‘Free Trade’ Masks Intensifying Exploitation

The term “free trade” is a lie, since it implies that it is only about buying and selling (trade) without hindrance (free). Actually, free trade agreements (FTAs) are a mask to cover exploitative relationships imposed by the more powerful economies on the less powerful — i.e., imperialism. Take, for example, the “United States–Dominican Republic–Central America Free Trade Agreement” (CAFTA-DR). This treaty, like other FTAs, contains malignant elements that are hidden under the benign-sounding title. 

CAFTA-DR prohibits any Central American country from opposing an attempt by a U.S. business to set up a subsidiary within its borders, so long as the business meets certain requirements. And if a member country objects that those requirements have not, in fact, been met, that country can be sued by the U.S. business at the World Bank. In 1965 the World Bank set up its International Centre for Settlement of Investment Disputes (ICSID) for just that purpose, with the participation of almost 150 countries from around the world.

Thus Pacific Rim, a mining company, has staked a claim in El Salvador to extract gold. The company claims that its plan will preserve the environment, including the nearby river Rio Lempa. Rio Lempa is the source of livelihood for many Salvadorans, through farming and fishing. The workers in these industries have been fighting against Pacific Rim for some time now, knowing full well that the many poisonous chemicals used in mining will pollute and destroy their river. Indeed the workers have formed organizations and put so much pressure on the Salvadoran government that so far it has refused Pacific Rim’s permit to mine the gold. As a result of their resistance, a number of workers in these organizations have been threatened with death or actually murdered.

Under capitalism the laws are designed to protect the bosses and their system. Thus, Pacific Rim and the U.S.-based Commerce Group are suing the El Salvadoran government in the ICSID for lost profit.

Commerce Group has already polluted the San Sebastian River with aluminum, zinc, iron, manganese, and nickel, among other toxic metals. One study found that these toxic elements produce weakness, fatigue, rashes, and mental confusion in 60% of the local population, with women and children most affected.

But Pacific Rim and Commerce Group are not in business to care about the health of the local working classes. Rather they are in business for one thing only — profit — and health problems are not their concern.

Furthermore the rules of the ICSID do not even permit it to consider environmental or health problems, but rather only narrowly defined investment issues. It is likely therefore that it will grant Pacific Rim and Commerce Group the $100 million they each seek from the Salvadoran government, as compensation for their lost profits. Thus does imperialism illustrate the power of the strong over the weak, but only when the weak fight by themselves, separated from the rest of the world’s working class. When workers around the world unite in one powerful force under the leadership of PLP, such struggles can not only be won, but can be transformed into revolution by putting a complete end to capitalism and its current manifestation of imperialism. Join us.