In an Op-ed article in the New York Times published June 2012, the author claims that the United States, China and the European Union should sign free trade agreements with developing countries in Latin America like Peru and Colombia that are beginning to grow rapidly. According to the author, the developed countries could "do well while doing good", or in other words, profit while helping these developing countries grow their economies.
Unfortunately, this article takes a naive approach to the specific needs of Latin America as a whole, and Colombia in particular. A free trade agreement with the United States or the European Union could be devastating for Colombia's receding war on drugs. (In fact, Colombia actually signed a free trade agreement with the U.S. in May of 2012. Applauded by the U.S. pork industry and the White House, and mourned by many sectors of Colombian society including the small-scale farmers; only time will reveal the full impact of this agreement. For more information on the terms of the agreement and some background information on U.S./Colombian economic relations, this Economist article is very informative.) The U.S. and the European Union provide enormous subsidies for farmers, especially in the beef and pork industries. Without protective tariffs to balance out these subsidies, many small Colombian farmers will no longer be able to compete. "Small farmers… lack the basic infrastructure necessary to successfully export. These farmers- who tend to be located in conflict zones and have already been oppressed by the on-going armed conflict- will certainly not be able to compete domestically with exports from the U.S." (U.S. Office on Colombia. May 20, 2011.)
There is a legitmate fear that these farmers will turn to the only crop still profitable, coca.
Western advocates for free trade often overlook the fact that many Colombian farmers are also indigenous peoples, so the likelihood of them moving from their ancestral lands to cities, where manufacturing jobs created by the free trade agreement are emerging, is very slim. And really, it would be detrimental to Colombia and Latin America if they did. Cultural diversity is an important characteristic of Latin American society, and indigenous tribes have made enormous strides in gaining collective rights under the law. Free trade agreements could begin eroding that progress.
In class we talked about the benefits of free trade on paper, concluding that there were few downsides. However, applied to real world situations in cultures outside of our own, more problems emerge. If America and the European Union truly want to help our neighbors to the south, free trade agreements may not be the solution.
ReplyDeleteThese are both very informative articles, however, I am on a slightly different side of the argument when it comes to indigenous peoples remaining indigenous peoples. At least on the whole, globalization and the modernization of our world makes it increasingly difficult and unlikely that the majority of indigenous peoples will be able to remain indigenous. In the effect that they do begin to modernize along with their countries economic modernization they will, at least in certain industries, need to develop an urban business population. Of course there will be winners and losers in this scenario but history shows that modernization and urbanization go hand in hand. Just as underdevelopment and poverty go hand in hand.
We also talked about how the benefits to free trade are often much larger for producers than for consumers, which is true in the case of indigenous populations. In this article from the New York Times (http://occupyamerica.crooksandliars.com/diane-sweet/bribery-mexico-i-can-hear-wal-mart-sto), it was revealed that Wal-Mart bribed its way into building a Wal-Mart in the small town that is home to the archeological site of Teotihuacán. Authorities in the town had previously developed a new zoning map that would limit development near the pyramids, an area that include a local woman's alfalfa field. Wal-Mart used bribes to acquire modified zoning maps that allowed them to build the new Wal-Mart in that field. The benefit gained from this for the producers might be enormous, however local businesses and the woman who lost her alfalfa field will not gain.
ReplyDeletePaige- Indigenous peoples are probably not going to 'modernize' anytime soon. They don't want to and they shouldn't have to, plus their collective rights are now recognized by the U.N. In many countries, indigenous people are beginning to stand up for their rights (ex: the president of Bolivia is indigenous.)
ReplyDeleteIndigenous people lived for hundreds of years in Latin America before Europeans came and most tribes didn't have problems with poverty or starvation before European intervention. Cultural diversity is an essential part of South American culture, it should be looked as an asset not an obstacle. Development can happen in Latin America, but not if the wealthy political elite continue to create policies that increase inequality: sacraficing the poor (in economic terms) majority for 'development' (aka increasing the profits for the wealthy business elite & MNCs.)
Well done.
ReplyDeleteI agree, many times it is very sad to see old methods give way to the new. Indeed, preservation of the past for aesthetic reasons is very nice and I believe important. In addition, sustainable development is not only important, it is essential to our long term survival. Hopefully we will see the light and find more ways to further economic progress using sustainable methods.
Such is the nature of things, however. Economics / dealing with scarcity / trying to produce more with less, always involves tradeoffs. The fact is, we have ever expanding populations and only 1 earth. As a result, we are likely to experience additional disappointments as many old methods and things that we like give way to new ways and things what we don’t like. It is very disappointing. However, we must look on the bright side, do the best we can and try to keep moving our lives forward. We don’t have much of a choice as the human population is going to keep growing and growing for the foreseeable future. See: http://en.wikipedia.org/wiki/World_population
Best,
Rick
Piper- I completely agree that indigenous people should have the choice of whether they should modernize or not and I agree that many will choose to live traditional, indigenous lives. However, I do not believe all or even of the majority of them will continue to want to. For example when I worked with the indigenous people in the Thar Desert of India, the majority of them dreamed for the day that they could work in an urban area and the money and opportunities it afforded them. Of course there are horrible stories and work conditions but there are also great success stories. Again there are winners and losers.
ReplyDeleteAnd yes, indigenous people have been living indigenous lives for thousands of years but how much of this was their choice and how much of it was that they were unaware another kind of life existed? or that they simply did not have access to it?
I completely agree with you that there are atrocities committed against indigenous peoples, and that their rights and options should be protected environmentally and otherwise. However, their right to work in a market economy and create and urban/modern life for themselves should also be protected.
I agree with what you stated in regards to the indigenous people in Colombia, however, I don't quite agree with the statement that you posted: "There is a legitmate fear that these farmers will turn to the only crop still profitable, coca." I believe that an open market in Colombia will in fact decrease the overall coca production, basically due to the increase of international influence through MNC and other International Organizations that will be partaking in the open market. I believe that this free trade agreement can and should contribute to the war on drugs.
ReplyDeleteGreat blog post. I like how you incorporated the importance of cultural diversity in Latin America in this post. I agree with Paige that the "right to work" for the indigenous population should also be protected.
ReplyDeletePaige brings up an interesting point regarding indigenous people securing protection when working in market economies , influenced by international actors . Often times people associate Multinational Corporations as corrupt capitalist companies that infringing upon domestic traditions but, The Economist offers a different notion. Stating that MNC's are " the embodiment of modernity and the prospect of wealth: full of technology, rich in capital, replete with skilled jobs". The article also touches on the idea of the multiplier effect, which we discussed in class, highlighting that these changes from technology and new capital could potentially attract more investors in the same industry as well as in others.
ReplyDeleteAlthough the US-Colombia Trade Agreement is fairly new, statistics have showed that Colombia has benefitted from the trade. The smaller farmers do get the short hand of the stick in this agreement but the benefits are far greater than this problem. Since the introduction of this agreement, a report issued by the Embassy of Colombia in the United States in September 2011 finds “ data indicating that homicides dropped by 24% since 2000 and that homicide of union members decreased by 81% during the same period”. Unemployment rates have also fallen in Colombia. Also US farmers have benefitted because they have a a new open competitive market access. Another study shows that by not having this agreement, investment would decrease by 4.5 percent in Colombia. Furthermore it would increase unemployment by 1.8 percentage points, representing a new loss of 460,000 jobs. GDP would go down by 4.5 percent, and the poverty level would rise by 1.4 percent.
ReplyDelete