COC

gwp/equitable-trade-and-southern-africa-cookie-cutter-approach-will-cost-lives-and-livelihoods

Equitable Trade and Southern Africa: A Cookie Cutter Approach Will Cost Lives and Livelihoods

Global Women's Project | Fri, Apr 7, 2006

"As members of the U.S. - Southern Africa Customs Union Free Trade Agreement Working Group (U.S.-SACU FTA Working Group), the Center shares the goals of a more just, sustainable and prosperous human society in the region. In this spirit, the Center and and more than a dozen other groups raised serious concerns related to the negotiations of the U.S.-SACU FTA and offer recommendations that are essential to a more just trade relationship between the United States and the nations of Southern Africa in this letter to embassadors and Congressional leaders."

Dear Members of Congress,

As members of the U.S.-Southern Africa Customs Union Free Trade Agreement Working Group (U.S.-SACU FTA Working Group), we have been following and welcome the Congressional attention that recently has been focused on these FTA negotiations. We note that Representatives Jeff Flake and Charles Rangel on February 13, 2006 wrote to the President supporting the completion of this FTA. That same week House Ways and Means Committee Chairman Bill Thomas at a hearing with the U.S. Trade Representative took the strong position that the USTR should not be using scarce resources on pursuing agreements with countries that are not willing to accept all the U.S. demands. Ambassador Portman identified the U.S.-SACU FTA negotiations as lagging. In fact, the parties to this FTA still have not committed to entering formally into negotiations, because of substantive areas of disagreement. We encourage Members of Congress to enter the debate on this important FTA while it is still in progress.

In the light of our position that all trade negotiations should be open and engage not only members of Congress but also civil society groups, we are sending you our analysis of current negotiations and a set of recommendations to move toward a more just agreement. Of primary importance is that the U.S. respects the right and responsibility of governments to maintain control over their domestic policy space just as the U.S. maintains this right and responsibility. To this end we offer an analysis and recommendations, including:

  • The U.S.-SACU FTA should provide the space for participating countries to create policies that retain and create jobs that respect International Labor Organization labor standards.
  • The U.S.-SACU FTA must contribute to rural development strategies, in the U.S. and Southern Africa, that promote subsistence and small-scale farms, dedicated to enhance food sovereignty and environmental sustainability. Countries should be able to enact legislation that protects products with special economic, social or cultural importance, such as corn and beans, from trade liberalization.
  • Given the concerns around intellectual property and access to necessary medicines especially in this vulnerable region of the world, the U.S. should take Intellectual Property Rights out of the current negotiations.

Further recommendations and the rationale for these positions are elaborated in the attached document. The endorsing civil society groups are also included.

We thank you for your attention to this communiqué.

The U.S.-SACU FTA Working Group (see below endorsements)

This statement was also sent to: SACU Ambassadors: Republic of Botswana Ambassador H. E. Mr. Lapologang Caesar Lekoa; South Africa Ambassador H.E. Barbara Joyce Masekela; The Kingdom of Swaziland Ambassador H.E. Mary M. Kanya; The Kingdom of Lesotho, Ambassador H.E. Molelekeng Ernestina Rapolaki; Namibia Ambassador H. E. Mr. Hopelong Uushona Ipinge. USTR: Ambassador Rob Portman; Florizelle Liser, Assistant US Trade Representative for Africa; Patrick Dean Coleman, Director for African Affairs. US State Department: Jendayi Frazer, Assistant Secretary of State for African Affairs.

U.S.-SACU FTA Working Group
c/o American Friends Service Committee
1501 Cherry Street
Philadelphia, PA 19102, U.S.A.
Contact: Jessica Walker Beaumont
Tel 215.241.7277
E-Mail: trade@afsc.org

March 20, 2006

Equitable Trade and Southern Africa: A Cookie Cutter Approach Will Cost Lives and Livelihoods

The United States-Southern Africa Customs Union free trade agreement (US-SACU FTA) negotiations began in June 2003 to create the first US free trade area with Africa. The Southern Africa Customs Union, which originated in 1889, is one of the oldest formal trading blocks and includes Botswana, Lesotho, Namibia, South Africa, and Swaziland. As organizations that have worked for many decades in Southern Africa and in the U.S. on issues that concern this region, we share goals of a more just, sustainable and prosperous human society in the region. In this spirit, we raise serious concerns related to the negotiations of the U.S.-SACU FTA and offer recommendations that are essential to a more just trade relationship between the United States and the nations of Southern Africa.

Although the negotiations continue to start and stall and the text remains a total secret, based on the experience and precedent of other US FTAs, it is not difficult to anticipate how the U.S.-SACU FTA will unfold. Looking at the North American Free Trade Agreement (NAFTA), US-Chile FTA, and Central American Free Trade Agreement (CAFTA) models helps us anticipate what will be included. After twelve years, the accumulated evidence surrounding NAFTA demonstrates that any agreement crafted along the lines of that accord would have potentially adverse environmental, economic and human consequences for many people in the United States and Southern Africa.

Democratic Participation and Transparency

US-SACU governments should take active steps to facilitate direct and meaningful engagement from civil society in negotiating the proposed US-SACU FTA. The exclusion of both U.S. and SACU workers, women, indigenous, ethnic populations, and others whose community will be affected by the FTA is unacceptable.

Although South Africa has established The National Economic Development and Labour Council (Nedlac) to serve as a mechanism for civil society to discuss social and economic policy concerns with government, broad participation and full transparency between all parties remains a hurdle.

The U.S. and other SACU countries do not have such formal structures. U.S. and SACU governments and trade officials must bridge the gap between the formal negotiating process and civil society by formally establishing a mechanism allowing affected sectors in all countries direct influence in negotiations. Further, US-SACU negotiations have not made available draft texts, proposals, timelines or agendas for the established channels of civil society to have an informed debate. It is essential that U.S.-SACU FTA negotiations extend, beyond the business sector, the appropriate mechanisms for democratic participation.

Negotiations should not move further without direct involvement from the affected communities and civil society groups in both the United States and SACU countries. We call for access to draft texts as they develop so that an informed public discussion can shape the outcome of negotiations.

Worker Rights

The U.S.-Jordan Free Trade Agreement (2000) was the first trade agreement that contained an enforceable commitment to respect the International Labor Organization (ILO) core labor standards, as well as enforce domestic labor laws, in the core of the agreement that were subject to the same dispute settlement as the commercial provisions. Since that time, every FTA negotiated has dramatically weakened the Jordan provisions, by making only one commitment in the labor chapter subject to dispute settlement or enforcement (to enforce own laws), and setting up a parallel and inferior dispute settlement mechanism. In this model, the only worker rights requirement is that countries should effectively enforce their own labor laws. Although provisions in CAFTA show an attempt to use fines as an enforcement mechanism, they will likely be ineffective because penalties are levied on governments of the countries where the violations occur, not the companies that violate.

With corporations' increased ability to relocate in search of lower labor costs, a "race to the bottom" has ensued. This trend is disproportionately felt by low-skilled labor that are forced to compete for jobs. Communities are also forced to compete for investment by requiring less of employers. The global race to the bottom has been a significant factor in the stagnation of job quality in the U.S. and the spread of sweatshop labor in Southern Africa. With no existing social provisions in the SACU mandate and the lack of resources for enforcement of member country labor laws, the U.S.-SACU FTA is likely to perpetuate rather than help this problem.

Lesotho saw an increase in jobs under the Africa Growth and Opportunity Act, but many of these jobs had people working under sweatshop conditions, including coercion. With the demise of the global Multi Fiber Agreement and its quota system, investment became more volatile with factories closing literally overnight and managers leaving the country without fulfilling their obligations to pay employees. Those that did not leave use the threat of doing so as a way to gain leverage over workers, thereby preventing them from organizing or joining unions.

The U.S.-SACU FTA should provide the space for participating countries to create policies that retain and create jobs that respect ILO labor standards.

Small Farmers in the United States and Southern Africa

In Southern Africa, where about 70 percent of the population lives in rural areas and suffers the greatest poverty levels, the impact of a trade agreement which does not address the needs of all farmers, especially poor ones, will lead to increased inequalities. In the region, the average per capita dietary energy supplies have declined over the past 15 years, to 2,160 calories per day against a requirement of 2,700; endemic drought turns chronic hunger into serious malnutrition, for the young and the weak (e.g. people living with HIV/AIDS). Impoverished and small-scale farmers (often female heads of households) produce primarily for local and national markets and simply cannot compete with large agribusinesses on the national or world markets. Regional food security relies most on access by rural women to productive resources, such as land, credit, farm inputs and market infrastructures.

Any trade agreement that covers agriculture must recognize national food sovereignty by guaranteeing governmental authority to pursue tariffs and subsidies that safeguard food security, increase food crop diversification and protect the environment. The United States government must prevent private and public dumping of U.S. grains in the region that adversely affects small scale farmers. Such farmers are unable to compete against imported agricultural goods sold below their own production costs or indeed, below the cost of agribusiness production in the U.S.

Current U.S. domestic farm policy, despite subsidies of billions of taxpayer dollars, is destructive of small and medium producers as well as the environment, and therefore, if exported via trade agreements, this agro-system could become harmful to other regions. Free trade agreements are inappropriate instruments to provide sustainable rural development and entitlement to food, either in the U.S. or in Southern Africa.

The U.S.-SACU FTA must contribute to rural development strategies, in the U.S. and Southern Africa, that promote subsistence and small-scale farms, dedicated to enhance food sovereignty and environmental sustainability. Countries should be able to enact legislation that protects products with special economic, social or cultural importance, such as corn and beans, from trade liberalization.

Intellectual Property Rights

The SACU agreement must not promote the monopolized control over nature, science and technology by global corporations. Instead, the fundamental right of governments to safeguard traditional knowledge, protect public health, and expand access to essential medicines must be upheld.

Access to Medicines

The SACU countries have the highest rates of HIV in the world and AIDS, as well as other treatable diseases, threaten to devastate the societies and economies of the region. Any trade treaty must not diminish Southern African countries' rights to secure the production, import, export and provision of affordable medicines to respond to the HIV/AIDS epidemic and other public health problems. The 2001 WTO Doha Declaration, to which the U.S. and SACU countries are signatories, explicitly reaffirms governments' rights to "protect public health and, in particular, to promote access to medicines for all." The United States must not pursue provisions, known as "TRIPS plus," that would undermine countries' rights to act in the interest of public health. These TRIPS plus provisions include restricting compulsory licensing or preventing access to test data by governments and potential generic manufacturers.

Given the concerns around intellectual property and access to necessary medicines especially in this vulnerable region of the world, the U.S. should take Intellectual Property Rights out of the current negotiations.

Traditional Knowledge

The Africa Union has long opposed patents on life and therefore, no trade agreement should require private intellectual property rights over bio-resources (seeds, plants, animals). In Southern Africa, the Africa Model Legislation provides legal alternatives for protecting breeders' rights, while fully honoring farmers' rights over seeds. Private intellectual property rights over bio-resources rewards transnational corporations, not small scale farmers growing food crops from saved seeds.

Southern African governments must be allowed to enact restrictions on genetically-modified organisms that they deem necessary to sustain regional crop varieties. Any US-Southern African trade agreement must recognize governments' authority to determine and implement publicly legislated safety standards for imported food products and not require abrogation of other international treaties, such as the Cartagena Biosafety Protocol. Under this Protocol, member governments cannot be required to permit entrance of food or agricultural products whether as food aid or commodities--treated with specific forms of technology that are of public concern, such as genetically modified organisms and irradiated foods.

In the U.S.-SACU FTA, small agricultural producers' rights should take precedence over Intellectual Property Rights where agricultural genetic resources are concerned. Additionally, the U.S.-SACU FTA should not interfere with a country's ability to live up to the commitment it made in ratifying the Cartagena Protocol and its parent Convention on Biological Diversity.

Investment, Capital Flows and Government Procurement

Any trade agreement should preserve government authority to regulate foreign investment in order to achieve national sustainable development policies. Governments should be able to protect public interest laws from suits and establish performance requirements in order to support an emerging productive sector or meet community development plans. This includes using government contracts to promote gender equality, social justice and respect for human rights. Equally, governments should be able to impose capital controls to protect their economies and citizens from destructive flows of speculative investment.

Despite the need to offset the economic legacy of colonialism, conflict and apartheid, participating countries could lose the right to enforce their affirmative action policies. This includes programs like South Africa's Black Economic Empowerment initiative.

The rights established under international human, labor and environmental agreements and conventions should take precedence over investor rights. The Investor-State clause in NAFTA, the US-Chile FTA and CAFTA grants foreign investors the right to sue governments for compensation over public-interest laws that could undermine their potential profits. Alarmingly, 42 cases have been filed thus far by corporate interests and investors under NAFTA's "Chapter 11" investor provision, many against local environmental, public health and safety laws. With only 11 of the 42 cases finalized, some $35 million in taxpayer funds have been granted to five corporations that have succeeded with their claims. Investment disputes between countries should be resolved in an accountable and transparent manner, and with the participati