Action for Community and Ecology in the Regions of Central America GREEN PAPER 3: Freedoms That Are Abolished

Table of Contents Introduction 1) Trade and Investment: a little history 2) What is in the FTAA Agreement? Biotechnology and the FTAA Protecting Intellectual Property Free Flowing Capital What about Free Flow of People? Militarization and Globalization in the Americas Free Trade and Economic Developmen 3) Making the FTAA a Reality Corporate Globalization in the Americas Dry Canal Megaprojects and the FTAA Dry Canal Megaprojects and the FTAA 4) The FTAA and the Future of the Hemisphere Protecting Corporate Profits FTAA Attacks the Forests 5) Is THIS What Democracy Looks Like? The FTAA's Threat to Democracy North American First Nations: Going Corporate? Free Trade and the Proliferation of Sweatshops 6)THIS is What Democracy Looks Like Free Trade and the Proliferation of Sweatshops 7) What You Can Do Sources Acronym List download this document (488k). ACERCA

Free Flowing Capital by Bob Naiman Center for Economic and Policy Research In the wake of the Asian financial crisis, which was largely brought on by the deregulation of international financial flows (such as currency speculation and trading in stock futures) in the region, even economists who strongly support deregulation of trade flows in goods have become sharply skeptical of efforts to remove government restrictions on international financial flows. Such economists include Jagdish Bhagwati, former adviser to the General Agreement on Tariffs and Trade (GATT) and Joseph Stiglitz, former Chief Economist at the World Bank. Stiglitz has pointed out that there is no evidence that developing countries benefit from deregulating financial flows, and considerable reason to think that deregulating finance leads to increased economic instability. Both the North American Free Trade Agreement (NAFTA) and the draft Multilateral Agreement on Investment (MAI) contained provisions barring any government policy which could have the effect of discriminating against foreign investors. Such provisions would have the effect of preventing governments from acting to discourage speculative financial flows. Yet it is widely understood that NAFTA and the MAI are "templates" for the investment provisions of the still-secret FTAA. Chile, for example, is widely believed to have largely escaped the effects of international financial volatility since 1991 as a result of restrictions that Chile has put in place to discourage short-term inflows of foreign capital. These restrictions include a "reserve requirement" that foreign investors make a non-interest bearing deposit equal to a certain percentage of each investment for a year. This raises the cost of short-term investments. This sensible policy could be made illegal by the FTAA. In the wake of recent international financial crises, the idea of imposing small taxes on international financial transactions to discourage speculation ­ "Tobin taxes" ­ has gained many adherents. But the FTAA is likely to prohibit such measures.