mexico agreement is more an extension of NAFTA into Central American countries whose asymmetry with Mexico make it clear that inequalities within NAFTA and negative impacts on the wider parts of the population will be reproduced. Within the Investment chapter, rules to promote and protect investors, very much in line with MAI, have applied.

Civil society organisations in Mexico and Central America have already expressed their worries and put forward proposals for an integral agreement that puts social development before mercantile relations and that serves to strengthen political, cultural and social ties. For instance, people's mobility and migratory issues have been left out, only business people will have increased facilities to move around the countries to promote their interests. Hence, yet another struggle to have societies proposals taken by governments starts.

Fox has put forward yet a much more ambitious plan to develop NAFTA in the Central America region and its called the Puebla - Panama - Plan (PPP). The purpose is to develop industrial corridors from Panama to Canada. That is, create the necessary infrastructure to fully integrate Central American countries and the poorer states of southern Mexico with the US, Canada and northern Mexico industrial corridors. The PPP aims to deepen trade promotion mechanisms; impulse regional markets and transfer of technology; a modern customs structure; build up infrastructure like roads, ports and gas lines and create a huge tourist corridor. Fox has said to entrepreneurs that 'if we want to construct solid economies, just and human societies, our region can not lag behind. We must adapt our institutions to the new times and new needs'. According to Fox planning the project will be bottom up, that is, Mexican south eastern states (sic) will do the planning and the federal government will provide the funding, which by the way is to be sought with the World Bank, the Interamerican Development Bank (IDB), the Central American Development Bank and the European Union. The Mexican State has already provided 2 million dollars of public funds to help launch the project in southern Mexican states. Fox has boasted that this experience will radically change the way development plans are made, since it will start in the municipality, and then the states. Fox has also announced that a meeting of south eastern Mexican states governors will be held in Costa Rica to get to agreements on the regional development plan 'and is expected that Central American countries participate in the plan too' because 'in the way Central America economies grow more investment and trade opportunities there will be for Mexicans and the regions development'. Also, Fox has bluntly said that 'development must be accelerated with a great effort from the North, where we have the greatest market of the world, most economically powerful in the Earth and that form that reality a development plan for our Mexican economy must be generated...If it has started with the North of the country, now is a must to extend it southwards in equal conditions'.

Perhaps needless to say, the PPP is a conception that not only lacks any consultation with Congresses and civil society, but lacks the necessary information channels and transparency to be evaluated by any actor different than the central government. There is no reference on how this 'development project' is to benefit the region's populations and how it will respect and promote their economic, social and cultural rights. Hence, economic policies of Fox are an intensification of 'development' lines dictated by the World Bank synthesised in the Country Assistance Strategy papers that remain closed to the Mexican public, and thus it strengthens an inverted welfare state that serves US and some Mexican corporation interests in the region.


Mexico's 'privileged' position in the 'free trade world' architecture has propelled even Mercosur (integrated by Argentina, Brazil, Paraguay and Uruguay) to hurriedly seek a 'free trade' pact with it. Of course Mercosur is also trying to reach 'free trade' with far away countries like South Africa and the EU not withstanding grave internal consolidation difficulties. Mercosur started in 1985 when Argentina and Brazil decided to accelerate the pace of sub regional integration and since then it has not stopped. Later on Paraguay and Uruguay joined, and Bolivia and Chile became associated members. Mercosur, is one of the most accomplished economic integration pacts in the World, together with NAFTA and the EU. It comprises 230 million inhabitants (concentrating 45% of Latin American population) and reflects how Argentina and Brazil have overcome historical rivalry and disagreement. However, in January 1999 when the Brazilian currency devaluated Mercosur entered into a deep crisis that persists until today.

Moreover, strong social resistance and upheaval in Argentina due to renewed structural reforms such as salary cuts and a general downgrading of the population's well being and labour rights have made consolidation more difficult. Millions of Argentinean workers rightly perceive that new intents to launch Mercosur consist of exclusionary processes, and social upheaval has prompted rapid militarisation in the country, as well as in Paraguay. Also, economic difficulties obliged Argentina to create new barriers to Brazilian products. Hence, Brazilian entrepreneurs are looking for free trade with other markets; Mercosur gets to be unworthy. Another big blow: intents to incorporate Chile as a full member in Mercosur have vanished because the Chilean government has rejected to modify tariffs, but most important because it is close to sign a 'free trade' agreement with the United States and this would be an enormous progress for the FTAA which Brazil is trying to shape according to the interests of Mercosur members. Hence, Brazil decided to stop negotiations with Chile. Other difficulties include Uruguay's and former Argentinean president Menem's intent to go in line with the FTAA plans of the US, and of course, generalised opposition of wide spectres of each country's societies that reject the continuation of neoliberal structural adjustment policies. These include worker unions, peasants, the unemployed and associations of small scale producers with no future in sight, that have orchestrated huge demonstrations and strikes that have obliged governments, specially Argentina, how difficult it is the 'obey FMI/WB recipes or attend social demands' riddle.

An integral agreement between Mercosur and Mexico could indeed have a positive impact in all realms of Latin American reality including the purpose of counterbalancing US hegemony in the continent. However, Mexico's interests and commitments not only with the US and Canada but also with the European Union and each of its countries (e.g. via Bilateral Investment Protection Treaties) are already a priority. In contrast, Brazil shows the intention to give cohesion to South America in order to confront US economic and military pressures in the sub-continent. In August president Cardoso invited 11 presidents of South America to a summit in Brasilia and made clear the two Americas approach (one from Alaska to Panama and the other from the Colombia to Tierra del Fuego). Not surprisingly the US has repeatedly accused Brazil of decelerating the rhythm of FTAA negotiations. The Brasilia Summit served to sketch the project of the Southern Common Market that would integrate Mercosur, the Andean Community of Nations and Chile, Guyana and Surinam.

Plan Colombia

However Cardoso's immediate plan is to continue strengthening Mercosur. This plan has a national security logic that president Chavez of Venezuela shares. Carlos Fazio describes how both presidents have followed with great attention civil war in Colombia and direct involvement of the US Pentagon. They perceive in the US conceived and promoted Colombia Plan a plot to redesign the geostrategic military domination system by means of extending the conflict to and involving neighbouring countries, under the pretext that, as Thomas Pickering stated, is a 'regional conflict'. They perceive how the Pentagon fosters war escalation in Colombia and how Clinton's war on coca is a war on people. US finance to this war includes fumigation operations with herbicides that cause illnesses and kill vegetation. In response to it, drug traffickers can simply move to exploit other communities. Needless to say, while demand of drugs grows in the US many poor peasants and traffickers will be ready to produce. However, Cardoso wants to avoid this war being exported into his country and is so worried by Colombia Plan that has already deployed considerable military forces to protect Brazilian borders from any incursion. In this sense Madeleine Albright has already asked Brazil to lend its military bases for the plan and she received from Foreign Minister Lamperia a rotund 'No Interference in Internal Affairs of Other Countries'.

The Colombia Plan consisting in the creation of a region's multilateral force to intervene in the escalating war is justified with the old notion to 'save democracies in the hemisphere', for which a campaign of misinformation has been deployed in the US. The real objectives as analysts point are to create a force that crushes all dissidence and guerrillas in which the US military forces do not have to directly intervene, and ultimately create a continuous dependence on US military technology that would serve the purpose of advancing economic hegemony and interests. More immediately, as Fazio points, Brazilian negative to help with the plan is a prevention of US interest to intervene and control the Amazon Basin under the old Panama Canal formula consisting on the pretext that the Brazilian army can not control the vast region, and therefore can not control supply of food and military weapons to Colombian guerrillas from the Amazons.

The Hemispheric Social Alliance (1)

All the complexity of NAFTA is now being widened and multiplied in the hemisphere. Since Belo Horizonte Summit in 1997 it became clear that Mercosur would become a resistance to US hegemony. However, that summit gave ground to another summit that was held next year in Santiago de Chile, in which FTAA negotiations were formally launched. Since Belo Horizonte a social process seeking to hinder US plans also started. Important movements and organisations of all the continent converged in Belo Horizonte. These include Brazilian umbrella organisations, peasant movements (MST included of course) and trade unions and associations that have experienced important democratisation processes, including the AFL-CIO of the US. While trade union associations like ORIT (Interamerican Regional Labour Organisation, affiliated to CIOSL) put forward the most far reaching proposals in terms of creating a Labour Forum in FTAA negotiations, objectives were also set in terms of deepening democracy in the process, having a social dimension and setting an alternative development model. It was agreed that these objectives could be met only through the widest and most representative assembly of social forces in the continent, operating under common commitments, agenda and actions. Then organisations present agreed to proceed in the creation of a Hemispheric Social Alliance (HSA) as the only way to build an effective social counterweight to the advance of 'free trade' and neoliberal economic integration.

In Belo Horizonte, the celebration of the Americas Peoples' Summit was convoked, and held parallel to the Santiago de Chile Summit of Presidents in 1998. The Peoples' Summit was a success. More than a thousand people from almost every country of the continent participated. Participants came from diverse social sectors and distributed then in ten sectoral and thematic forums, having in mind interdisciplinary approaches. HAS has incorporated many new organisations as active members, such as the Latin American Co-ordination of Peasant Organisations (CLOC). The HSA already has an Hemispheric Council constituted by around thirty organisations, and an Operative Co-ordination formed by eight organisations (ORIT, CLOC, Quebecois Network, Common Frontiers of Canada, the US Alliance for Responsible Trade, Central America's ICIC, REBRIP of Brazil and Mexico's RMALC. Parallel to this structure, the HAS is conceived as a horizontal structure and a permanent process, open all the time to adherence and full participation of new members.

The Third Summit of the Americas will gather all Presidents of the continent, with the exclusion of Cuba, and seeks to give a final and definitive launch to FTAA negotiations. This summit will be held in Quebec in April, 2001. The HAS considers its most important challenge to be able to translate consensus reached among member organisations to concrete actions and initiatives that influence, revert, and even stop the FTAA process. Therefore, another parallel Peoples' Summit will be held in Quebec. This summit will centre on mobilisation not only in Quebec but other sites in the hemisphere under the spirit of Seattle and Washington street protests. Important links with other mobilising initiatives are being built, such as the Cry of the Excluded, Jubilee 2000, etc.


1. Hemispheric Social Alliance (HSA) is known in Spanish as Allianza Social Continental (ASC) and the Declarations from Belo Horizonte and Santiago de Chile and Letters send to Ministers demanding information and FTAA texts as well as other publications can be found on the website.