Before I started a Master's in Development Studies, I was already interested in questions about development and mused frequently about them on this blog. After one-and-a-half semesters of fairly intensive studying and reading, it's interesting to look back at how my understanding and views have changed.
In deleting some emails, I came across a mini-rant (pasted below in italics) I'd sent to my US-based sister about the trade deals with Peru, Panama and Colombia, which were at the time a topic of discussion in both the mainstream and grassroots media there.
These were my thoughts a year ago:
I am on balance a supporter of the FTA for Peru because of the commercial opportunities it offers. However, a rudimentary examination of the existing agreement demonstrates that Peru, Panama and Colombia are being forced to suck eggs in order to get their deals. The US has been using its weight in the bilateral negotiations to impose conditions it can't get through the WTO (esp. with regard to intellectual property). This has little to do with the appropriateness or plausibility of these conditions for the country (US-standard copyright protection in Peru within 3 years, yeah right) but rather with a wider agenda.
I reckon if the US really wants to support development in the Andean countries, it should do the following:
1. offer unilateral tariff reductions on all products for a 10--15 year period (similar to the Andean Trade Promotion and Drug Eradication Act, but with more certainty)
2. trade partners required to move towards international/WTO standards on labour, environment and intellectual property (i.e. NOT US-level standards for the latter); milestones to be met to ensure continuation of tariff-free access after 5 and 10-year review periods
3. reduce or freeze direct-to-government aid (including export subsidies disguised as aid), but offer technical assistance especially in local government, law enforcement, education, infrastructure development, agricultural productivity, distribution, marketing, etc. Foment partnerships between schools, universities, police departments, public service, small NGOs, churches, etc. Loans available for insfastructure conditional on robust analysis of the viability of the project.
4. trade partners remove or reduce tariffs on all or most non-agricultural products; non-complementary agricultural products to be left alone for the first 5 years
5. investment protections in place but trade partners allowed to place 'development' conditions such as use of local products or technology transfer
6. legalize cocaine, but slap on big import and sales taxes; coca leaves can be imported tariff-free
The last one is only partly in jest. At present, cocaine is one processed, added-value product that is highly profitable and makes its way easily into US markets (despite all attempts at law enforcement). It's also inevitably associated with significant violence and corruption. What needs to happen is the opposite of the historical: developing countries have a chance to produce and market added-value, mainstream products, while drug-related activity is disincentivised through making it uncompetitive. Such an approach would see all the cocaine labs move inside the US, where their activity would be tightly regulated by ATF officers...). Meanwile, Peru, Bolivia, and Colombia would fill US health food stores with a range of coca teas, sweets, oils, and essences. Groups like the FARC, Shining Path (now moprhing into narcotrafficking operations in Peru), paramilitaries lose their funding and much raison d'etre, either disappearing or being forced to become normal political entities.
Many weighty articles and long perambulations through the thickets of economic history, sociology and politics, I've become much better informed, feel more able to engage in debate, but my views are not a million miles away from what they were then.
Overall, I'm even less sure about the net benefit of the US-Peru trade agreement than I was, in part because I've been made aware that the link between overall economic growth and benefit for the majority is even more tenuous than I realised; in part because of gaining a greater understanding of just how one-sided and hypocritical the conditions in the trade agreements are (and how few of them are even about trade).
As I've learnt recently, suggestion 3 above is just a partial version of what's been on the agenda for international donors for a while through the 'good governance' agenda and the OECD's Paris Declaration on aid effectiveness. There's been a commitment to phasing out 'tied aid' (i.e. exports subsidies disguised as aid) and 'technical assistance' is a major buzz phrase in the aid community (along with its sibling 'capability development'). However, this does still seem to suffer from the longstanding high-handedness of development assistance, and mainly be aimed at bureaucratic elites.
If we do care about 'institutions', a nice alternative approach would be for some kind of properly-funded 'adult exchange programme', where the likes of police officers, petty officials, local council members, etc from developing countries could spend a three-month sabbatical in the equivalent department in a rich country -- and vice versa.
Suggestion 6 is of course mostly flippant, but I'd still be interested in people's reaction to it. The drug trade is not a good thing -- but at the end of the day it's just another manifestation of the inexorable market logic that is elsewhere trumpeted as the solution to everyone's problems. It's rarely mentioned even by liberal commentators, but there's little that's more perverse than a social problem in the rich world being tackled by spraying poison all over environmentally fragile land in a much poorer country.
Categories: development, Latin America, trade, cocaine, coca, Peru, Bolivia, Colombia