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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.

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Entries since February 2011

Page Previous 12 • 3
We Need to Rethink, Not Rearm NAFTA

February 4, 2011 ·

U.S. President Barack Obama and Canadian Prime Minister Stephen Harper will meet in Washington today amid calls in the United States for tougher security on the northern border. Suggestions in the Senate Homeland Security Committee that the 49th parallel is an unruly ‘no man’s land’ threatening the American people, and that Canadians should need visas to enter the United States  prompted the meeting.

Experts expect the two leaders to announce today a “new” border partnership to ease the flow of goods and people across the border by harmonizing security, immigration and refugee, surveillance and possibly defense policy across the continent. There's nothing new about this plan. It's the regurgitation of the defunct Bush-led Security and Prosperity Partnership (SPP)without the Mexican “amigo,” previously  played by Mexican President Vicente Fox. As the Canadian business lobby suggested to Obama, it only “takes two to tango.”

Ten years ago, business lobbies of the three countries claimed the only way to keep goods, services, and investment flowing across borders in the post-9/11 security climate was through “deep integration,” or the arming of NAFTA. Corporate North America entered into a pact with governments to endorse transnational military exercises and surveillance systems, no-fly lists, and other ineffective but intrusive security measures.  In return , promises were made for open borders, a common and laxer regulatory environment, and a dominant role for big business in the creation of a North American economic policy that went beyond the already exhausted NAFTA.

The plan took many forms, from the 2001 and 2002 Smart Border Declarations with Canada and Mexico, a 2005 trilateral report from the Council on Foreign Relations on “Building a North American Community,” and the now reviled SPP, which emerged in Waco, Texas that same year. By 2006, a hand-picked group of 30 CEOs was driving integration as the North American Competitiveness Council -- the only non-governmental advisory group for the process.

The plan was corporatist, its successes modest, and its failures abundant. No one can legitimately claim it has made North America safer. Since President Felipe Calderon took office in 2006, the Washington-led war on drugs has left more than 34,000 dead in Mexico. Not only does the United States. arm the Mexican military with taxpayers’ money, but criminals enjoy a continuous supply of high caliber guns given the laxity of U.S. laws and the large supply close to the border. In addition, NAFTA’s prohibition on capital controls allows dirty money to flow both ways without effective restrictions.

In Canada, the thought of harmonized security and border policy will bring to mind the experience of Maher Arar.  A Canadian citizen, Mr. Arar was deported from New York to Syria based on RCMP intelligence shared without filters with the Department of Homeland Security. He was imprisoned and tortured for a year before being let go without charge. Canadian airlines continue to use U.S. no-fly lists to block innocent Canadians from boarding planes that travel through U.S. airspace en route to non-U.S. destinations.

The SPP goal of enhanced competitiveness and “prosperity” has also failed to materialize. Cheap U.S. corn exports into Mexico are blamed in numerous studies for the loss of millions of farm jobs. Manufacturing jobs have been leaving Mexico for Asia, where salaries are much lower, for several years. Mexico’s exports are from transnational industries, mainly the automobile sector, but not of the weakened national industry.

Canada has also lost manufacturing jobs as its economy becomes increasingly linked to raw resource exports. What manufacturing or other high-value industry still exists is increasingly U.S.- or foreign-owned. Even in the resource sector, extraction and export is carried out by private firms based on the profit motive only. Almost all of the heavy crude from Alberta’s tar sands goes to the U.S. for refining. Part of the SPP vision has been to consider energy, raw materials, and even water as part of a “North American” pool at the disposal of the free market, not something that must be preserved and protected for future generations.

Like many Canadians and Mexicans, we were relieved when President Barack Obama campaigned on a promise to renegotiate NAFTA to make it work for working families. “Starting my first year in office, I will convene annual meetings with Mr. Calderón and the prime minister of Canada. Unlike similar summits under President Bush, these will be conducted with a level of transparency that represents the close ties among our three countries," he said. "We will seek the active and open involvement of citizens, labor, the private sector and non-governmental organizations in setting the agenda and making progress”.

We still believe openness and involvement is what it’s needed. But we worry that Obama and Harper will use today's meeting to endorse a myopic economic and security vision for North America that takes us further away from a just and sustainable future. At the very least, the public should be informed promptly and in detail of the decisions taken, and to have a say in whether or not a “security perimeter” is in anyone’s interests.

Manuel Pérez-Rocha is an associate fellow at the Institute for Policy Studies in Washington D.C. Stuart Trew is a trade campaigner with the Council of Canadians in Toronto.

Food, Egypt, and Wall Street

February 3, 2011 ·

The dramatic rise in food prices is fueling a great deal of discontent in Tunisia, Egypt and elsewhere. It's a deep undercurrent propelling many of the poor, who face prospects of starvation to resort to the streets and to violence. According to the United Nation's Food Agency (Food and Agriculture Organization -- FAO) world food prices are up for the 7th  month in a row and are likely to surpass the record high reached in December 2010.

No end is in sight for this destabilizing battle with food price inflation in places like Egypt, where more than half of an average income goes for food. According to the State Department, more than 60 food riots occurred worldwide over the past two years.

In March 2008, a dramatic spike in food prices led thousands of people on the brink of starvation in Egypt to violently riot -- sending a seismic shock wave through the Mubarak regime. After the Egyptian military was able to distribute enough wheat to dispel the rioting, efforts to stockpile wheat by the Mubarak government have failed, as food prices continue to hover at record highs. 

The media is reporting many reasons for this problem ranging from soaring demand, cuts in food subsidies, droughts, and government mandates to use more grain-based biofuel. But, another significant factor is at play: unfettered speculation by investment banks. As noted in USA Today, in 2008, “the bulls may not be running on Wall Street, but they're charging in the commodities pits.”

At issue are the still deregulated commodity markets ushered in by the Clinton administration and the U.S. Congress with the passage of the Commodity Futures Modernization Act of 2000. Before this law, the Commodity Futures Trading Commission (CFTC) served as a cop on the beat, enforcing rules that prevent the distortion or manipulation of prices beyond normal supply and demand. But Wall Street banks and companies such as ENRON and British Petroleum were determined to make a lot more money from speculation by exempting energy-derivative contracts and related swaps from government oversight.

For this reason, the 2000 law allows entities that have no stake in whether adequate amounts of food and fuel are available for ordinary people and commodity-dependent businesses to make huge sums of money by gambling with other people’s money.

Soon after passage of the 2000 law, “dark” unregulated futures trading markets emerged, most notably the Intercontinental Exchange (ICE) in London -- created by Wall Street and European investment banks and several oil companies. A key practice involves “over the counter index trading" in which hundreds of billions of dollars of pension, sovereign wealth, and other institutional funds are used to flood “dark” commodity markets to buy and hold futures contracts without an expiration date or oversight. When it's time to make money on a losing bet, these funds are withdrawn, causing commodity price crashes and economic instability.

These transactions don't involve customary “bona fide” commodity traders, such as an airline company hedging on the price of jet fuel by purchasing futures contracts. As prominent hedge fund manager Michael McMasters noted before a U.S. Senate panel in 2008, this amounts to “a form of electronic hoarding and greatly increases the inflationary effect of the market. It literally means starvation for millions of the world's poor.”

Some world leaders are willing to speak out against the pernicious role of “dark” commodity markets. Recently, French President Sarkozy warned of further unrest and even war at the Davos forum, unless commodity speculation is reined in -- something that Wall Street and Republican lawmakers are bitterly fighting. The Dodd/Frank Financial Reform Law places some restrictions on this practice by the CFTC. In particular, the CFTC is beginning the process of weeding out “non bona fide” investment bank speculators.

True to form, House Republicans are demanding that the CFTC slam on the brakes. They're planning hearings and legislation to hamstring these efforts.

The spontaneous mass uprising of ordinary people in Egypt and the Middle East against their authoritarian regimes has many root causes. One that deserves much greater attention is unfettered speculation by powerful private financial institutions that don't care about world-wide starvation and its impacts. It's distorting global food supplies.

Justice for a 9-Year-Old Girl's Killers in the Courts and in Print

February 2, 2011 ·

A chilling trial is underway in Tucson for the murder of 9-year-old Brisenia Flores and her father. According to eyewitness testimony from her mother (the attackers thought she was dead), Brisenia pleaded with anti-immigration vigilantes who had invaded her own home, not to shoot her—shortly before they murdered her anyway.

Outraged over this incident or the fact that you've never heard about it? As the Village Voice argues, it deserves more national attention. The murders occurred in Arizona (which has seen its fair share of journalists reporting for prominent national media outlets lately) in May 2009. News of the trial has finally made it to CNN and ABC News, but not The Washington Post or The New York Times. That these papers of record haven't managed to print anything when British newspaper The Daily Mail ran this article on Jan. 26 is particularly baffling.

We at OtherWords ran an op-ed by the Southern Poverty Law Center's Heidi Beirich about the Minuteman vigilante movement in May 2010 that referenced this tragic incident. "We don't need armed vigilantes patrolling the border," Beirich wrote. "What we need instead is for Congress to act without further delay to bring our immigrant workers out of the shadows and into the American community as full-fledged citizens." Please read it for background on this case.

I also recommend the Seattle Weekly's account of the courtroom proceedings. It identified Shawna Forde, leader of Minuteman American Defense and a prime suspect in this murder case, as a former Seattle prostitute. It also mentions "Forde's sister Aranda (taking) the stand to recall family moments with her sibling, including Shawna's dreams of someday robbing drug cartels."

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