16. Plan Puebla-Panama and the FTAA

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CORPWATCH.ORG, 9/19/2002
Title: “PPP: Plan Puebla Panama, or Private Plans for Profit?”
Author: Miguel Pickard

Title: “Unveiling ‘NAFTA for the Americas’ “
Author: Timi Gerson

LABORNOTES, April 02, 2002
Title: “Plan Puebla Panama: The Next Step in Corporate Globalization”
Author: Tom Hansen & Jason Wallach

Title: “The FTAA is none of your business”
Author: Rachel Coen

Faculty Evaluators: Francisco Vasquez Ph.D., Richard Zimmer Ph.D.
Student Researcher: Jessie Esquivel, Dana Balicki

The Free Trade Area of the Americas (FTAA) is a trade agreement intended to spread NAFTA’s trade rules to an additional 31 Latin American nations by 2005. Working in conjunction with FTAA is Plan Puebla-Panama (PPP) a multi-billion dollar development plan in progress that would turn southern Mexico and all of Central America into a colossal free trade zone, competing in the world wide race to drain wages, working conditions, environmental protection and human rights.

PPP is the brainchild of Mexican president, and former Coca-Cola executive, Vicente Fox. Fox set priorities when first he took office stating, “My government is by entrepreneurs, for entrepreneurs.” Not surprisingly then, the PPP emerges not as a strategy to end the endemic poverty in this region, but rather to induce private investment/colonization as it turns over control of the area’s vast natural resources- including water, oil, minerals, timber and ecological biodiversity-to the private sector, mostly multinational corporations. Seven hundred and eighty companies of all sizes (Harkin, Union Pacific-Southern, International Paper, Exxon, Mobil, Dow Chemical of Mexico, Union Carbide, and Monsanto) sent representatives to the PPP informational meeting in Yucatan during the summer of 2002.

The ideas for the PPP area consist of: the construction of new ports, airports, railroads, bridges, 25 dams for hydroelectric generation, upgrading telecommunications facilities, including a fiber-optic network, upgrading electrical grids, highway construction and creating wildlife reserves to help facilitate “bioprospecting” by various multinational seed, chemical, and pharmaceutical companies.

The Inter-American Development bank (IDB) is the main backer of the Plan Puebla-Panama. The cost of $3.5 billion, which is 84% of the funds, will initially go for massive road construction and improvement on two stretches of highways. One of the highways will be from the Central America’s Caribbean coast up 1,745 km to the Mexican Border with Texas, and the other highway will run 3,150 km from central Mexico going into Panama city. These two highways are intended as trade routes, to open the entire Mexican and Central American corridor for business. The taxpayers of the eight PPP countries will be the ones paying for the development of the public-works projects that will benefit private transnational capital and assure profits for corporate investors.

Fox wants to transplant the maquiladora, production-for-export model that has been applied with disastrous results in northern Mexico. The American isthmus, the narrowest part of the Americas, will be turned into a state-of-the-art foreign product assembly station. Twenty-first century commodities are increasingly produced in the Pacific Rim, with China’s 1.2 billion people leading the way with the largest and lowest-paid workforce in the world. But transportation is a problem, when the largest consumer bases are located on the U.S. Atlantic Coast and in the upper Midwest. It is much Cheaper to ship these goods unassembled, using modern containerized shipping, but they still must be assembled into finished products before reaching the market. Thus the isthmus offers unique strategic advantages as the shortest land route between Pacific production and Atlantic consumption.

According to Pickard this project will 9nine southern Mexico states and all of Central America into a massive free trade zone, competing in the world wide race to the bottom of wages, working conditions, lax environmental regulation and disregard for human rights.

Under the FTAA, multinational corporations could leverage exploited workers in Mexico against even more desperate workers in Haiti, Guatemala or Brazil. The FTAA would intensify NAFTA’s “race to the bottom” and deepen the negative effects of NAFTA already seen in Canada, Mexico, and the U.S. PPP is one more “development” plan, instituted by transnational corporations and international financial institutions that will benefit the corporate bottom line but result in more poverty and displacement. More than 18 percent of the inhabitants of the future PPP area belong to indigenous communities, 40 percent are under age 15, and the majority live below the poverty line.

UPDATE BY MIGUEL PICKARD: The Plan Puebla Panama (PPP) was proposed in 2001 by Mexican President Vicente Fox, and was widely commented on in the area it covers, i.e., Mexico and Central America. But within the United States there had been very little information, in spite of the fact that the initiative benefits mostly U.S. multinational corporations. The fact that CorpWatch published the article on its web page meant that it was immediately picked up by numerous activist organizations and given wide circulation, especially to readers in the North. The article helps make clear how enormous areas of land (in the case of the PPP 102 million hectares, with 64 million inhabitants in eight countries), are being “prepared” for MNC exploitation, under the guise of infrastructure “development”, with no informed consent of the people living therein.

Due to efforts of activist organizations in the South, the threat posed by the PPP to people, and especially indigenous communities in the area, was given wide dissemination, especially through well-attended regional meetings that brought together social and civil organizations from Mexico and Central America. Opposition activities ensued from these encounters in practically all of the nine countries of the PPP, alerting governments that civil society was demanding to be heard, and that it had to be consulted, and alternatives discussed. Alternatives obviously had to contemplate the interests of inhabitants, and civil society in general, and not just those of MNCs.

The Mexican government realized by late 2002 that opposition to the PPP had grown enormously and that simply signaling a project as part of the PPP was enough to draw unwanted activist scrutiny and mobilization. In essence PPP publicity, touting it as a way out of poverty for an especially underdeveloped area, had failed. Rhetoric extolling the social virtues of the PPP was exposed as so much veneer for a project that puts natural and human resources at the behest of corporations. In essence the Fox government had to backpedal on the PPP, purging almost all references to it in official discourse, until new “packaging” could be found.

PPP discourse to date continues “on hold” within the Fox government. Its official PPP web site, for example, was removed from the internet during 2002. What is important to stress, however, is that the PPP megaprojects are continuing full steam ahead, even though they may not be labeled as such. Although now more difficult to detect, activists within Mexico and Central America are on alert and mobilizing to stop large-scale “development” projects that are bereft of civil society input.
A follow-up story on the PPP, and additional information on the PPP, are available at: The Lacandon Jungle’s Last Stand Against Corporate Globalization.


Miguel Pickard, CIEPAC (Center for Economic and Political Investigation for Community Action), San Cristóbal, Chiapas, Mexico

UPDATE BY TIMI GERSON: The North American Free Trade Agreement (NAFTA) has had disastrous consequences in Canada, the U.S. and Mexico. It has forced millions of Mexican farmers off of their land and into sweatshops along the U.S./Mexico border; created ghost towns in the American Mid-West and South with the shuttering of steel and textile factories; and led to successful attacks by chemical companies on Canadian federal bans on toxic substances. NAFTA’s race to the bottom in labor and environmental standards is well known, but equally damaging is its attack on democracy. NAFTA allows corporations to sue governments in secret tribunals when companies feel that “ investor rights” have been violated by public health and safety laws, local zoning ordinances or almost anything else that cuts into profit. It is this model – a slow-moving coup d’etat on democracy – that is being expanded via the proposed Free Trade Area of the Americas (FTAA).

On November 20-21, 2003 the 34 Trade Ministers of the Americas and the Caribbean (all countries except Cuba) are coming back to where it all began – Miami, Florida where negotiations were launched in 1994. Per usual, multinational CEOs will court and lobby ministers at the Americas Business Forum. Outside the security perimeter, plans for a People’s Gala, a march and rally, teach-ins and other activities showing the diversity of opposition to “NAFTA for the Americas” are being coordinated by a broad coalition including: the AFL-CIO, Public Citizen, the Sierra Club, Jobs with Justice, the Citizens Trade Campaign, Oxfam America, the National Family Farm Coalition, the Alliance for Responsible Trade and the Latin America Solidarity Coalition among others working with local Florida organizations like the Miami Workers Center, the Coalition of Immokalee Workers, Unite for Dignity and the Florida Fair Trade Campaign.

Despite mounting evidence to the contrary, U.S. media pundits cling to the ideological conviction that “free” trade lifts all boats. The reality is that a malaise with Washington Consensus policies of privatization and market fundamentalism is sweeping across the continent (witness the election of corporate globalization critics in Brazil, Argentina, and Ecuador). To date, and with almost no coverage in the American press, almost 10 million Brazilians have voted against the FTAA in an informal plebiscite; Americans, Argentines, Ecuadorians, Mexicans, and Uruguayans are engaged in similar processes of “consulta popular” or peoples referendum; and national or regional Forums Against the FTAA have been held in Argentina, Bolivia, the Caribbean, Central America, Colombia and Ecuador. In the face of rising international and domestic opposition, the Bush Administration seeks to lockdown as many countries as possible in bilateral NAFTA-style agreements as soon as possible. A Central American Free Trade Agreement (CAFTA) with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua is set to be complete by January 1, 2004. The U.S. – Chile free trade agreement was signed June 6, 2003 and will soon be voted on by Congress. These agreements are pieces in the FTAA puzzle. The Bush Administration is pushing a January 1, 2005 deadline for completion of FTAA negotiations with implementation by January 1, 2006. NAFTA was an experiment that failed; the FTAA will be more of the same.

To help stop the FTAA, contact Public Citizen’s Global Trade Watch at gtwfield@citizen.org or (202) 546-4996 and check out our website at http://www.tradewatch.org