The impact of the APEC forum will provide Hawaii’s business and finance community with some economic gains, but it will do so at the expense of long-term environmental consequences while furthering economic disparities.
Behind the friendly appearance of its website and the call for a welcoming committee to form the lei of aloha, it is important to understand who APEC is and what these new investment agreements mean for our future. There will be many people gathering to protest the APEC forum, many of them representing the millions of people who have been negatively impacted by APEC, and it is important to understand why the U.S. host country has put on an aloha shirt to say, “E komo mai.”
WHO IS APEC?
Currently, APEC is a 21-nation club of primarily industrialized or emerging economies. It was conceived in 1989, just as free-market deregulations and trade liberalizations were fostering economic advantages to industrialized nations — and it began at a time when we began to see a greater consolidation of corporate power across nations, creating international legally binding policies that asserted less government regulations by weakening the labor force and dismantling environmental protections.
ARE PACIFIC ISLANDS PART OF APEC?
It is important to note that besides New Zealand and Papua/New Guinea, there is a noticeable absence of Pacific Island countries in this Asia Pacific Economic Cooperation. The smaller, politically independent Pacific Islands are represented by the Pacific Island Forum, a non-voting member, while Hawaii, Tahiti, Rapanui, West Papua, Guam and American Samoa are still under various forms of occupation and/or colonial administration.
The Pacific Islands are an important and resource rich region of the global economy, and the fact that a single inter-governmental organization, like the Pacific Island Forum/Secretariat represents the Pacific Islands to APEC simply does not reflect the best interest of the people, the environment, or the overall biodiversity of our region.
Besides the Pacific Island Forum, there are two other official observer organizations, PECC, the Pacific Economic Cooperation Council, the only official NGO observer of APEC, which is a business/government think tank; and ASEAN, the Association of S.E. Asian Nations.
APEC, EU, NAFTA, WTO
Now just to give APEC some context: in 1993 when APEC held its first meeting, it was also the same year the Maastricht Treaty was signed, officially creating the European Union, which standardized a supra-national system of trade laws which applied to all the member-states, and then eventually created their single currency. A year later in 1994, the North American Free-Trade Agreement (NAFTA) was signed between Canada, Mexico and the US, and in 1995, the World Trade Organization was established.
APEC, like NAFTA and the EU, was established under a shroud of U.S. led free-market/free-trade principles, which went to benefit large corporations, banking and financial institutions, key stakeholders in both government and private sectors. These government deregulations and trade liberalizations policies were otherwise known as neo-liberalism.
The foundation of this belief asserted that the market was the grand democratizer and if businesses were allowed to flourish without government regulations and fewer tax burdens, then this “free-market” would be able to invest in greater opportunities for the working and middle class. Assumptions were made that corporations were actually concerned about the general welfare of the state, which this financial collapse proved indisputably wrong when we saw that the CEOs of too-big-to-fail industries would sooner abandon the welfare of its people than surrender their golden parachutes.
Neo-liberalism only widened the gap between rich and poor, and pulled the rug out from under the middle class. In its wake, these policies created a series of credit-based financial bubbles that have led us to where we are now — a global economic downturn for the U.S. and its economic partners. To not connect the free-market/free-trade system with the collapse of global financial institutions is like not connecting gravity with the proverbial apple that fell on Newton’s head.
For APEC proponents to insist upon the viability of this economic system, these free market/free-trade adherents might argue that the economic downturn is temporary. Of course, their predictions could very well be realized if indeed — and only if — these free-market/free-trade advocates further liberalize government regulations and exploit all the environmental and human resources it wants. However, even that won’t last long, because as we have seen, particularly in regard to developing economies, this system consumes what it needs and abandons the carcass when it is through.
NAURU AND RESOURCE DEPLETION
For Pacific Islands, we only need to look as far as Nauru to see how the system has failed. On July 18, Marcus Stephen, the president of Nauru, published an appeal in the New York Times op-ed pages where he addresses two sides of a crisis facing Pacific Islands: one on “climate change and security,” and the other on “mining.”
Nauru was a partner to early private/public partnerships in guano mining, and when the resource was exhausted, it left Nauru with few economic alternatives and one of the highest unemployment rates in the world. Stephens writes, “Nauru has begun an intensive program to restore the damage done by mining, and my administration has put environmental sustainability at the center of our policymaking. Making our island whole again will be a long and difficult process, but it is our home and we cannot leave it for another one.” This sentiment is echoed throughout many of the smaller Pacific Island nations.
As we begin to understand what the APEC forum is and why all people, not just Pacific Islanders, advocates and environmentalists need to resist it, arguments of development and aid packages providing for jobs, health benefits, and opportunities surface. It may be legitimate and true to suggest that many Pacific Islands are economically under-developed and are in need of aid and opportunity. But it is also important to understand that many of those investment packages negotiated inside regional forums like APEC are responsible for perpetuating debilitating social and environmental conditions in the first place.
ADB, STRUCTURAL ADJUSTMENT, AUSTERITY MEASURES
ADB, the Asian Development Bank for example, has been a leading donor to Pacific Islands and along with the IMF, development banks promote a kind of loan program to Pacific Island governments, technically called “Structural Adjustment loans.” Structural Adjustment loans are conditional loans provided to countries that open themselves up to the free-market, in other words, receive aid on the condition that governments enact austerity measures that deregulate protections on sectors like labor, energy, water and the environment, creating opportunities for foreign investment to overreach upon the acquisition of labor and resources.
TRANS-PACIFIC PARTNERSHIP AND INVESTMENT AGREEMENTS
These negotiations that take place in APEC, like the Trans Pacific Partnership Agreements or other bilateral or regional free-trade agreements like PICTA (Pacific Island Countries Trade Agreement), exert tremendous influence on smaller nations. One example of how this system exacts profits for its stakeholders, is that transnational corporations franchise industries within regions, the same way fast-food or mini marts are franchised in neighborhoods, and so because countries are led to believe that they need to compete for investment with other countries in the region, governments are often willing to compromise long term environmental security or in some cases, the traditional needs of its people.
Unfortunately, these arrangements are held together by legally binding investment agreements, and the impact of these agreements often alienate peoples from their traditional livelihoods, often jeopardizing food and water security, housing, health, and other economic securities. As a result of labor disputes for example, corporations might demand that governments open their borders for cheaper labor from other countries, destabilizing security and undermining any kind of long-term, meaningful equitable solutions that actually benefits workers and families.
This is a system that rewards consumption while strangling meaningful job creation. There are many alternative and viable economic strategies worth examining, yet it is these entrenched free-market /free-trade advocates that refuse to abandon their stakeholder shares. As if this were not bad enough, there is what are called “Implementing Arrangements” written into trade frameworks or treaty agreements, and these are the investment protections written in to protect investments, which not only include the building and maintenance of infrastructure, but security as well.
How this is justified in the eyes of the investment regimes is that these investment agreements are heard in the supra-national WTO court in Geneva and these courts generally rule in favor of the agreement. Locally, these conflicts can take a long time to resolve and sometimes stop production. Investments in large-scale mining or port projects require tremendous coordination and commitments of support by equity stakeholders, even though these investments often displace peoples and destroy environments as is the case in the current mining development in West Papua. Investment regimes require these implementing arrangements to protect the investors, and if disputes cannot be resolved, then military or private military contractors may intercede on behalf of the corporations. In the case of West Papua, it is the Indonesian army that is brutalizing our Pacific Island brothers.
Locally, when there are disputes between tenants and landlords for example, this dispute may be heard in a local court and landlords could be fined, or new laws could be legislated. There is a semblance of accountability. International trade or investment disputes take place in foreign courts, behind closed doors, and often result in massive settlements that are disadvantageous to smaller countries. Also, now as a result of these new U.S. led Free-Trade agreements, of which the Trans-Pacific Strategic and Economic Partnership Agreement (TPPA) represents, it makes it easier for corporations to sue governments.
As this system evolves, it is the transnational corporation who gains the greater power.
Addressing many of these points, an alternative conference called Moana Nui has been planned for Nov. 9-11. Comprised of some of the world’s leading international experts and Pacific-wide advocates and practitioners, Moana Nui seeks a saner and more equitable solution for organizing our labor and environmental resources. Find out more at http://moananui2011.org or find us on Facebook.
About the author: Arnie Saiki is the coordinator for the upcoming Moana Nui 2011 conference and on the planning board of Pua Mohala I Ka Po, who in partnership with the International Forum on Globalization is planning Moana Nui. He is also the director of ImiPono Projects/Statehood Hawaii, promoting ongoing public dialogue concerning policy issues specific to Hawaii.