Free Trade Agreements and Environmental Destruction


Uruguayan President José Mujica, addressing the Group of 77 and China summit in Bolivia last Sunday, urged attendees to halt the massive “depredation of nature” underway worldwide by battling the West’s “culture of waste.”  Washington’s “free-trade agreements” in effect throughout Central and South America are products of this culture, and must count among their achievements the destruction of huge swathes of the region’s forests, the poisoning of its waters, and the ruin of scores of its indigenous communities.

Peru’s Awajún and Wampís peoples waged the culture war Mujica described when they protested the 2009 launch of the U.S.-Peru Trade Promotion Agreement (PTPA).  The accord granted firms “new access to exploit [indigenous] Amazonian lands for oil, gas and logging,” José de Echave and Lori Wallach wrote in The Hill a week ago, identifying policy outcomes that make the PTPA and similar arrangements “difficult politically,” in U.S. trade official Susan Schwab’s assessment.  A political difficulty in June 2009 was the crowd of men, women, and children “blocking the ‘Devil’s Curve,’ a jungle highway near Bagua, 600 miles north of Lima,” de Echave and Wallach explained.

But bullets solved that problem: Peruvian forces unloaded their clips into the demonstrators, and at the skirmish’s end dozens were dead and hundreds wounded.  WikiLeaks cables, just released, reveal Washington’s steadfast support for the Peruvian state at the time.  “The government’s reluctance to use force to clear roads and blockades is contributing to the impression that the communities have broader support than they actually do,” U.S. Ambassador P. Michael McKinley complained, blaming—on the day of the main confrontation—“social movement leaders seeking to make political hay” out of the situation, called a “crisis” in the memo.  How McKinley weighed this “crisis” against, say, the rape of the Amazon, or the systematic decimation of Peruvian peoples and territories, one can only wonder.

The PTPA’s predicted environmental impact makes it a worthy heir to its predecessors.  The North American Free Trade Agreement (NAFTA), which turned 20 this year, came after “Mexico implemented a series of major rural reforms aimed at transforming its agricultural sector to promote private investment and growth,” economics professor Edward B. Barbier writes, emphasizing “the 1992 revisions to Mexico’s land tenure legislation” as one of the crucial changes.  These amendments, conforming to World Bank prescriptions, helped dismantle structures of “communal land ownership” that were “capable of overcoming the ‘tragedy of the commons,’” Barbier explains, referring to their ability to mitigate deforestation.  But Meera Fickling and Jeffrey J. Schott, in a Peterson Institute book, point out that “[f]orest preservation is not sufficiently profitable compared with agriculture and use of land as pasture,” hence the current expendability of Mexico’s woodlands, wiped out at a rate of 1.1 million hectares annually post-NAFTA—nearly double the previous rate, according to the Sierra Club—as displaced campesinos, victims of rural reform, clear forests for farmland.

The NAFTA era has been one of deepening ecological depredation in Mexico.  “The expansion of environmentally destructive mining activities” there is another of NAFTA’s accomplishments, a study by five environmental and activist organizations notes, highlighting an aspect this arrangement shares with one of its counterparts, the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).  This accord went into effect for the U.S. and El Salvador, Guatemala, Honduras, and Nicaragua in 2006, for the Dominican Republic the following year, and for Costa Rica in 2009—in other words, after neoliberalism had ravaged the region.  Friends of the Earth reviewed an additional feature CAFTA-DR shares with NAFTA: “CAFTA’s foreign investor rules are similar to NAFTA’s Chapter 11, which has given foreign companies broad rights that do not exist under U.S. law,” and under which “foreign companies can demand compensation for the impact of environmental and public interest laws on their business interests.”

Mining corporation Pacific Rim, for example, cited protections CAFTA-DR affords investors in the suit it brought against the Salvadoran government.  “The company seeks $301m” and “claims El Salvador violated its own investment law by not issuing it a permit to dig for gold at the El Dorado mine,” Claire Provost reported in the Guardian.  Salvadoran officials denied permission partly on environmental grounds, with good reason: “Estimates suggest that El Salvador is the second most deforested country in the Americas after Haiti, and that 90% of surface water is contaminated,” Provost concludes.  Restored mining activity would threaten this precarious water supply, Blue Planet Project’s Meera Karunananthan wrote last year.  She described Milwaukee-based Commerce Group’s track record in San Sebastián, whose residents have “nothing to show for decades of gold extraction but the famous bright orange waters of the San Sebastián river, a classic sign of acid mine drainage from large-scale gold mining,” with cyanide at nine times—and iron at 1,000 times—the accepted levels.

Extractive operations are equally devastating in Colombia, where a “Trade Promotion Agreement” (CTPA) with the U.S. took effect two years ago, after a decade of intensifying “austerity, privatization, deregulation and export-led growth through trade liberalization,” as York University’s Jasmin Hristov summarized the developments in a 2005 Journal of Peasant Studies article.  This past April, UN official Todd Howland announced that extinction may well be the shared fate awaiting some 40 Colombian indigenous groups, at risk as mining operations expand throughout the country.  “During the last twelve years, over 1.5 million hectares of Colombian land have been sold off to large-scale mining corporations for exploration and exploitation of Colombia’s extensive mineral deposits,” the U.S. Office on Colombia wrote in a May 2013 analysis.  And Friends of the Earth draws attention to the CTPA’s investment chapter, which will “encourage further the boom in multinational investment in mining and oil drilling operations, many of which deteriorate unique ecosystems and displace local populations.”  Investment protections also “facilitate the continued rapid expansion of Colombia’s corporate palm oil plantations,” promoting “large scale deforestation and an increase in global warming pollution” in the process.

The obvious priority of the arrangements reviewed above is to secure investors’ rights, which Naked Capitalism’s Yves Smith clarified, in a critique of NAFTA, “have nothing to do with the case for ‘free trade’”— for reasons, we can add, that Adam Smith recognized centuries ago.  Smith, observing that “master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market,” thought the belief “that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it.”  Another economist, the Irish academic and politician George O’Brien, remarked in 1921 that the application of Britain’s nominally laissez faire approach “to Ireland might be translated: ‘Having put a country into a most unsatisfactory condition, leave it there,’” an observation still relevant today, borne out by Washington-backed environmental depredation in Central and South America.

Nick Alexandrov lives in Washington, D.C.

Nick Alexandrov lives in Washington, DC.  He can be reached at: nicholas.alexandrov@gmail.com

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