The Free Trade Area of Americas (FTAA) is a proposed treaty that involves the 34 countries of North and South America (excluding Cuba). It would create the world’s largest free market zone created to date - affecting 650 million people and $9 trillion in capital. As with every issue there are two opposing points of view.

Pro FTAA arguments

Open markets and free trade (which is what the FTAA is all about) increases the variety and quantity of goods and services. Consumers benefit in an open market system because increased competition will produce a wider variety of goods and lower prices. With more companies competing for the consumers attention, companies will have incentive to produce new products. Investors or individuals who invent new products or find efficient ways to produce products at a lower cost will have the opportunity to grow rich.

American manufactures that make big ticket items (like Boeing and Caterpillar) would benefit most from a free trade agreement because of the elimination of import tariffs which can substantially increase the cost of their products.

Con FTAA arguments

So what is wrong with a market in which consumers will get a greater variety of goods at a lower price? Well the devil as they say is in the details and with the FTAA there are lots of potential conflicts of interest that I think need to be addressed.

The first issue I have is it seems negotiations are held behind closed doors, with no citizen input but plenty of suggestions from business interests. California energy deregulation meetings were pretty much one sided (just like the current FTAA talks) and now ill conceived plans are screwing over the citizens of the state while out of state energy producers and parent companies of the local utilities are recording windfall profits.

The second major issue I have is, corporate interests are writing laws that are constructed to constrain a local governments ability to set standards for public health and safety, to safeguard the rights of their workers, and to ensure that corporations do not pollute the communities in which they operate.

The FTAA provides a potential “back door” for the Multilateral Agreement on Investment (MAI) through the negotiations on investments and liberalization of the financial services sector. Modeled on NAFTA's Chapter 11, the USTR says that FTAA will include “investor-to-state” suits. These allow corporations to sue governments in secret “corporate courts” for any act that may indirectly effect their profits, such as the enforcement of public health laws. In other words, the FTAA would provide a hemispheric “regulatory takings” clause that explicitly values corporate profits over human costs and environmental degradation. NAFTA cases that set a likely precedent for FTAA actions under this provision include:

• The funeral business chain, Loewen Group used NAFTA's investor protection to sue the U.S. government for $750 million in cash damages after a Mississippi court found the Canadian corporation guilty of malicious and fraudulent practices that unfairly targeted local small, mom and pop funeral homes. NAFTA permits companies to sue governments over rulings or regulations that may potentially effect their profits. Under this case, Loewen is claiming that the lawful operation of the state court system to protect smaller business from unfair business strategies violates rights given to them through NAFTA.

• The U.S.-based Ethyl Corporation forced Canada to pay $13 million in damages and drop its ban on the dangerous gasoline additive MMT, a known toxin that attacks the human nervous system. Currently, in a similar case, the Canadian-based Ethyl Corporation is challenging a California ban on MTBE, a toxic gasoline additive, to the tune of $970 million.

• U.S.-based Metalclad Corp. sued a Mexican state to allow a toxic waste disposal site, claiming that the environmental zoning law forbidding the dump constituted an effective seizure of the company's property -- a seizure that, under the property rights extended by NAFTA (and to be perpetuated in FTAA), requires that the offending government compensate the company.

Lastly, although business owners and corporate shareholders would see the benefits of free trade, line personal (the people who actually make the actual product) may not. Because business will measure progress in terms of the bottom line, manufactures in the United States might be tempted to transfer work abroad because of lower labor costs (thus eliminating good paying jobs in the US and lowering the standard of living of those displaced workers). Workers in foreign countries working in some plants might be put in harms way, because of lax safety rules.

My personal conclusions about the FTAA

My two cent opinion on the FTAA in its current form is, major business interests would be clear winners and the environment would suffer.

Economic integration might lessen regional tensions and improve lines of communication for the 34 countries. However, the idea of exporting an American consumer based mentality to the rest of Latin America, irks me to no end since the life style is not sustainable in the long term.

If the FTAA were laid out to look ahead a century or two, instead of a financial quarter or two, then we could have trade and still preserve the environment for the next generation.