Sustainability

Background

In the official documents related to the FTAA negotiations the expression "sustainable development" is limited to formal declarations by ministers and heads of states following their meetings or summits.

Just as "free trade" dangerously appropriates the concept of "freedom", the concepts of development and sustainability take on very different meanings depending on who is using them.

The promoters of free trade defend their positions based on the general theory that liberalization will result in international specialization of production based on free competition among producers, leading to benefits for all, with reductions in production costs and, consequently, prices to consumers. This would lead, therefore, to a general increase in production and consumption, i.e., economic growth. This consumption, as it generates more wealth, would also lead to new cycles of growth and expansion of trade. The virtuous circle of trade would therefore close with economic growth, reductions in poverty and environmental protection.

The promoters of free trade, in spite of their frequent appropriation of the term "sustainable development", hold out the promise of unlimited growth of production and consumption, as if it were possible that all inhabitants of the planet could have access to the already unsustainable patterns of consumption that occur in developed countries.

Meanwhile, the consequences of growing trade liberalization and international financial flows produce very different effects from those predicted by the neoliberal doctrine. International specialization of production has made the terms of trade less and less favorable for developing countries. Free circulation of capital, whether speculative or not, worsens many countries' balance of payments. The indiscriminate withdrawal of mechanisms to protect industrial production worsens this scenario even further, generating unemployment and needs for additional imports. The case of Mexico under NAFTA demonstrates the unsustainability of this model, as official data acknowledge that the cost of environmental deterioration and degradation is equivalent to 10% of GDP every year under NAFTA. Beyond that, the promised economic growth has not materialized, as average GDP per capita grew just 0.94% a year.

Pressured both by foreign debt and by the international financial institutions' policy conditions, these countries have had to adopt measures that, while dealing with the short-term external account problems, compromise their populations' quality of life over the long term:

1. The increasing inflow of speculative capital is a source of financial instability and imposes heavy future commitments;

2. The unrestricted entry of direct foreign investment, in addition to increasing future profit remittances, undermines countries' sovereign ability to determine the productive structure that best suits them -- initiatives capable of generating jobs and profits, of dealing with the population's basic needs, and generating the least environmental impacts. On the contrary, monoculture exports take the place of family farms; export industries (iron, aluminum, cellulose) receive incentives, thus taking the place of production of textiles, clothing, etc.

3. Increasing exports of raw materials and commodities, both agricultural and industrial, are intensive in natural resources and energy consumption, leading to increases in environmental degradation.

The historical tendency toward falling prices for primary export commodities, linked to the increasing need to import industrial goods, as well as growing capital remittances for interest payments, profit remittances, royalties, etc., only increase the gap between rich and poor countries.

Therefore a growing segment of the population in Latin America finds it impossible -- due to insufficient income - to obtain the basic natural resources needed for decent living standards. At the same time, the richer countries, who benefit from profits on investments and the fall in the prices of primary goods, adopt patterns of consumption that are increasingly unsustainable.

As it is based on this logic of unlimited growth in production and consumption by the most favored sectors of the population, the FTAA plan goes against the path of sustainability with social justice that we want. The addition of new countries to an agreement that restricts the freedom to adopt autonomous economic, social, and environmental policies implies the loss of sovereignty to implement sustainable development plans at the national and regional levels.

Our analysis leads us to conclude that, at least in name of the precautionary principle, we should take a firm position against the FTAA in the form it is now being presented. As we see it, that agreement will lead us away from a plan for sustainable and democratic development that deals with the totality of our societies' real needs, something that is not surprising, since none of the member countries have any plan that would point in this direction.

The achievement of sustainable regional integration that promotes the welfare of the majority of the population would require regulatory mechanisms. Regulations that put the integration processes, and within them trade agreements, at the service of social interests and sustainabililty should be constructed with broad participation by civil society. Organized social actors, not markets, should be the protagonists in the definition of the course of integration and the development of countries. Moreover, integration based on equity both among countries and within them would require democratic institutions capable of ensuring transparency and civil-society participation.

This institutional structure should contribute to the development of mechanisms for cooperation among countries that should replace the practice of sanctions that characterizes trade negotiations. Social control, regulation, democratic institutions, and cooperation, therefore, should be the pillars for the constitution of a process of democratic and sustainable integration.

Guiding principles

1. The Americas do not need free trade; we need fair trade, regulation of investment and conscious consumption patterns that support our national development plans. Our interests lie in economic, social and cultural integration that truly benefits the peoples of the Americas, not in plans based on trade frameworks that up to now have been directed by corporations and applied by governments. Our proposal would not leave integration to market forces; integration would be regulated and would prioritize participatory democracy, sustainable development, social justice and cultural diversity.

2. Trade and international finance should be tools by which production and consumption are linked. Approaching the issue of sustainability in its broadest sense, therefore, presupposes questioning the model of development.

3. The concept of sustainability, in turn, is not static, as it is built within the context of social relations and their interaction with nature. It is not simply a matter of sustainability of resources and the environment, but above all of social forms of utilization of resources and the environment. The appropriation of nature, as it occurs today, is the cause of the current situation in which social inequalities and environmental degradation are simultaneously deepened.

4. The definition of development should not be based on traditional indicators, such as growth in GDP, that are clearly incapable of and not designed to deal with the issue of distribution.

5. Civil society, in its broadest sense, must participate in the definition its own sustainable and democratic plan, as this is a political definition from which the forms of appropriation of political power, income, wealth, and natural, social and cultural resources are structured.

6. A model constructed along these lines should take into account that productive, commercial and financial systems must be subordinated to the preservation of the material base that sustains society, including natural resource and energy. It should not be led by those who proclaim that the free market economy will itself resolve the problems that it is creating. This alternative model would not reject the development and use of "cleaner" production techniques, but neither would it consider these sufficient to resolve the grave environmental problems we face today.

7. The issue of sustainability goes far beyond conditions in developed countries. It focuses on the reduction of natural resource and energy consumption by high-income groups. In order to confront social, economic and environmental challenges - as well as the preservation of our culture - it is necessary to first define what should be produced, for whom and with what objectives.

8. Trade and investment liberalization and export promotion and the attraction of investment at any cost will be the engines of this sustainable economic model. Trade and international relations are held up as tools to resolve our populations' true problems. Instead of being "free", trade and investment should be highly regulated as a function of those objectives.

9. At the international level, it is impossible to achieve global goals of sustainability without the logic of competitiveness being substituted for one of cooperation.

Specific Objectives

1. A regional model of sustainable and democratic development must incorporate those principles and objective in all of the issues involved in an agreement on integration: trade; investment; services; and others. Such issues should be negotiated with the specific objective of resolving -- with the support of national policies -- our region's grave social problems: inequality; unemployment; environmental degradation; and many others.

2. Any agreement on integration must commit the member countries to comply with international treaties and conventions designed to protect the environment, minorities, workers' rights and other social conquests. It should also provide practical means for the implementation of measures that would make those agreements effective at a national level. Therefore, no provision included in those agreements could contradict the global treaties and conventions.

3. The provisions in these agreements, especially those related to trade, investment, and financial and technological cooperation, should include mechanisms designed to favor domestic production of those goods and services necessary to provide for the population's basic needs. Instead of stimulating production of luxury consumer goods produced by transnational corporations or monocrop agriculture, they should protect production that is primarily oriented to the domestic market, whether industrial, craft, or family-farm production.

4. In this regard, the preservation of each culture's particular consumption patterns should be the object of special attention and protection. More than any other measure in the current economic model, the recovery of traditional cultural values could constitute the best remedy against contemporary societies' unchecked consumerism.

5. In order to achieve sustainability, there must be provisions that lead to the progressive reduction of exports of goods that are intensive in natural resources and energy, as the production of those goods degrades the environment in Latin America, especially for its poorest populations.

6. To invest in our entire populations' quality of life means to invest, at the same time, in the creation of solid and stable domestic markets. This kind of process will clearly not be led by market forces. On the contrary, the trade and investment liberalization envisioned in the FTAA would entail even greater difficulties in this area. The activities most capable of generating domestic dynamism, of inducing and protecting domestic development, must be identified, while also providing for exports of excess production from each country.

7. The capacity to generate high quality and abundant jobs and incomes is a fundamental factor. Sectors and production methods that are not only profitable, but also capable of generating stable jobs and protecting the environment must be stimulated and protected in each of the countries involved.

8. With the objective of dampening superfluous consumption of goods that are intensive in natural resources, mechanisms should be established to impede the deterioration of prices of raw materials in international markets. Fiscal incentives for the re-use and recycling of those materials could be a useful tool. In addition, trade in those goods should be subject to additional taxes.

9. Integration agreements should provide for the implementation of measures designed to prevent predatory competition by member countries to gain markets. Those actions invariably lead to deterioration in prices and stimulation of superfluous consumption by the richest sectors.

10. Technical and scientific cooperation programs should be established that permit less developed countries to gain access to production technologies that are less harmful to the environment.

11. Regional programs should be developed to stimulate changes in those countries and sectors with unsustainable consumption patterns, reducing the consumption of superfluous goods through measures such as those described in article 7 above. This reduction should not only favor the global reduction of environmental damage resulting from that consumption but also ensure that underprivileged sectors have access to the resources they need for decent living standards.

12. An agreement on integration in the Americas constitutes an excellent opportunity for the establishment of joint management of common environmental resources. Such an agreement could provide mechanisms that, with the participation of local civil societies, would establish the rational preservation and utilization of watersheds, assist recovery in air quality and reversion of climate change, and permit integrated transportation systems that are more compatible with environmental protection.