Andean week of action

By Published On: September 26, 2005Categories: TLC/ALCA2 Comments on Andean week of action

The last week has seen rap artists, stilt-walkers and women with bowler hats, of course, joining together to campaign against a proposed Free Trade agreement between Colombia, Ecuador, Peru and Bolivia with the US (TLC are the initials in Spanish). Marches and various events were hold across the Andean region to coincide with the 12th and penultimate round of negotiations.

In an open letter, 53 Andean Parliamentarians said: "We can not sacrifice the future development of our country as this [treaty] will especially affect the poor. It will also seriously limit the capacity of our States to adequately fulfil their role as regulator and redistributor which is needed to eliminate the gulfs of inequality and injustice that exist in our countries."

Category: Bolivia | TLC



  1. Miguel (MABB) October 1, 2005 at 6:40 am - Reply

    As an economist I have to make at least some comment on the 10 reasons list to oppose the FTAs.
    Basically the reasons are arguably accurate to some extent, but fundamentally wrong on the theoretical foundations.
    One example. While it is correct that subsidies seriously distort the free exchange of goods and thus have adverse effects on the people ultimately, it is not correct to assume that automatically the country with the biggest economy will benefit only.
    One of the basic principles in free trade is that of competitive advantage. That basically means that a country concentrates its production on what it produces best. It has nothing to do with how big the economy is, it has everything to do with efficiency and productivity.
    Sorry, I wanted to post a comment on the Solon blog but I couldn’t find a comments link.

  2. Nick Buxton October 2, 2005 at 10:36 am - Reply

    Hi Miguel, I am not an economist, but have a fundamental problem with theories like competitive advantage if they ignore structures of power in which trade or commerce operates. Bolivia may have competitive advantage in minerals and oil, but that doesn’t stop multinational energy firms being the main ones to benefit up to now.
    Obviously trade can play an important role for Bolivia, but the problem is that the starting point for the current trade negotiations isn’t to negotiate a trade deal to reduce poverty but simply to negotiate a trade deal. The assumption is that trade will naturally benefit Bolivia, but many years of an open economy here show that it doesn’t translate into poverty reduction. In fact it has worsened poverty and inequality. Countries that have developed, such as those in East Asia, have done so using fundamentally different policies to the ones now imposed through these trade agreements.
    Worst of all, US is putting pressure on Andean countries to accept a deal that has been shown from NAFTA and now CAFTA to mainly benefit them. Bolivia feels it has no choice because it will lose the trade preferences it got under the Andean Trade Preferences Drugs Enforcement Act.
    Given that the US has signed up to the Millennium Development Goals, the starting point should be how to use trade to halve poverty, but that doesn’t even come into the negotiations. In fact after CAFTA was only narrowly passed, it is clear that the US negotiating team is determined to pass a trade deal that is even more beneficial to North Americans.
    On an aside note, my understanding of competitive advantage was that it was developed based on the assumption that capital was immobile. David Korten, a former World Bank economist argues that with the current highly fluid nature of capital and its ability to seek countries of low wages, poor regulation, that competitive advantage has now been replaced by “downward levelling.”

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