Ring of Fire (9/22/05)

The old conference hall on the second floor of the cheap hotel in downtown Quito is packed with representatives from Ecuador’s indigenous groups. There is a hum of muffled conversation and the smell of wood smoke fills the room and clings to their worn ponchos as they await the arrival of the country’s Trade Minister, Yvonne Baki. She’s come to explain the advantages of a new proposed free trade deal between the Andean nations and the United States.

A member of Ecuador’s euro-élite, Minister Baki has been the country’s ambassador to the US for years and is a big supporter of trade talks with Washington. When she finally saunters into the hall the contrast with her Indian audience couldn’t be starker. She wears a silk blouse and tailored dress pants; her hair is coloured gold. The compact Indian women scattered around the room are garbed in traditional embroidered dress and sport felt hats. Ms Baki’s most recent accomplishments include organizing the Miss Universe pageant in Quito last year. Now she’s known as Miss FTA for her free trade boosterism.

Minister Baki tells her listeners that globalization cannot be stopped. You either ‘get on the train,’ she says, ‘or you get left behind.’ The Andean Free Trade Agreement can benefit both big business and small farmers in Ecuador, she stresses. But the small-scale farmer must get into the negotiation process because ‘it’s the rural sector that’s most vulnerable’.

‘Who will we trade with if not the US?’ she asks. ‘Brazil, Chile, Peru? We have a trade deficit with each of those. The US is the largest market in the region and must import food to feed its population. We must get in there and get the best agreements possible.’ If not, she adds, other countries will cut better deals and Ecuador will be left behind.
She hardly finishes her present-ation before she is bombarded with questions from the floor. The people in the room are all members of FENOCIN – the Federation of Indigenous, Afro-Ecuadorian and Small-scale Farmer Organizations. Of Ecuador’s 13 million people, 43 per cent are indigenous.

‘How can a negotiating team made up of bureaucrats and business people possibly represent the small-scale farmers and the rural sector?’ says one Afro-Ecuadorian leader.

‘What will the Government do to provide technical and economic assistance to the rural sector to create an even playing field in order to trade with the US?’ asks an NGO representative.

Then from a far corner of the room a mestizo woman loudly interrupts: ‘Why are we allowing the US to set the terms? How is Ecuador’s unique reality involved in these talks?’

After two days of talks FENOCIN decided not to board Baki’s FTA train – at least for the moment. Instead the indigenous group requested that negotiations be stopped ‘until the rural sector can truly participate’. They also demanded a new negotiating team to include representatives from groups most affected by free trade – small-scale farmers, small family-based businesses and artisans.


Some 1,500 kilometres to the south, Bolivia shares the same Andean mountain chain with Ecuador. Indigenous people here are also wary of the proposed FTA. Along with other members of the country’s poor majority, they have taken to the streets to protest privatization of Bolivian industry and to gain a voice in the economic processes that affect them. Nearly 5 million of the country’s 8.3 million people live in poverty, most of them Indians. This despite the fact that Bolivia possesses the second largest gas deposits in South America.

The indigenous community in Bolivia has been demanding self-government for years and much of the arid, windswept plain called the altiplano is under the sway of native leaders. Felipe Quispe, the Aymara leader of the country’s main peasant organization, emphasizes that self-determination ‘is the only way we can have our own laws and our own territory’.1 The Aymara make up nearly a quarter of the country’s population.

Government repression intensified in 1998 with the US-funded coca eradication programme, Plan Dignidad. The plan forced the Bolivian military into direct conflict with coca growers who were defending their primary source of income. Human rights violations soared as US-trained and equipped soldiers fired against cocalero protesters.Efforts to replace coca with exotic exports like pineapple, passion fruit and hearts of palm met with generally disastrous results. After years of trying to grow alternatives, campesinos are more doubtful than ever. Says farmer Carlos Huanca from the Chapare region: ‘The experts told us we would make money as soon as Argentineans learn to like plantains. But two years have gone by and we are still hungry. We tried to export the crop ourselves and now our community has a debt we can’t pay. We don’t know how we are going to feed our children.’

The plunder of Bolivia’s resource wealth began in the mid-1500s when the Spanish, using forced Indian labour, extracted a fortune in silver from the mountain known as cerro rico, just outside the colonial city of Potosi. The pattern continues to this day – with growing resistance.

In April 2000, citizens in Cochabamba, the country’s third largest city, took to the streets to protest the sale of the city’s water company to Bechtel Corporation with strong pressure from the World Bank. The takeover doubled and even tripled the average water bill, leaving many families unable to buy groceries. A week of sustained protests forced the company to withdraw from the deal. Four years later Bechtel is pursuing legal action against the nation: the corporation claims it lost $25 million in Bolivia. A closed World Bank trade court is hearing the case – a clear conflict of interest given the Bank’s enthusiastic endorsement of the original deal.

Then in October 2003, when President Gonzalo Sánchez de Lozada pushed ahead to export Bolivian natural gas to California through a Chilean port, the country exploded. Campesinos, trade unionists and Aymara Indians in the altiplano city of El Alto led the uprising. At first the protest was peaceful. Then Sánchez de Lozada called in the army: 59 mostly unarmed protesters were killed and hundreds more injured. A wave of public anger eventually drove him into exile in the US.

His Vice-President, Carlos Mesa, inherited a country that was tired of being left out of the decision-making process and actively opposed to a resource-dependent economy in which ordinary citizens have no voice. This included an already active opposition to the Free Trade Area of the Americas (FTAA) and regional agreements like the Andean FTA.

The new President also inherited an empty treasury and an overwhelming dependence on American aid – around $150 million in 2004 – making him an easy target for sharp-eyed US trade negotiators. Tom Kruse, a Bolivia-based analyst with the Center for Labor, Agrarian and Development Issues, says the free trade agreement is not designed to benefit either Bolivia or Ecuador. ‘People who think this is about development are sorely mistaken. These deals are all about giving US corporations everything they’ve asked for.’

Kruse also points out that, like NAFTA, the Andean agreement would severely restrict national sovereignty – opening the way to complete control of the country’s resource wealth by foreign corporations.

Analysts like Kruse are not alone. Indian and campesino federations in both Bolivia and Ecuador have been meeting since 2002 to discuss how to change government policy to create markets for their goods. Graciela Choque, an indigenous leader from Bolivia’s Jacha’Qarangas province, explains: ‘With the FTA we would go back to being what we were before, pongos [indentured servants] to the new oligarchy of North America. We know we can’t compete; all we have are raw materials and no money to process them. They’ve already taken our silver, our tin and now they want our gas. It won’t bring anything good to the rural areas; that’s why we protest against the FTA.’

Negotiators have suggested that by joining forces Andean farmers could grow crops which the US does not produce on a large scale. However, looking at the impact of NAFTA in Mexico, farmers and activists have grave doubts. Says Choque: ‘Before, Mexicans grew their own corn; now they have to get it from the US at the US price.’ The worry is that food security could be threatened if single export crops displace traditional food crops, especially with the introduction of genetically modified seeds which must be bought each year.

The key question for countries like Bolivia and Ecuador is their ability to compete in a cut-throat global economy. Instead of throwing the doors open to foreign capital, critics says the priority should be to strengthen national development policies first. Many Bolivians and Ecuadorians would prefer not to catch the free trade train at all, but instead lay down a new track going in a different direction – one which is forged from a true democratic consensus.

Kathryn Ledebur is director of the Andean Information Network (AIN) in Cochabamba, Bolivia. Sandra Edwards is a consultant who lives and works in Ecuador. This article was originally published in The New Internationalist