Chalk Up Another Victory for "Free Trade"

Weekend Edition June 14-16, 2013
Chalk Up Another Victory for "Free Trade"
Mining Companies Sue El Salvador
by NICK ALEXANDROV

The revolutionary Salvadoran writer Roque Dalton once remarked, in his poem “OAS,” that “the President of the United States is more president of my country than the president of my country,” an observation still accurate today, some 45 years after Dalton penned those words. His life, like those of well over 100,000 Salvadorans in the 20th century, ended violently. But if assassins hadn’t gunned him down in 1975, he would no doubt agree that North American businessmen should be added to the list of outsiders running his homeland’s affairs.

Consider the cases of Pacific Rim, headquartered in Vancouver, and Milwaukee-based Commerce Group. These companies claim that El Salvador, by refusing to grant them mining permits given their miserable environmental records, is violating their rights, and consequently “are suing the Salvadoran government for more than $400m,” Meera Karunananthan writes in the Guardian. The situation calls to mind the late 1940s, when banana executives alleged the Guatemalan government, later toppled in the ’54 coup, was discriminating against United Fruit; perhaps some enterprising grad student will one day produce a study of the stirring, decades-long struggle for corporate liberties. Throughout modern history, these “rights” have been promoted by what are called “free trade agreements,” though hardly worthy of the name, as a quick review of the relevant—thus suppressed and little-known—history reveals.

When the Spanish Empire was attempting to restore its power via the 18th-century Bourbon Reforms, for example, it adopted a policy of comercio libre y protegido—“free trade under the protection of the state.” Comercio libre shut down textile production centers in Peru and New Spain, freeing their Catalonian counterparts from the burden of competition, in the same way that the 1825 Anglo-Argentine Treaty of Friendship, Commerce and Navigation guaranteed Argentina would serve as a market for British industrial goods, while exporting meats and grains—its “comparative advantage,” in the mythmaking that too often passes for scholarship. In this world, we see that the treaty “devastated local manufacturing” in Argentina, and more broadly “ensured that England, owing to its greater power over all possible competitors, would maintain an essentially mercantilist relationship with Buenos Aires.”

These comments, from Nicolas Shumway’s The Invention of Argentina, are much to the point, and worth bearing in mind when we consider how Commerce Group and Pacific Rim laid out their cases against El Salvador—specifically, by citing protections the Central American Free Trade Agreement (CAFTA-DR) affords investors. “The broad scope of protection is reflected throughout CAFTA Chapter 10,” the law firm Crowell & Moring explains in a document prepared for Pacific Rim, noting that one of “CAFTA’s objectives” is to “substantially increase investment opportunities in the territories of the Parties.” Crowell & Moring’s pedigree is distinguished: “The firm represents some of the toughest defense contractors in the world,” according to a glowing Legal Times profile, “the kinds of companies that send anti-war bloggers into a frothing rage”—what was then Blackwater USA (later Xe, currently Academi), to name one.

More:
http://www.counterpunch.org/2013/06/14/mining-companies-sue-el-salvador/