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NAFTA as a regulatory framework

NAFTA as a regulatory framework


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By Adolfo José Acevedo Vogl

Contrary to the more widespread notion, the FTA with the United States comprises, as fundamental aspects, a series of fields, extremely comprehensive due to their ramifications and implications, which go far beyond mere regulations regarding the commercial exchange of goods across borders. of the countries.

NAFTA as a supra-constitutional and supra-democratic regulatory framework.

Contrary to the more widespread notion, the FTA with the United States comprises, as fundamental aspects, a series of fields, extremely comprehensive due to their ramifications and implications, which go far beyond mere regulations regarding the commercial exchange of goods across borders. of the countries. In fact, only six chapters of the 22 of the Treaty refer directly to regulations related to trade in goods.


If it were limited to regulating this matter - the trade of goods across borders - an FTA with such small countries would be of comparatively inconsequential importance for the United States. On the one hand, given the tiny size of our markets, they do not constitute a genuinely strategic or primary interest for this country, strictly commercial.

On the other hand, in this field our countries no longer have much ground to negotiate: at this point, in many cases there is not much they can offer in terms of additional reduction of customs duties. In fact, customs duties in general are already so low that access to our markets to a large extent, with the exception of some privileged products (such as sugar) can basically be considered virtually free, or mostly open, for goods. North American.

In this regard, Nicaragua shows the lowest average tariff level of all the Americas - including Canada and the United States - which, adjusted for overvaluation, represents a NEGATIVE average protection rate for our economy.

This does not mean that a strictly trade-focused treaty with these very small countries is completely, or not at all, of interest to the US. It is simply emphasized that its comparative importance would not be, politically and economically, very high: very probably a treaty based on the strict discussion of "border" issues would not be enough to even discuss any type of access to the North American market for products. of the region that compete with products declared "sensitive" by that country, such as peanuts and sugar. Neither each country in the region separately, nor the region as a whole, has, commercially speaking, the minimum importance required so that, on a strictly commercial basis, the United States puts on the table even minimal access to these items, which they have sought keep out of all your business negotiations.

What our countries can "offer" to the United States, in these negotiations, is not so much access to its very small and almost completely open markets, but rather extraordinary concessions in all fundamental areas for the United States, which serve to establish points of advanced and precedents that surround, isolate, and eventually corner, the largest countries in the hemisphere (especially Argentina and Brazil), and in the Third World (India) that so easily resist submitting.

For the United States, in the case of these bilateral negotiations with small countries, in addition to promoting its own strictly commercial interest, it is above all about imposing precedents in these fields, different from the exchange of goods, establishing in each one of them provisions that go far beyond the obligations negotiated multilaterally in the WTO, where the balance of forces has become somewhat more balanced in favor of developing countries.

In the North American strategy, it is a matter of rapidly weaving a line of bilateral or regional treaties that weakens the common positions of developing countries in the framework of these multilateral negotiations, and isolates the most belligerent countries in the defense of these positions, while strengthening the centrifugal tendencies, which tend to accept the pressures of large corporations in developed countries, and of the governments of these countries.

By contrast, while for the United States, access to our markets does not constitute an issue that takes away sleep, or that even interests them too much, from the point of view of our countries, this issue, the issue of "market access", ( From its double angle, on the one hand, gain reduced access margins for exportable products considered important, for which the United States keeps its markets closed, because this country defines them as its "sensitive products"; and on the other hand, concern about the impact of the additional commercial opening will provoke on extensive sensitive sectors of domestic production) is the one that is of the greatest interest, to the point of frequently neglecting completely the serious implications that arise when giving up in the other fields, in exchange for marginal concessions in the commercial plane.

It even occurs, within each country, knowing that to gain access to the North American market for some items implies making "reciprocal concessions" in the others, the problem is how to distribute the charges and costs among the various items and sectors. Each sector puts into motion its lobbying and pressure capacity to avoid costs as much as possible, and as a whole, although they cannot avoid assuming part of the costs, they try to minimize those that each one assumes by placing the greater burden of costs on issues that impact, more than individual items, society in general.

At its core, a crucial asymmetry is created, adding to the fundamental asymmetry underlying a negotiation between parties of such unequal size and power: the only way that small, poor countries can obtain some marginal concessions on investment. access of some items of special interest to the US market is by making fundamental concessions in all other fields of strategic interest for that country, without dwelling long on the consequences, costs and implications that this entails (although, to tell the truth, not It is clear that the governments of these countries have had, or tried to form, a precise idea of ​​the magnitude of the costs and impacts of everything they agree on, in these fields, for the country and its future).

Thus, instead of achieving increased access to the markets of developed countries that was promised in the Uruguay Round, developing countries have since been involved in an unequal negotiation process through which they are forced , to obtain some additional marginal quotas for access to these markets, to accept increasingly comprehensive and inflexible rules on intellectual property, investments, services, and government purchases, with severe implications for these countries and their future.

These rules - on intellectual property, services, investments, and government purchases - are completely devoid of any economic rationale, beyond the mercantilist interests of a narrow list of powerful groups in industrially advanced countries. Bilateral and regional trade agreements are often much worse as they impose even more inflexible prerequisites on developing countries, in these fields, in exchange for a few crumbs of market access from larger partners? (Rodrik, Dani: "The Global Governance of trade as if Development Really Mattered", United Nations Development Program UNDP, 2001).

In order to understand the growing prominence that these new issues have acquired - services, investments, intellectual property rights, government purchases -, introduced for the first time in the negotiations of the Uruguay Round that culminated in 1994, compared to "border" issues. , It must be taken into account, first, that the process of unilateral trade liberalization and tariff reduction itself carried out by developing countries after the Uruguay Round, promoted in many cases through the conditionality of multilateral financial organizations, in The effect has reduced the relative interest of developed countries in the issue of market access, in their negotiations with developing countries, because, thanks to such openness, they already have very open access to these markets; the exceptions are few, and they occur mainly in the case of some of the larger developing countries, which have kept some important sectors of their economies relatively protected.

However, perhaps the most important thing to take into account, in order to understand the relevance that these issues acquire in the US bilateral trade negotiations with small countries, is the fundamental change experienced by the North American economic structure. Currently, 80% of employment in the United States, and 60% of GNP, is generated by services, while traditional manufacturing has seen its share decrease rapidly in recent decades. The United States controls 16% of world trade in services, while a large part of the North American firms linked to the provision of services obtain an increasing proportion of their profits from their operations abroad.

This has had its expression in the foreign trade policy of this country, dominated by the economic interests with greater lobbying power within it.

In terms of services, the US is interested in promoting the direct "commercial presence" of North American firms in the provision of services in the domestic market of third countries. The commercial presence of these firms in the provision of services has been defined in such a way that it extends to any activity classified as services: telecommunications, financial services, professional services, advertising, commerce, fast food, bioprospecting, hotels, energy, transportation , fast delivery services and provision of drinking water, education and health, etc.


The so-called liberalization of "international trade in services" therefore basically consists of forcing the opening of all services, in developing countries, including those provided so far exclusively by the State, to investment by North American firms, and the deregulation of said services, that is, ensuring that the provision of the same is carried out mainly based on considerations of maximizing the private commercial profitability of the firms, going, as much as possible, over any public controls and regulations that limit the expected benefits of companies, established based on criteria of protection of the collective interest, national interest, public health, the environment, to ensure the population's access to public services provided by private companies, or other considerations of order economic or social that each country could establish democratically, in use of the regulatory and legislative of the National State.

Given the size, and the financial and competitive capacity of these companies worldwide, it is expected that they could dominate, without much effort, the potential market of developing countries, including taking over the market for services that are still provided under public monopoly. displacing local providers with relative ease or reducing them to serve less profitable or attractive markets (although of course the US simply refuses altogether to even discuss international liberalization or market opening of the services in which they have comparative advantages developing countries)

In connection with the foregoing, the United States is interested, in addition to eliminating restrictions on the presence, action and monopoly control by its investors in these markets, in establishing exceptional protection mechanisms for them.

For this, it has established the extraordinary principle of protection of said investments against "measures equivalent to expropriation"; This means establishing a supra-constitutional protection against any regulation, measure, rule, law, decree ordinance, policy, resolution, administrative action, etc., adopted by the authorities of the country, of any level of public administration, that its investors consider that it somehow reduces your expected flow of profits, or raises the risk level of the investment. It is argued that this would reduce the net or discounted present value of the expected flow of benefits of the firms, which is equivalent to the net present value of the investment, so that, by reducing the value of the investment as a result of these measures, we would be in the presence of a true "indirect expropriation" of a part of it, which should be compensated, by the estimated amount of the value of the loss.

In passing, it should be remembered that ANY public regulation has the effect of imposing certain costs or reducing potential benefits to private agents, which they could receive in the absence of regulation, in order to protect a higher collective or public interest (for example, the prohibition of selling liquor to minors obviously reduces potential commercial benefits to their distributors, but no one denies that this is justified by the public interest; but against the regulations that force companies to reduce or eliminate polluting emissions, which represent high costs for the rest of society, impose certain costs on firms, but they exert great pressure for these regulations to be eliminated)

On the other hand, the so-called "declining industries" of the US export to developing countries investments in labor-intensive segments of the "old economy" manufacturing, which operate on the basis of maquiladora operations in the form of enclaves in the "free zones". But our countries are rapidly losing "comparative advantages" in terms of the cost of labor, to "attract" such investments: today, many Asian countries supply much more abundant labor, and above all much more sweet potatoes, than that of CA countries.

The United States also exports, in the case of goods, primarily goods bearing "intellectual property rights": products subject to trademarks, patents or other monopoly rights, medicines, seeds, video games, movies, DVDs, software - which report to their companies huge monopoly rents, or extraordinary profits, in the form of price overruns that are placed 4, 5 and even 10 times above the "normal" price or above the marginal cost (or they export technology under license that has in return a strong royalty payment)

It is in the interest of the companies that hold these monopoly rights to enforce worldwide the "protection" of these "rights", which amount to a huge tax on developing countries (monopoly prices are equivalent to a high markup on the marginal cost, and can be assimilated to a tax with a very high rate) The consequences of this, in the field of drug prices for example, are devastating for poor countries.

It is also important for North American companies to take over the INTERNAL market for government tenders and purchases at all levels, in developing countries.

It is therefore evident that in the current conditions, what is of primary interest for North American companies, much more than the old and less and less relevant "border" regulations, is the set of policies, norms, regulations and the legal framework itself that Each country applies WITHIN its borders, and that directly or indirectly affect all these fields, different from the exchange of goods.

How are bilateral treaty negotiations, between the US and small countries, in this context?

In this context, negotiations with the United States are produced by small developing countries that choose bilateral negotiations with this power, hoping to win, if they negotiate on their own - apart from multilateral or broader regional negotiations - some small preferences, that is, some additional, necessarily marginal, quotas for access to the North American market, especially for some products of special interest to the governments of these countries, such as sugar and peanuts in the case of Nicaragua.

Incidentally, in the case of these products, as it is known they were received, quotas lower than those initially advanced and subject of course to the application of "safeguards" and possible exemptions by the US.

In our case, it was also sought to maintain some preferences for exports of textile products from Taiwanese and North American maquilas - although it is interesting to note that in the field of textiles, the achievements achieved run the risk of being diluted when, from In 2005, quotas on textiles will disappear, which will place exports from CA countries in open competition for the North American market with Asian countries, where wage costs are much lower. In the case of Mexico, many maquiladora companies have begun to emigrate to these countries.

These "achievements", in terms of "access to the North American market", are obtained in exchange for, first, and according to the demand for "reciprocity" of the US in agricultural matters (which never extends to eliminating its enormous agricultural subsidies) to completely deliver the agriculture of our countries (on which it depends for 43% of Nicaragua's total occupation, 75% of which is generated by family agricultural units that produce without any type of access to resources) to the unequal competition from highly subsidized North American production, in the presence, furthermore, of abysmal differences in productivity levels between North American agriculture and that of our countries, under different schemes that lead to exactly the same result - from now on, producers must expect, from the beginning, import quotas (increasing over time) FREE OF ALL TARIFF, together with decreasing tariffs and prices of imported products that also they are decreasing, as a result of the enormous exportable surpluses and the dumping practiced by developed countries.

The costs of this are simply incalculable for our country.

But in addition, these "achievements" are obtained in exchange for making extreme, unilateral concessions to the United States, which go far beyond what the United States could currently hope to obtain within the framework of the WTO itself, and the FTAA itself, in these "Other fields", extremely comprehensive, which for North American companies - for which they would represent enormous benefits if they extended to all developing countries -, are currently the fundamental fields of interest.


In fact, the US "negotiating" strategy consisted in obtaining, first, absolutely everything it wanted in all these "other fields", demanding in one after another much more than what was established in the respective WTO Agreements, promising in return marginal quotas for access to its market, whose definitive negotiation of course was left for last; Once all its interests in these fields had been obtained, as a reward, at the true end of the negotiations it granted access quotas lower than those initially promised, and subject to exemptions and safeguards.

By the way, "safeguards" and other exceptional measures were initially established in trade agreements as a special mechanism to protect sectors of great economic and social weight for the countries, that is, sectors or items that represent at least significant percentages of the product. and employment, for example basic grains in our countries - which in the case of Nicaragua have such an enormous weight - against serious disruptions caused by a possible excessive increase in imports that compete with the products of this sector as a consequence of liberalization. commercial, which could lead to a severe crisis.

The US, for its part, establishes "safeguards" for items that do not represent even 0.1% of its GNP and a much smaller percentage of its global employment, and that in no way can be seriously "threatened" by the truly tiny imports of our products. countries, much less lead to a national crisis of the least significance. It is relevant to note that in NAFTA, the only country that has made use of the safeguards has been not the poorest country in the Treaty, Mexico, which has suffered enormous costs in agriculture, but the richest and most powerful country in the Treaty , The USA

But even so, as Stiglitz has remarked, it is not even assured, in any case, as the sobering experience of Mexico amply shows, real access to the North American market, in areas important to poor countries: the US reserves the right to use unilaterally and arbitrarily the entire battery of technical, sanitary and sanitary measures and finally its antidumping legislation, when, under pressure from the respective lobbies, it simply decides to close the entry of a product on which it has granted quotas.

The implications, however, go far beyond economic ones. Much more.

In fact, the FTA has the claim of an absolute supra-constitutional framework since it establishes principles, norms, rights and mandates that aspire to have primacy over the Political Constitution of the Republic, over which, on the contrary, the Political Constitution MUST have supremacy, if Nicaragua is to continue to exist as a country, and as an independent democratic republic.

Under this scheme, trade negotiators become the new legislators (supra constitutional). The State virtually loses its regulatory power, and a significant part of its sovereign and democratic legislative power. The country is left with its hands absolutely tied, at least for the next half century, with no possibility of applying or establishing practically any significant regulation, in any fundamental field of national life, that cannot be challenged as a violation of some principle, treaty rule, mandate or commitment, or its "spirit". Even a resolution of the Supreme Court of Justice can be challenged. In fact, from the start, the entire Constitution is challenged.

I quote from Dr. Chávez:
Art.182 - "The Political Constitution is the fundamental charter of the Republic, the other laws are subordinate to it. The laws treated, orders or provisions that oppose or alter its provisions will have no value."
Art.183 - "No power of the State, government body or official shall have any other authority, faculty or jurisdiction than those conferred by the Political Constitution and the laws of the Republic."

Both precepts build the PRINCIPLE OF LEGALITY, and the PRINCIPLE OF CONSTITUTIONALITY, which governs the Public Administration, and other Powers of the State, and which is the backbone of the entire Nicaraguan legal system. In this sense, to disrupt it is to break with the constitutional order and the legal order since such provisions are binding, not only for officials, agents or representatives of the Public Administration, but also for the rest of the powers of the State, including the judicial.

But this constitutional supremacy goes further, since the same article 182, already transcribed, says that THE LAWS, TREATIES that oppose it or alter its provisions, WILL HAVE NO VALUE. Putting in evidence that even international treaties can be subject to constitutionality control, so in this sense the interpretation of this precept cannot be other than to proclaim that INTERNATIONAL TREATIES are only valid if they are subject to what the Constitution provides.

Until now, our Constitution does not allow the transfer to international organizations of powers that are exclusively within the scope of Public Bodies of the State of Nicaragua, and even when Nicaragua is a signatory of integrationist agreements. Such is the case of the recognition of the Statute of the Central American Court of Justice; it does not have competence in matters of internal affairs because its competence is limited to Central American integration, there being no limitation to the application and superior recognition of our constitutional norms. "

This Treaty grants a dispute resolution mechanism, converted into a court, a supra-national, and supra-constitutional status, and places external investors in the position of going beyond the legal framework and the competent national jurisdictional courts.

If a company considers that a government has violated the exceptional rights and guarantees granted by the FTA, for example that measures "equivalent to expropriation" have been applied to it, it can initiate legal action to obtain compliance with those exceptional rights, enshrined in the treaty, embarking for this purpose in a dispute resolution process with the objective of claiming monetary compensation outside the country's judicial system. Those ‘investor-state’ claims of the FTA will be litigated in special international commercial arbitration bodies, closed to any type of public participation, either as observers or with the right to speak. Decisions made in these bodies are binding, that is to say, mandatory and final.

These mechanisms do not offer the minimum guarantees of due process and openness that do exist in national courts. Instead, three-person panels made up of professional arbitration judges meet behind closed doors to watch companies' attacks against government policies or actions. , to see the defense of the governments, and to review entire reams of allegations and counter-allegations presented. Instead of acting as conciliators, the members of these courts become judges and jury at the same time. These courts are empowered to rule that a NAFTA member country has to pay an unlimited sum of money from its taxpayers, as compensation to a company whose rights under NAFTA were damaged, according to the criteria and conclusions of the three arbitrating judges.

As Dr. Chávez recalls, even the Criminal Procedure Code itself was modified, under IMF conditionality, to assimilate it to the North American criminal procedural tradition, in order to adapt the domestic legal and regulatory framework to the preferences, uses and customs of the North American companies.

This treaty also commits the ratification of TEN additional treaties, each of which has its own serious implications, in its articles.

Obviously, the intention is to establish a single, universal and absolute framework of rights, competencies, powers, prerogatives, exceptional privileges and mandates to protect the interests of North American companies, through bilateral and regional treaties of this type, going over the the multilateral negotiations where the US has met with severe resistance to this claim, and above any constitutional and regulatory framework of any State.

These norms aspire to have absolute and universal validity, over any constitutional framework, over any consideration of public interest, social rights, human rights, and over the very existence of a National State, with a basic minimum of sovereignty expressed in respect for its constitutional framework, and for the democratic right to decide - for at least the next 50 years, only administrators would be elected from a rigid and immovable semi-colonial framework, without any democratic right to decide.

This supra-constitutional framework is placed even above the most basic human right, the right to health, and even more so the right to life, as shown by the analysis of the very serious impact of what was agreed on the issue of patents on drugs.

If we are thought to be exaggerating, consider the following. Joseph Stiglitz, Nobel Laureate for Economics, later Chief Economist and First Vice President of the World Bank, was Head of the Council of Economic Advisers to President William Clinton, while the Uruguay round of the GATT was being negotiated, which culminated in 1994, where, under the pressure from the large pharmaceutical corporations, the US Government struggled to introduce as a key element the strongest possible protection of? rights? of intellectual property. This is his testimony, in this regard:

"The Council of Economic Advisers ... was concerned that in the Genoa trade negotiations, the US Trade Representative was not taking a proper balance, but merely reflecting the pressures on him by pharmaceutical companies ... The Council was also concerned that these nuevas protecciones pudiesen conducir a precios muy altos de los medicamentos en los países en desarrollo, privando a los pobres y los enfermos de los medicamentos que necesitaban desesperadamente… nos preocupaba que al firmar el tratado de la Ronda de Uruguay, estuviésemos firmando simultáneamente la garantía de muerte para miles de aquellos en los países en desarrollo que se verían privados de los medicamentos que podrían salvarlos… nuestras preocupaciones resultaron reales" (Joseph Stiglitz, "The Roaring Nineties". 2003)

En la OMC se introdujeron finalmente, en el año 2001, algunas limitadas flexibilidades, en el caso de los medicamentos, a las obligaciones en materia de "propiedad intelectual" que todos los países deberán acatar a partir de 2005. Estas flexibilidades permiten a los países en desarrollo expedir licencias obligatorias para producir medicamentos genéricos, bajo condiciones que cada país puede determinar por sí mismo. Está por determinar en negociaciones ulteriores, si además se permitirán importaciones paralelas.

Al suscribir este Tratado, Centro América se ha auto excluido de estas y otras flexibilidades futuras que se negocien. Este tratado con los EEUU no sólo contiene disposiciones que de hecho imposibilitan el ejercicio de estas limitadas flexibilidades, sino que contempla un numero significativo de obligaciones adicionales, en este campo (y en todos los demás campos), que terminan por cerrar por un plazo ad-infinitum el acceso de medicamentos genéricos a la población empobrecida.

"El riesgo de un acuerdo bilateral…es que tú tienes un poder de negociación (entre EEUU y pequeños países) aún más desbalanceado (que en las negociaciones multilaterales). No son los Estados Unidos contra el colectivo de países en desarrollo en su conjunto, sino los Estados Unidos contra Marruecos, Estados Unidos contra los pequeños países de El Caribe. Uno de los aspectos de esto que más dice, es el del acceso a medicamentos que salvan vidas. Hay un extendido consenso, pienso, de moverse en la nueva ronda (de la OMC) a lo que es llamado "TRIPS minus", una revisión del Acuerdo de Propiedad Intelectual para re-balancearlo en beneficio de los países en desarrollo. En los acuerdos bilaterales, por el contrario, los Estados Unidos, han insistido en la búsqueda de un TRIPS-plus", poniendo mayores restricciones aún que las que tenemos en los EEUU, restringiendo los medicamentos genéricos más de lo que ellas están restringidas en los EEUU, y esto obviamente deviene un punto focal de oposición, pero esto no fue sólo en un área. Los Estados Unidos simplemente hicieron lo mismo en una área después de otra, para maximizar el resentimiento" (Joseph Stigliz, Questions and Answer Period, en Center for Global Development, The Stiglitz Plan: From Doha to the Developing World Saturday, April 26, 2004, http://www.cgdev.org)

Nosotros podríamos parafrasear a Stiglitz y decir: "nos preocupa que al firmar este tratado – mediante el cual se cedió de manera absoluta a las presiones e imposiciones de los EEUU – se esté firmando simultáneamente la garantía de muerte para miles de aquellos que se verían privados de los medicamentos que podrían salvarlos?

* Economista – Nicaragua – Articulo publicado en ALCAABAJO


Video: NAFTA and USMCA (July 2022).


Comments:

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