[biztech-discussion] More fun w/Zoellick (please note the article date)

  • From: "tkdunyak" <tkdunyak@xxxxxxx>
  • To: <biztech-discussion@xxxxxxxxxxxxx>
  • Date: Sat, 13 Mar 2004 07:22:39 -0500

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      Robert Zoellick's Free Trade Evangelism

      By Toni Solo
      Special to CorpWatch
      November 17, 2003 =20

             Photo: Cartoonist: Khalil Bendib =20
      Free trade advocates and multinational corporations are pinning =
their hopes on Robert Zoellick, the United States trade representative, =
as negotiators from around the two continents gather in Miami this week =
for the Free Trade of the Americas talks.=20

      At the meeting scheduled for November 20th and 21st, the trade =
ministers are expected to seek agreement on guidelines for a new stage =
of negotiations for an inter-hemispheric trade accord.=20

      As an economics undersecretary for former president George Bush =
who led negotiations for the U.S. state department in the North American =
Free Trade Agreement (NAFTA), Zoellick will attempt to use that =
experience at the table in Miami to cut new trade deals.=20

      "We're not stopping. We're moving with the countries that are =
willing to go," he recently told reporters, referring to the creation of =
bilateral and regional free trade agreements.=20

      Yet critics say that the free trade deal will simply enrich big =
corporations that Zoellick has worked for in the past -- for example, he =
was a paid consultant on the Enron advisory board before joining the US =
administration, earning $50,000 in fees from the company.=20

      But his negotiating skills failed just this past September when =
the G-21, a newly emerging and united front of developing nations who =
were determined to come to the table as equals, walked away from United =
States bullying tactics at the Cancun ministerial of the World Trade =
Organization in September causing the global free trade talks to =

      Bullying Costa Rica
      Here in Central America there are mixed feelings about Zoellick =
who moved aggressively to target the countries that joined the G-21: =
Costa Rica and Guatemala, by threatening their membership in a proposed =
Central American Free Trade Agreement (CAFTA).=20

      "I told them that the emergence of the G-21 might pose a big =
problem to this agreement since our Congress resents the fact that =
members of CAFTA are also in the G-21," he said. "If we want to =
construct a common future with them, resistance and protest do not =
constitute an effective strategy. In my talks with some of these =
countries, I sense that they are drawing the right conclusions."=20

      In addition Zoellick warned Costa Rica in early October that it =
must open its services market and privatize its telecommunications, =
electricity and insurance industries if it wants to join CAFTA.=20

      Costa Rica has drawn the greatest anger from the U.S. government =
because it cancelled the license of Harken, a Texas-based company, for =
oil exploration for an estimated 2.3 billion barrels of oil and 6 =
trillion cubic feet of natural gas, off Costa Rica's Caribbean coastal =
port of Moin. News of the company's plans helped rally a massive =
international campaign against oil drilling in Costa Rica, whose economy =
is heavily dependent on tourism.=20

      The company, which once counted George Bush, the current U.S. =
president, among its board members, demanded that Costa Rica enter =
arbitration before the International Center for Settlement of Investment =
Disputes (ICSID), a branch of the World Bank, this past September. The =
company asked for $57 billion in claimed investment and damages, a =
figure that represents about four times the country's annual gross =
domestic product.=20

      Environment minister Carlos Manuel Rodriguez insists that because =
SETEN, the ministry's technical secretariat, rejected the company's =
environmental impact study - necessary for the project to move forward - =
the contract is no longer valid.=20

      Costa Rican president Pacheco also flatly refused arbitration, =
saying the company had not exhausted local administrative and judicial =
settlement methods called for by the company's contract.=20

      "Privileges" of Free Trade
      Indeed the philosophy of the U.S. bilateral and regional trade =
negotiating positions were revealed in a recent speech this May to the =
Institute for International Economics in Washington DC, by Zoellick, who =
said: "The U.S. seeks cooperation--or better--on foreign policy and =

      Given that the U.S. has international interests beyond trade, why =
not try to urge people to support our overall policies? Negotiating a =
free-trade agreement with the U.S. is not something one has a right =
to--it's a privilege, he added.=20

      Examples of those trading privileges are easy to come by here in =
Central America: agricultural aid and other concessions were used by the =
Reagan administration to bribe and cajole Honduras into serving as a =
military base for illegal aggression against Nicaragua throughout the =

      Telecoms Tall Tales
      Meanwhile ordinary citizens in Central America, whose governments =
have failed to hold firm against privatization like Costa Rica, are now =
paying for the failure of their governments.=20

      For example in El Salvador, Antel telecoms company and CAESS =
energy distribution company were privatized while other state firms are =
being made prepared for sale.=20

      Advocates of free trade insisted privatization would increase =
efficiency and lowers costs but the opposite happened. Currently in El =
Salvador a basic residential telephone costs 274% of the cost in Costa =
Rica. The cost per call by minute is 43% dearer in El Salvador for =
normal rate calls. In Costa Rica the state monopoly charges by the =
second whereas in El Salvador the charge is rounded up to the next =

      Meanwhile in Nicaragua, where half of the former state monopoly =
remains to be sold, controversy surrounds the holding company of the =
monopoly's residuary body, Uretel, in the run up to the final sell off.=20

      Dodgy book keeping seems to have stripped out benefits that should =
have gone to the government. Mysterious losses have been alleged of up =
to US$9million. Equally mysteriously, the book value of the company's =
capital equipment seems to have fallen by US$16million.=20

      Telecom workers' union leaders fear maneuvers to lower the value =
of the company prior to the sale so as to increase profits for the =
eventual buyers. The company has yet to render accounts to the residuary =
body since the company was partially privatized in 2000.=20

      Unexpected Criticism
      According to Cyril Mychalejko at the Florida Fair Trade Coalition, =
the FTAA has been unexpectedly criticized by the World Bank, which =
usually supports free trade. Mychalejko writes:

      "A new World Bank study, published in October, suggests that =
unless rules for the proposed Free Trade Area of the Americas are =
radically changed, Latin America and the Caribbean will continue to =
suffer from the growing poverty and inequality that plague the region.=20

      "'Inequality in Latin America and the Caribbean: Breaking with =
History?', the World Banks annual report on the region released last =
month, states that the poor and ethnic minorities lack of access to =
public services and decision-making on political, economic and social =
policies are responsible for Latin Americas problems.=20

      "'This inequality slows the pace of poverty reduction, and =
undermines the development process itself,' said David de Ferranti, =
World Bank vice president for Latin America and the Caribbean.=20

      "The report suggests that to reverse this trend, the regions =
political and social institutions need to be more inclusive and that the =
poor need more access to high-quality public services, which include =
education, health, water and electricity."=20


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