Here’s an interesting guy: Robert B. Zoellick, the U.S. Trade Representative, confirmed by the Senate in a unanimous vote on February 6, 2001, less than three weeks after W. himself was sworn in. The dispatch with which Mr. Zoellick was nominated and confirmed makes clear that the Bush administration holds him in high regard and trusts him to carry the corporate flag. The speedy confirmation also makes clear that W. attaches great importance to pending trade agreements, particularly the one that takes in our hemisphere: the Free Trade Area of the Americas (FTAA). If approved, the FTAA will create a kind of imitation European Union, without any of the restrictions that protect humanity’s more precious properties, like labor, air and water.
The designation of the Americas as a “Free Trade Area” misrepresents the issue right off the bat. The FTAA is as much–if not more–concerned with international investment as it is with international trade. You may have noticed, as we enter the new millennium, that we find metric tons of high -velocity money careening around the globe in search of the cheapest labor and the fewest “rigidities” (a.k.a. minimum standards of basic human conduct). Why invest your capital in places encumbered by burdensome restrictions on child labor and air pollution, when you can make so much more money exploiting twelve-year old girls subsisting in smoking garbage dumps? Why pay salaries so high that they support sprawling U.S. suburbs, when you can pay wages sufficient only to finance miserable Third World shantytowns instead?
Mr. Zoellick, a highly skilled professional, is W’s choice to shepherd this appealing mercantile policy through the international negotiation process. He has outstanding credentials (Swarthmore, Harvard, Goldman Sachs, Enron) and as expected, he has been working fast and hard in a single direction. Both the principles and the details of the FTAA text reflect the cheap, mean profit-seeking interests of the Big Bucks Boys, both here and abroad. Just wait; you’ll see.
Conveniently, Mr. Zoellick is one of those Boys, and he has had some interesting investment positions of his own. At the time he was confirmed, he was a Senior International Advisor to Goldman Sachs, the giant Wall Street securities firm. He also served on the Advisory Board of Enron, a company with larger assets than most Central American nations, and on the board of Viventures/Vivendi Universal. This last position represented a tidy convergence of interests for Mr. Trade Rep. Vivendi is a major multinational company benefitting hugely from the privatization of public services pushed by the World Bank and the International Monetary Fund, and it is in line to do even better should the free trade areas expand. In very simple terms, Vivendi and its subsidiaries buy up formerly-public communications systems and water companies and raise rates around the world. Despite much progress, some lingering prohibitions on a multinational’s right to own the basic infrastructure of an entire country still stand in Vivendi’s way in a few backward spots around the globe. But in the Americas, if Mr. Zoellick gets his way, the FTAA will fix this.
Mr. Zoellick is a many-faceted individual and he’s therefore a techie, too. He worked with Viventures, a venture capital fund created by Vivendi to provide financing for telecommunications and internet businesses that prey on privatizing telephone systems in poor countries. As of January 2001, Zoellick was also an associate of SAID Holdings, a South African-based communications security firm, chartered in Bermuda. It defends intellectual property rights (e.g. patents and copyrights, especially those tenuously held by U.S. companies in foreign countries) and fights internet piracy and computer crime, but we don’t know much more than that. Curiously, although SAID Holdings is itself an internet company, it has no website of its own anymore. It did have one, but just recently it disappeared. Poof!
But even if Mr. Zoellick’s own anti-piracy company is lying low, he himself is still out fighting computer crime and defending other vital intellectual property rights of concern to Vivendi and SAID. Intellectual property rights are a big deal with him. After all, it’s not worthwhile investing in a backward country if (a) you can’t rip off local expertise, genetic material and lore and copyright/patent it as your own or (b) the natives might actually be able to use some of your imported wisdom for their own purposes. Mr. Zoellick is on top of this, though.
In April of this year, he identified Costa Rica as a country for the US Trade Representative’s “Watch List.” Costa Rica, in his view, does not adequately protect and respect intellectual property rights. Once “identified,” a country could face U.S. trade sanctions if changes are not made that address Mr. Zoellick’s concerns. This was Big Bucks bullying at its best. Costa Rica had already revised its copyright and patent laws to allow its plants, animals, biological and microbiological processes and products to be patented by foreign companies, in keeping with U.S. demands. Recently, however, Costa Rica de-criminalized copyright infringement deemed of “insignificant character” or that was committed “without intention of profit.” This flexibility, in Mr. Zoellick’s view, was intolerably lax.
Quite possibly, Mr. Zoellick has adopted such rigidities about copyrights because of his own affiliations. Just prior to entering the fray to protect U.S. trade interests, Mr. Zoellick served on the board of Alliance Capital, a “leading global investment management firm,” with about $430 billion in assets, and an affiliate of AXA Financial, which is part owner of Vivendi Universal. (Like SAID Holdings, AXA is an awkward subject just now as several board members of one of its more visible subsidiaries are languishing in a French jail on suspicion of tax evasion and money laundering.)
Notice the impressive geographical breadth of Mr. Zoellick’s interests and investments: South Africa, France, Bermuda, and the Vivendi Universe. And yet he (and his boss, W.) presents his positions on international investment and trade as if they represented the United States. Even his job is named that: U.S. Trade Representative. He would have us believe that he negotiates on behalf of you and me, rather than Goldman Sachs and Enron, though in fact your interests have rarely coincided less with those of the multinationals than they do right now, after a decade of unabated exporting of jobs and investment from Mr. Zoellick’s home country.
The enormous conglomerates he represents would have us all believe this too. For example, the folksy ungrammatical motto of AXA is “Think global, act local,” as if the zillion-dollar company were simply a minor sponsor in the Adopt-A-Highway program. Actually, it’s too bad that the community organizing groups who originally thought up this slogan forgot to copyright it, or they could sue AXA right now for damages claiming theft of intellectual property. There is absolutely nothing these types will not steal.
As a matter of fact, Mr. Zoellick and his breed have a curious view of property rights and theft. Without implying any conflict of interest, it is arresting to note how the terms of the FTAA conform to the policies advocated by Viventures, Goldman Sachs, Vivendi, Alliance Capital, and Enron. Let’s take a quick look, shall we?
First, in the investment chapter, there’s the “Investor-State” provision. This clause would allow foreign firms to sue a government for money they might have made if not prevented from doing so by some pesky national regulation. For example, if Enron wants to pipe gas through nationally-protected wetlands, under FTAA, it is Enron that is protected rather than the wetlands.
Next comes the part about “Expropriation.” A government is guilty of expropriation and must compensate a foreign firm if it takes any action that might diminish a company’s profits say, for example, requiring it to retrofit a plant with safety equipment in order to reduce the number of employees incinerated annually.
Then there’s the bit on “Capital Controls.” There should not be any. In other words, governments should not restrict capital from moving in any volume at any speed in and out of a national economy. When this provision goes into effect, we can all look forward to financial crises that spread with the speed of measles, as capital floods out of any economy badly trashed in an internet chat room on a slow afternoon.
The piece about “National Treatment” is also harrowing. Govern-ments will have to treat foreign companies on the same terms as they treat domestic ones. When Vivendi/France wants to buy out your local cable company and raise the rates, too bad.
Finally there’s the article on “performance requirements.” Under this provision, a government may not use performance measures to pursue national economic or social goals. This means bye-bye to affirmative action, emission standards and flame-retardant children’s pajamas, among other things.
Who thinks up this stuff, we might ask? Whoever it is, they leave no stone unturned. If some guy in Costa Rica is making a few dollars by copying and selling “Who Let the Dogs Out” cassettes, it has got to stop. At the same time, if anyone, anywhere, for any reason neglected to seek copyright protection for anything–their mud plasters, their mobilizing slogans, their DNA–it is fair game for patenting by Vivendi Universal and Mr. Zoellick.
Just think about it. You might wake up some fine morning to discover that your particular hair color belongs to Enron. Don’t think for one minute that you can simply go right on wearing it without paying the new owner hair color royalties. If you do, you will find yourself on Mr. Zoellick’s “Watch List” before you sit down to breakfast. And if U.S trade sanctions don’t scalp you by lunch time, then Vivendi Universal will.
Gabriela Bocagrande covers the hemisphere for the Observer.