How Free Trade Kills Freedom

The abomination that is the North American Free Trade Agreement has been well-documented - its results including lost jobs and more poverty in both Mexico and the U.S.

But the disastrous consequences of the Central American Free Trade Agreement are just now coming to light.

In El Salvador, CAFTA's anti-democratic rules are preventing El Salvadorans from protecting their own land against international mining corporations.

The Nation:

Today, residents of this area, some born in those Honduran refugee camps, are fighting US and Canadian mining companies eager to extract the rich veins of gold buried near the Lempa River, the water source for more than half of El Salvador’s 6.2 million people. Once again, civilians have been killed or are receiving death threats.

The communities’ goal: to make El Salvador the first nation to ban gold mining. We traveled to El Salvador in April to find out if this struggle to keep gold in the ground can be won. Our investigation led us from rural communities in the country’s gold belt to ministries of the new progressive government in San Salvador and ultimately to free trade agreements and a tribunal tucked away inside the World Bank in Washington, DC.

SNIP

Protesters around the globe know the sprawling structures that house the World Bank in Washington, yet few are aware that behind these doors sits a little-known tribunal that will be central to the Salvadoran gold story. The Salvadoran government never approved Pacific Rim’s environmental impact study, and thus never gave its permission to begin actual mining. In retaliation, the firm sued the government under the 2005 Central American Free Trade Agreement. Like other trade agreements, CAFTA allows foreign investors to file claims against governments over actions—including health, safety and environmental measures and regulations—that reduce the value of their investment. The affected farmers and communities are not part of the calculus. The most frequently used tribunal for such “investor-state” cases is the International Centre for Settlement of Investment Disputes, housed at the World Bank.

In the words of lawyer Marcos Orellana of the Center for International Environmental Law, who assisted the Roundtable in drafting an amicus brief for the tribunal, Pacific Rim “is trying to dictate El Salvador’s environment and social policy using CAFTA’s arbitration mechanism.” Pacific Rim’s “claim amounts to an abuse of process.” The brief methodically lays out how Canada-headquartered Pacific Rim first incorporated in the Cayman Islands to escape taxes, then brazenly lobbied Salvadoran officials to shape policies to benefit the firm, and only after that failed, in 2007 reincorporated one of its subsidiaries in the United States to use CAFTA to sue El Salvador.

For this article we attempted to interview Pacific Rim board chair Catherine McLeod-Seltzer, but her office steered us to the CEO of Pacific Rim’s US subsidiary, Thomas Shrake. In a tersely worded e-mail, he “respectfully denied” our request.

Pacific Rim is demanding $77 million in compensation. A case brought against El Salvador by another gold-mining company, Commerce Group, was dismissed earlier this year on a technicality, but the government still had to pay close to $1 million in legal fees and for half of the arbitration costs. Dozens of human rights, environmental and fair-trade groups across North America, from U.S.-El Salvador Sister Cities and the Committee in Solidarity With the People of El Salvador (CISPES) to Oxfam, Public Citizen, Mining Watch and the Institute for Policy Studies, are pressuring Pacific Rim to withdraw the case.

Many believe that even if Pacific Rim withdraws its case or loses in this tribunal, the very existence of “investor-state” clauses in trade agreements is an affront to democracy. “For democracy to prevail,” Sarah Anderson of IPS told us, “citizens’ movements and their allies in governments must work hard to eliminate these clauses from all trade and investment agreements.”

Back in Santa Marta, citizen groups are building sustainable farming as an alternative economic base to mining. Their goal: a “solidarity economy,” or, as Vidalina termed it, a “people’s economy.” Explained Vidalina: “We reject the image of us just as anti-mining. We are for water and a positive future. We want alternatives to feed us, to clothe us.”

Elvis Nataren, a philosophy student, led us to the riverbank and pointed to communal land where organic farms will be built. Three towering greenhouses already contain plump hydroponic tomatoes, green peppers and other vegetables. Together these should make Santa Marta self-sufficient in corn, beans and vegetables. As Elvis explained, “food sovereignty” was even more urgent in the wake of CAFTA’s passage, given the cheap foreign produce that began to flood the Salvadoran market. Elvis, Vidalina, Miguel, Francisco and others we met in Cabañas were well aware that as they nurture farmlands and the river vital to this alternative future, their success also depends upon struggles and debates in San Salvador and Washington.

A month after we returned home, the death threats against individual youths at Radio Victoria escalated, with such ominous untraceable text messages as: “look oscar we aren’t kidding shut up this radio or you also die you dog…”

And in June, nearly two years after Marcelo Rivera’s murder, the body of a student volunteer with the Environmental Committee of Cabañas was found dead, with two bullets in his head. As the Roundtable press release noted: “The last time he was seen by fellow environmental activists was…distributing fliers against metallic mining in [Cabañas] in preparation for a public consultation about the mining sector taking place nearby.” “Not another mine, not another death,” implored the Roundtable.

Read the whole thing.

Liberals support local decision-making and national sovereignty over corporate power.