TCP: For a just trade between peoples The Trade Treaty of the Peoples (TCP in Spanish) – proposed by President Evo Morales – is a response to the failure of the neo-liberal model, based as it is on deregulation, privatisation and the indiscriminate opening of markets.

It is no longer acceptable that a small group of powerful nations deny poor countries the right to design their own models of development based on internal needs, or for them to dictate global economic policies that even World Bank studies show will not solve problems of development.

During the 1990s, we were told that policies known as the “Washington Consensus” would enable poor countries to move closer towards the conditions for people in rich countries: Today we see that the exact opposite has happened. The rich are richer and the poor poorer. For this reason, the peoples of Latin America are starting to be authors of their own destiny, and are punishing by ballot box the authors of policies of submission which have been applied during almost 20 years.

TLC: Death of the countryside

The reality for countries that have signed a Free Trade Agreement (FTA) with the USA is far from the dream painted by neo-liberal economists. Mexico is the most interesting country to evaluate the effects of “free trade” as it signed the North American Free Trade Agreement (NAFTA) with the US and Canada in 1994. Whilst there was a growth in exports, studies show that the FTA destroyed a large part of small and medium-sized industries which were the main source of formal employment; dismantled the existing chains of production without creating new ones, and strengthened the de-nationalisation of the large-scale industrial sector geared to exports.

But perhaps the most harm from this policy of “trade liberalisation” has taken place in the countryside. Some writers talk plainly and starkly of the “destruction of the Mexican countryside.” From being self-sufficient and an exporter of basic foods, Mexico now imports 40% of its cereals and oil-based products that it consumes: between 1994 and 2000, its imports of rice increased by 242%, maize 112%, wheat 84%, soya 75%, sorghum 48% and beef by 247%. As a result in the last eight years, 1,100,000 agricultural jobs have been lost which has fuelled rural migration, not just temporary migration to fertile regions but also to cities and above all to the US. It is estimated that this has led to an exodus of 5 million Mexicans, which the US has tried to “resolve” with a wall on the border.

A recent newspaper article warned: “The possibility of life in the countryside for the large majority of thousands of producers is in doubt. The winners are no more than a thousand people set against millions of losers.”

To highlight an example of the inequality: in May 2002 the US approved the Law of Food Security and Rural Investment 2002-2011 which increased by almost 80% direct aid to agriculture with a package worth more than U$S 180 billion dollars over 10 years. In Peru, which has just signed a Free Trade Agreement, it is estimated that 97% of community-based companies and cooperatives will be swept aside by the Free Trade Agreement in order to allow the indiscriminate imports of wheat, cotton, soya and other agricultural products together with oil and beef.

What is TCP and what is it trying to do?

In contrast to capitalist ideology, TCP brings into the debate on trade integration principles of complementarity, cooperation, solidarity, reciprocity, prosperity and respect for countries’ sovereignty. In this way it incorporates aims that are absent in programmes of trade integration proposed by the North, such as the effective reduction of poverty, the preservation of indigenous communities and respect for the environment.

TCP understands trade and investment not as ends in themselves but as means towards development. Consequently its aim is not total liberalization of markets and the shrinking of States but rather benefiting all peoples. That is to say, the strengthening of small producers, micro-industries, cooperatives and community-based companies facilitating their exchanges of goods with external markets.

TCP is not directed towards a small export sector, but is instead proposed as part of a new economic model aimed at improving the conditions of life for Bolivians (income, health, education, water, culture) and to promote a sustainable, equitable, egalitarian and democratic development that allows the conscious participation of citizens in the taking of collective decisions. Whilst Free Trade Agreements are negotiated in secret, TCP must be based on active participation and discussion by social movements, which through our political instrument [party of MAS], is starting to govern Bolivia for all Bolivians.

TCP wants to rebuild the State, not destroy it

Trade integration promoted by dominant countries puts “market freedom” above regulatory functions of the State, and denies the weakest countries the right to protect its productive sectors. Free Trade Agreements are like a “padlock” that prevents an exit from neo-liberalism or the taking of sovereign measures such as the nationalisation of hydrocarbons. One of the clauses of the Free Trade Agreement of the Americas (FTAA) and other Free Trade Agreements says that conflicts between States and Companies have to be resolved in international tribunals whose jurisdiction is above national States.

Based on national interests, the proposal for a TCP promotes a model of trade integration between peoples that limits and regulates the rights of foreign investors and multinationals so that they serve the purpose of national productive development. Partners and not masters, as President Evo Morales has signalled. As a result, part of this proposal aims to give incentives to agreements between public companies of different countries in order to strengthen each other.

TCP does not prohibit the use of mechanisms to promote industrialization nor does it prevent the protection of areas of the internal market that are necessary in order to preserve the most vulnerable sectors of society. If FTAs imply the death of the countryside as a result of being put up against subsidized products from the North, TCP promotes the defence of economies of small-scale farmers and food sovereignty of our countries.

TCP recognizes the right of peoples to define their own agricultural and food policies; to protect and regulate national agricultural production to prevent the flooding of domestic markets by other countries’ excess products; and to privilege the collective good above the rights of agro-industries by controlling and regulating imports.

At the same time, TPC considers that essential services should be exclusively provided by public companies regulated by the State. The negotiation of any trade treaty must always put at the forefront the principle that the majority of basic services are public goods that can not be handed over to the market. For that reason in the Fourth World Water Forum in Mexico, the Bolivian delegation defended access to water as a human right and not a commodity.

TCP promotes an indigenous vision of development

Trade treaties designed in the North facilitate development and the expansion of the capitalist system on a global scale based on the unlimited exploitation of natural and human resources in the constant search for private benefit and individual accumulation of wealth, a vision which has inevitably led to degradation of our environment. Pollution and degradation with the sole aim of earning profit puts as risk the lives of groups of human beings who live closely in harmony with nature, such as indigenous communities.

FTAs cause the fragmentation and subsequent disappearance of indigenous communities not only because they contribute to the destruction of habitats but also because they promote naked competition in equality of conditions with large Northern companies.

TCP questions the sustainability of the theory of “economic growth” and the culture of waste of the West which measures the economic development of a country based on the capacity to consume of its inhabitants. Therefore it proposes another logic based on relationships between human beings, that is a distinct model of co-existence which isn’t based on competition and the urge for accumulation which takes advantage of and exploits to the maximum human labour and natural resources.

Rescuing the premises of indigenous culture, TCP promotes complementarity instead of competition; co-existence with nature against irrational exploitation of resources; defence of social property against extreme privatization; promotion of cultural diversity against mono-culturalism and the uniformity of the market which homogenizes consumers’ habits.

TCP defends national production

In neo-liberal rhetoric, it is argued that the State is able to save the most money by means of free trade amongst service and good providers. However, this argument does not compensate in any way for the impact that liberalisation of State Purchases to foreign companies has on national production; neither does it take into account the multiple effects an injection of resources into the internal economy can have. Pursuing efficiency in fiscal spending to save a few million dollars can not justify failing to use a mechanism to promote growth in the national economy, a measure amply used by industrialized countries.

TCP therefore urges all participating countries committed to a process of integration based on solidarity to give priority to national companies as sole providers of public entities. It is important to remember that in the majority of countries, despite their virtual dismantling in recent years, national States continue to be the principal buyer of goods and services. Independent of its agreements, the Bolivian proposal will establish list of priority providers, especially those from ethnic groups, cooperatives and community-based companies in order to avoid ruinous and impossible competition with powerful multinationals.

With its proposal for a Trade Treaty of the Peoples (TCP), Bolivia is proposing a path to a true integration that transcends considerations of economy and trade – whose philosophy instead is to reach an endogenous just and sustainable development based on community principles. It takes into account national differences based on population, geography, production, access to infrastructure and resources, and history and is developed in line with two most advanced proposals for alternative integration proposed by the Hemispheric Social Alliance (HAS) and the Bolivarian Alternative for the Americas, known best as ALBA in Spanish.

Ten principles of TCP

1. The Trade Treaty of the Peoples – proposed by President Evo Morales – is a response to the failed neo-liberal model, based as it is on deregulation, privatisation and the indiscriminate opening of markets.

2. TCP understands trade and investment not as ends in themselves, but rather means towards development. Therefore its aim is not total market liberalization and the shrinking of the State but rather seeking benefits for all peoples.

3. TCP promotes a model of trade integration between people that limits and regulates the rights of foreign investors and multinationals so that they serve the purpose of national productive development.

4.  TCP does not prohibit the use of mechanisms to promote industrialisation nor does it prevent protection of areas of the internal market which are necessary to preserve the most vulnerable sectors of society.

5. TCP recognises the right of peoples to define their own agriculture and food policies and to protect and regulate national agricultural production in order to prevent domestic markets being inundated with excess products of other countries.

6. TCP considers that vital services must depend on public companies as exclusive providers, regulated by the State. The negotiation of any trade agreement must hold as a central principle that the majority of basic services are public goods that can not be handed over to the market.

7. TCP proposes complementarity instead of competition; co-existence with nature against irrational exploitation of resources; defence of social property against extreme privatisation.

8. TCP urges participating countries involved in a process of integration based on solidarity to give priority to national companies as exclusive providers to public entities.

9. With the proposal for a Trade Treaty of the Peoples, Bolivia is proposing a true integration that transcends economic and trade considerations – whose philosophy is based on achieving an endogenous just and sustainable development based on community principles that takes into account national differences.

10. TCP proposes a different logic of relationship between human beings, in other words a distinct model of co-existence that isn’t based on competition and the urge to accumulate which takes advantage of and exploits to the maximum human labour and natural resources.