The obsolescence of the free trade model

At JBS S.A in Santana de Paraiba (Brazil), the world's largest beef producer, salted meat is waiting to be packaged and shipped.
Political article
The free trade agreement with the Mercosur countries raises questions. Those being affected locally fear even more power for agribusiness. And gloomy prospects for the observance of human rights.

"What do we hope to achieve through free trade agreements (FTAs)? Whose interests do they serve? The principle underlying free trade is that whatever benefits the most powerful ultimately benefits everyone. Yet inequalities are deepening despite economic growth. For 20 years now some have been calling for human rights impact assessments for FTAs so that their negative repercussions can be identified and prevented or supplementary measures taken", explains Caroline Dommen. The Geneva-based trade and human rights expert is currently working on a study commissioned by Alliance Sud to explore the human rights implications of the FTA with Mercosur (Argentina, Brazil, Paraguay, and Uruguay).

"For our study we have held in-depth discussions with the people affected, focusing on those human rights that they themselves perceive as threatened. The study does not purport to be exhaustive," says Dommen. Respondents answered an online questionnaire, some participated in a meeting co-organized by Alliance Sud in Buenos Aires.

The outcome of the survey is unequivocal. Up to 70% of respondents, in other words the poor and elderly, indigenous people, peasant farmers and workers in informal and sensitive industrial sectors as well as in SMEs view, the human rights impacts of free trade as negative.

Agribusiness as the Achilles tendon

"North-South trade agreements are asymmetrical and do not protect human rights in peripheral countries", says one respondent. If this trend is to be reversed, all affected parties – local communities first and foremost – must be consulted by the decision-making bodies. "Because there is no follow-up assessment and the negotiations were always conducted behind closed doors, the Agreement will lead to unequal trade: Mercosur will mainly export commodities low added value. Instead of this, family businesses and local processing of products should be promoted. That would raise incomes and lead to fairer distribution," says another respondent.

Survey participants identify industrial-scale agriculture as the Achilles tendon of the Mercosur development model; the Agreement will only further reinforce this model. "Our consumption patterns are becoming ever more unhealthy," it is stated in the survey, "we have cheap and low-quality agro-industrial food products, while the supply of wholesome foods is dwindling. This must be managed differently, agro-ecology should be subsidized, the right to land must be encouraged and the marketing of safe food produced by family enterprises without toxic inputs must be improved." Striking a more positive tone, another respondent also addresses the question of land rights: "The pressure on land belonging to local communities is considerable, and the legal situation is often unclear. But I believe that the Agreement can generate more stable employment than is currently being provided by agribusiness. The rights of indigenous people must be respected, however."

One-sided production structure

Criticism is levelled at the production model of Mercosur countries, the mainstay of which is currently agricultural commodity exports and mining. The new focus should now be on the production of industrial goods, products of low-to-medium complexity and the development of knowledge and services. All this would create prosperity in an economic area in the grip of recession, austerity programmes and inflation. This would boost the internal market and create jobs, "our foremost concern today", as is repeatedly stressed.

There is disquiet over the prospect of job losses in small and medium-size enterprises, which constitute one of the cornerstones of the Mercosur economy. Some point to NAFTA, the North American Free Trade Agreement, recently renegotiated and causing a decline in wages and labour standards in Mexico. "EFTA (the European free trade Association, which includes Switzerland, ed.) will be able to export industrial goods duty-free, which will exert strong pressure on our fledgling manufacturing sector."

Right to health in jeopardy

The organizations consulted are also concerned that the Agreement could limit the scope of Mercosur countries to take action to protect the environment, public health and the right to water, workers’ rights and indigenous peoples. As regards Switzerland, however, the main criticism is levelled at the strengthening of intellectual property rights contemplated in the agreement. It is feared that the extension of the life of patents and yet more stringent conditions for the marketing of generics will push up the prices of medicines. Access to medicines could become more difficult and the right to health jeopardized. Stronger patent protection could also make it more difficult for small farmers to access seeds.

Wrangling over seeds in Argentina

For years the Argentine government has been attempting to amend the law on seeds. The aim is to limit farmers’ rights regarding the use, storage and production of seeds, to the benefit of seed-producing multinational corporations. So far civil society organizations have managed to prevent this legislative amendment. They denounce the planned "legalization of biopiracy", which would enable biotechnology and agribusiness corporations to commercialize their seeds at the expense of farming and indigenous communities.

To cite Tamara Perelnuter, a political scientist at the National University of José Clemente Paz [Universidad Nacional de Jose Clemente Paz] in the province of Buenos Aires: “More than half the farmland in Argentina is being cultivated with genetically modified seeds. This makes us a strategic place for analysing conflicts over seed ownership. The transition to a different agricultural model should be pursued as a matter of urgency. This would have to be based on agroecology, which would make it possible to produce food that is wholesome and rooted in local culture. At the same time, account should be taken of the biodiversity and natural resources that belong to all humanity.”

The liberal government of Mauricio Macri wants to approve the draft of the law on seeds before the end of the year and of its term in office. In that connection it will derive a strong boost from the reinforcement of intellectual property rights as is likely under the EFTA-Mercosur Agreement, to the detriment of food sovereignty and the paradigm shift being championed by Mercosur civil society.