September 10th marks the La Via Campesina’s International Day of Action Against the World Trade Organisation (WTO) and Free Trade Agreements (FTAs). LVC mark this date as the anniversary of the death of Farmer Lee Kyung Hae, a vocal figure in the stand of peasant farmers against deregulated international trade. At a time in which key international bodies such as the IMF and WTO are advocating liberalised trade beyond levels the global economy has ever seen, it is imperative to understand the impact that increasingly freer trade has on workers and peasants around the world.The overwhelming perspective from peasant organisations and aligned movements is that FTAs benefit corporate interest at the expense of peasants and workers. FTAs are designed to remove barriers to trade between countries. Proponents of free trade, in particular the WTO, claim that international trade is fundamental to boosting the economic development of nations. However the experience of farmers, peasants and land workers around the world is that free trade mechanisms directly impact the livelihoods of small and peasant farmers.To better understand why the free trade narrative does not work for the majority of the world’s population it is necessary to unpack some of the direct impacts of free trade on peasants and workers around the world. Three key impacts will be explored in more detail:
1) FTAs stop governments from protecting domestic industries and workers
2) Wealth generated by freer trade does not benefit peasants and workers
3) FTAs undermine efforts to mitigate climate change, which disproportionately affects people in the global south and in agricultural economies.
FTAs Stop Governments Providing Protection to Domestic Industries
Small, local farms and businesses have little to gain from removing barriers to trade. This is particularly relevant if domestic production is not sufficiently developed such that local goods can not be produced as cheaply as they can be in countries that have more financially efficient production methods. Removing trade barriers results in imported products undercutting local production, destroying the livelihoods of producers in that region.
FTAs create legally binding contracts to enable these processes. Within trade agreements traditional protectionist mechanisms to support domestic industry, such as tariffs and subsidies, are often removed. Some examples include (1):
Rules that make it easier for foreign investors to buy or lease land managed by traditional farmers. This results in land grabs for the purposes of industrial farming or energy production.
Tariff reductions that commonly result in foreign country exports undercutting domestically produced goods, known as dumping, lower the price of farmers’ produce. This forces subsistence farmers switch to producing cash crops for export undermining the sovereignty of these farmers.
Limits to the amount of domestic subsidy support that can be offered to farmers. Yet agriculture and commodities in large industrial blocks such as the US and EU remain heavily subsidised and hence enabling cheap goods to flood local markets.
FTAs therefore act directly in the face of national sovereignty, limiting a nation’s capacity to respond to domestic challenges in food and farming.
Wealth Generated by Freer Trade Does Not Benefit Peasants and Workers
The conventional economic narrative is that removing barriers to trade, through FTAs, stimulates international investment in a country, such that the country can develop economically. However without strong legal, political and social institutions in a country there is no way to ensure that any gains from these investments are shared amongst citizens (2). Thus flows of international investment become mechanisms for exploitation of workers in global south countries for the direct benefit of investors and listed companies.
FTAs undermine efforts to mitigate climate change
Beyond these immediate impacts, FTA’s will also penalise the world’s farmers, workers and peasants through their likely environmental impacts. Around the world FTAs are designed to aid the extraction of commodities and the development of industrial farming practices, through enabling investment and simplifying export. Developing such industries flies directly in the face of international agreements on reduction of GHG emitting industries. The current international agreements to mitigate climate change, stemming from the COP21 Paris Agreement, depend on voluntary agreements (INDCs – Intended Nationally Determined Contributions). Legally binding free trade agreements trump voluntary INDCs when mutually conflicting interests arise. As climate change impacts global south countries and particularly agricultural economies far more than global north economies, again it is clear that the far reaching impacts of FTAs penalise the world’s farmers, workers and peasants.
Around the world, workers, peasants and farmers gain little from trade liberalisation and the policies of the WTO, yet they have everything to lose both now and into the future. That is why La Via Campesina mark September 10th to “call upon member organisations, allies and social movements around the world to mobilise against the neoliberal agenda of the WTO which promotes corporate power over humanity. We must continue to struggle to build a world based on food sovereignty.” (3)
Who was Farmer Lee Kyung Hae?
Farmer Lee Kyung Hae founded a cooperative and farmers’ association in Korea, served as a state legislator, and had been recognized by the government of Korea and by the United Nations as an outstanding farmer. Yet he lost his land, as did millions of other Korean farmers, after his government signed the General Agreement of Tariffs and Trade (GATT) in 1992, the predecessor of the WTO.
His worlds are just equally relevant today:
“My warning goes out to all citizens that human beings are in an endangered situation. That uncontrolled multinational corporations and a small number of big WTO Members are leading an undesirable globalization that is inhumane, environmentally degrading, farmer-killing, and undemocratic. It should be stopped immediately. Otherwise the false logic of neoliberalism will wipe out the diversity of global agriculture and be disastrous to all human beings.” (3)
(1) Bilaterals.org: The Climate Cost of Free Trade – http://bilaterals.org/?the-climate-cost-of-free-trade
(2) Dani Rodrick THE GLOBALIZATION PARADOX 2011
(3) Via Campesina: https://www.viacampesina.org/en/index.php/actions-and-events-mainmenu-26/10-years-of-wto-is-enough-mainmenu-35/2137-ttip-stalls-wto-and-ftas-must-fall-press-release-international-day-against-wto-and-ftas