COCAINE AND FREE TRADE

The War on Drugs, Trade Policy and Latin America's "Turn to the Left."

In 1991, the United States cooked up the Andean Trade
Preference Act with the nations of Bolivia, Colombia, Peru and Ecuador
- -- the source of nearly all the cocaine produced in the world. Later
renamed the Andean Trade Promotion and Drug Eradication Act, the
ostensible purpose of the agreement was to combat "the scourge of drug
trafficking" by providing economic incentives for the development of
alternatives to coca cultivation. The key carrot: tariff and duty-free
access to U.S. markets.

The most recent version of the ATPDEA will expire at the end of 2006.
According to a new briefing paper from Oxfam, the threat of losing
preferential access to U.S. markets has been employed by the U.S. as
the big stick in its ongoing negotiation of bilateral free-trade
agreements with Colombia, Peru and Ecuador. This summons up quite the
unseemly drug metaphor. In an effort to solve a problem largely
generated by the hunger of its own population for an unending coke
binge, the U.S. hooks the Andean nations on the head rush of unbridled
access to its own markets. Then, once the Andean nations are fully
addicted, it threatens the countries with withdrawal of the fix,
unless they agree to open up their own markets to the U.S. on terms
tailor-made to the design of U.S. corporate interests.

If you're the kind of person whose blood pressure starts to rise at
the mention of the words "free trade" you would be well advised to pop
a few hypertension pills before reading Oxfam's new study. It offers
perhaps the best argument I've seen so far on why the proper target of
anti-globalization activists should not be the World Trade
Organization, where developing nations have managed to fight the
developed world to a draw, but instead the bilateral agreements the
U.S. is aggressively pursuing worldwide. Such agreements routinely
require that trading partners agree to concessions that are above and
beyond what has been hammered out in the multilateral negotiating
sessions of the WTO.

Oxfam is not unbiased on this subject -- its briefing papers can't be
considered impartial academic analyses. But it does what a good
advocacy position statement should do: get the blood flowing, and
provide numerous starting points for further research. The
intersection between the war on drugs and free-trade policy is just
one such provocative linkage.

It hardly needs to be noted that the ATPDEA has had a minimal effect
on cocaine production. The primary beneficiaries of the act have been
urban elites far removed from coca cultivation areas. Indeed, as one
intriguing prize-winning paper, "The Andean Trade Promotion and Drug
Eradication Act: A Case of Inconsistent Policymaking," written by an
undergraduate at George Washington University, notes, the opening up
of trade, in conjunction with other laissez-faire economic policies
pushed by the U.S., may actually have made it easier for coke
traffickers to operate: The loosening of controls over financial
flows made money laundering a much smoother process!

That, in turn, opens up a much larger story of the Andean region and
the United States, one in which the horrific debts accumulated by the
military dictatorships of the '60s and '70s led to the structural
adjustments of the '80s and '90s, but without resulting, in most
cases, in the kind of economic growth promised by World Bank and IMF
policymakers. Which, in turn, encouraged even more peasants to look
toward coca production for a steady income. And, in the case of
countries like Venezuela and Bolivia, propelled forward the much
ballyhooed "turn to the left" in Latin America spearheaded by Hugo
Chavez and Eva Morales.

It will be hard to find a better example of the interconnections that
define the global economy than this unholy mess in which the drug
appetite of the North provides an excuse for lopsided trade deals that
benefit transnational corporations at the expense of poor people in
the South. Some observers of Latin America appear shocked at the
popularity of Morales and Chavez with the most disadvantaged sectors
of society in their country. Some try to explain it by claiming that,
in the case of Venezuela, Chavez has bought the people off by rashly
giving away the country's oil patrimony. But how anyone can be
surprised at the success of populist leaders who decry the influence
of U.S. corporate interests on the living standards of people in Latin
America is quite beyond me.