ON NOVEMBER 26, the Morning Star editorial suggested that we should follow the century-old nostrum of German economist, Rudolf Hilferding in avoiding the “bourgeois dilemma” of protectionism or free trade and concentrate instead on building a socialist society. 

Whether or not they knew anything of Hilferding’s writings, the Zapatista Liberation Army in the Mexican state of Chiapas had different ideas when they launched an armed insurrection on January 1 1994 to coincide with the commencement of Nafta, the North American Free Trade Agreement, promulgated between the governments of the US, Canada and Mexico. 

The Zapatistas predicted that a tri-country agreement completely liberalising trade in goods and services spelt disaster for them and the rural working class, and they were not wrong. Mexican farmers had no hope of competing with subsidised products from north of the border and 1.3 million agricultural jobs were lost. In a country where corn (maize) is not merely a crop, but a deep cultural symbol tied to daily life, the effect of Nafta was catastrophic.

US fast-food culture has impacted upon Mexico to such an extent that it has become the largest consumer of ultra-processed products in Latin America. By 2010, seven out of 10 Mexicans were classed as overweight amid increasing levels of obesity that have taken a heavy toll of individuals’ health amid spiralling healthcare costs. 

Even Donald Trump has called Nafta the worst deal in history, though it should be noted that he was playing to a US audience witnessing the wholesale transfer of US manufacturing jobs across the border to take advantage of far cheaper Mexican labour. 

Noam Chomsky got it just about right when he stated that “North American” was the only accurate part of an accord that was not about trade, was not free and was certainly not agreed.  

Chomsky’s comment serves to illustrate the marked difference between trade agreements and free trade agreements, a difference that is sometimes not properly understood by journalists and the wider public. The former can be simply described as consisting of an exchange of goods and services between parties for their mutually beneficial purposes while the latter are multi-faceted instruments that typically include chapters on investment that allow for foreign capital to be treated no differently to domestic bidders in the compulsory outsourcing and procurement of public services. 

The investment chapters can then be enforced by the inclusion of an investor-state disputes settlement mechanism (ISDS) enabling corporations to sue nation states in international tribunals that take precedent over national legal jurisdictions.

The ability of governments in poorer countries of the global South to decide future economic policy and the principles of national independence and sovereignty are severely compromised by signing FTAs with the economic powerhouses of the US or the European Union which use them to further neocolonial and exploitative foreign policies for the benefit of their corporations who have shown no hesitation in deploying ISDS to make multibillion-dollar claims against a number of states, principally in Latin America. 

The answer to the question of why they would even enter into what are clearly asymmetrical agreements that deepen their dependency on Europe and the US is that their own ruling classes often identify with the neoliberal agenda of their trading partners in the mistaken belief that there is no alternative to the export of primary products regardless of the environmental damage and labour exploitation that inevitably accompany the presence of foreign mining interests or vast acres of tropical fruit plantations on land that could be better used for the needs of their own populations. 

Moreover, it would be naive to ignore the fact that export-oriented economic activities can be extremely lucrative for local elites or that huge tracts of land are already owned by foreign transnational enterprises that stand to benefit from the removal of tariffs and quotas.

Earlier this century, there was concerted opposition to the imposition of FTAs in both the US and Europe. The Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US would have established an FTA that encompassed 60 per cent of global GDP but negotiations stopped in 2016 following a huge campaign involving NGOs, civil society groups and, notably, trade unions on both sides of the Atlantic. The EU subsequently signed an FTA with Canada in 2016 which, effectively, would be a deal with USMCA, the renewed version of Nafta, though it has yet to be ratified. 

Previously, in 2005, a project to establish the Free Trade Area of the Americas (Alca) was finally laid to rest at a summit in Mar del Plata, Argentina, after a similar campaign of popular protest, the difference being that, at the time, several influential Latin American leaders also opposed the deal, including Brazilian President Lula and Venezuela’s president Hugo Chavez who pronounced it as being “buried.” 

The election of Donald Trump to serve a second term of office in the US, the increasing influence of China in Latin American markets and the EU’s self-defeating policy of cutting itself off from trading with Russia has prompted unelected commissioner Ursula von der Leyen to double down on efforts to complete a blockbuster deal with the South American common market, Mercosur, which incorporates Argentina, Brazil, Uruguay and Paraguay.

On December 6 she attended the Mercosur meeting in the Uruguayan capital Montevideo to sign off an association agreement that will cover a combined market of nearly 780 million people representing 25 per cent of global GDP. In doing so, she has made a significant step in concluding an agreement that was first discussed at a Rio de Janeiro summit in 1999. 

Since then, progress has been painfully slow and often delayed as a result of environmental issues and opposition from both European farming concerns and Mercosur members themselves. The European opposition has not gone away and it remains to be seen if enough member states agree to its ratification. Significantly, Brazilian President Lula, having previously opposed free trade deals, is now in favour, saying that it is a “modern and balanced text which recognises Mercosur’s environmental credentials.” 

Mercosur trade unions grouped in the South American Co-ordination of Trade Union Confederations (CCSCS) and the European Trade Union Confederation (ETUC) are, perhaps surprisingly, not against the agreement per se but oppose it because there is no binding labour clause contained within it. Demands for enforceable labour standards within FTAs are a consistent demand from international trade unions though experience has shown that they are impractical and virtually impossible to enforce where they do exist though that has not prevented US unions in AFL-CIO supporting the USMCA for that very reason. 

What is undeniable is that trade is a deeply political and politicised issue that trade unions and the left simply cannot ignore. Maybe the last word should go to Karl Marx who, upon observing the social unrest surrounding the repeal of the Corn Laws in 1846, observed that he was in favour of the free trade system because it would hasten social revolution. Tell that to Donald Trump.