Cocaine and free trade

The war on drugs, trade policy and Latin America's "turn to the left."

Published June 22, 2006 7:36PM (EDT)

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 Chávez and Evo 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 Chávez with the most disadvantaged sectors of society in their country. Some try to explain it by claiming that, in the case of Venezuela, Chávez 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.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works Latin America