Negotiating Trade Participation, Transparency, Representation, and the Mobilization of Resistance in Ecuador

This thesis analyzes the Andean Free Trade Agreement, for which negotiations began in May 2004 between the United States, Colombia, Ecuador and Peru and proposes the need to thoroughly i

byAndrea Marisa Samulon

A thesis submitted

in partial fulfillment of the requirements

for the degree of Master of Science (Natural Resources and Environment)

in the University of Michigan

December 2006

Thesis Committee:

Professor Ivette Perfecto, Chair

This thesis analyzes the Andean Free Trade Agreement, for which negotiations began in May

2004 between the United States, Colombia, Ecuador and Peru and proposes the need to thoroughly interrogate the negotiation process Based on in-depth interviews, primary sourcedata, and participant observation, I make the assertion that it is urgent to consider the process

by which the trade agreement is negotiated, before engaging in an ideological debate about its potential outcomes From the outset, the negotiation process of the Andean Free Trade Agreement (AFTA) has been contested by a broad range of social actors in Ecuador for its non-transparency, and inadequacy in facilitating the participation of civil society The

Confederation of Indigenous Nationalities of Ecuador (CONAIE) has led the strongest opposition to the negotiation of the Andean Free Trade Agreement in Ecuador CONAIE,

alongside campesino and civil society organizations insist that there have been no legitimate

opportunities built into the process to voice their concerns for the way in which the

negotiations are being transacted, let alone analyze or criticize specific provisions contained within the proposed agreement A broad cross-section of critics of the trade negotiation process have also called into question the capacity of the current government to adequately represent the majority The Ecuadorean government makes the claim that they are dedicated

to transparency and broad participation of all members of society in the negotiations My research indicates that this negotiation further excludes Indigenous people and historically marginalized groups within Ecuador, yet has simultaneously catalyzed momentum to their struggle against neoliberalism and free trade

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The gratitude that I owe spans far back in time, before the research for this project ever began Chance meetings, a multitude of experiences, and many different people are the foundation of where I am today, and the inspiration for my work Professor Steve Gliessamn

at UC Santa Cruz is one of the most dedicated and talented teachers I have ever known My introduction to Agroecology by one of its foremost thinkers and doers changed my life forever, and my academic path Thank you In 1999, I went to Matagalpa, Nicaragua and had one of the more formative experiences of my life working with small-scale, resource poor coffee farmers It became clearer that struggles for land were directly linked to

struggles for livelihood, and the local was inextricably connected to the global I am touchedforever by the friendship, love and lessons learned from the Blandon, Hererra, Escobar and Bravo families

I am grateful for the opportunity to have conducted field work for my masters thesis

My research in Ecuador was made possible by generous grants from the Rackham School of Graduate Studies at University of Michigan as well as the School of Natural Resources and Environment at University of Michigan Several key people facilitated my research while in Ecuador The talented and bold journalist, Harrie Derks, is a generous and kind friend who gave me the opportunity to accompany him on some important interviews in Quito, includingthe meeting of the Andean Community His entire family welcomed me into their home as if

I was one of their own Edwar Vargas Araujo, a human rights attorney for the Indigenous movement in Ecuador was incredibly generous with his time and knowledge He patiently provided me important background and analysis about free trade, human rights, and the Indigenous movement in Ecuador I am thankful to Edwar and Julio for inviting me and being my guides to the Cayambe and Cangahua Inti Raymi festivals In summer 2005, I received the shocking and sad news that Jairo Rolong was killed in a tragic bus accident in the north of Ecuador Without Jairo, and our serendipitous meeting in Quito, this thesis would be incomplete He gave me trust and invited me to an important meeting of the

Continental Campaign Against ALCA, and facilitated my meeting leaders of the

Confederation of Indigenous Nationalities of Ecuador Jairo was a journalist, and media and communications specialist for many popular organizations in Ecuador, particular Ecuarunari

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me (a social scientist) into a lab that I was honored and proud to have been a part of For her support of my research, and vast knowledge of global food politics, trade, and Latin America,

I am grateful I am most grateful for her incredible patience

Finally, my entire family has provided me immeasurable love and guidance But, my mother and father’s unending support for my dreams, and aspirations, and the sacrifices they made to provide for their children, created the opportunities that I have today I know that

my dreams are built upon your hard work

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To my four grandparents—heroes and survivors in every sense of the word Your inspiration guides me every day.

The struggle to create a just and equitable world proceeds forward from all corners of the earth Yet unnamed, and still taking shape, I dedicate this work to the ongoing process, and final outcome

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Abstract p ii

Chapter

2 Historical Background & Theoretical Framework p 19

4 The Confederation of Indigenous Nationalities of Ecuador p 75

5 Association of Cattle Ranchers of the Highlands and Amazon p 90

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I went to Ecuador in May of 2004 expecting to carry out research that would help me understand the potential impacts of a free trade agreement on the country’s agrarian sector, the indigenous population, and the social resistance that had manifested in the face of

recently initiated negotiations for the Andean Free Trade Agreement (AFTA) After a short time, and a number of conversations it became clear that I would not be investigating the pending trade agreement’s hypothetical impacts The looming and immediate concern among those I spoke with in Ecuador, including University professors, small scale farmers, activists, average citizens, and people affiliated with the Confederation of Indigenous

Nationalities of Ecuador (CONAIE), was not the future impact of the trade agreement, but rather the way in which it was being negotiated In other words, people expressed that it was the very process of the negotiation that needed to be interrogated, assessed, and questioned

A combination of factors, including closed-door negotiations, inadequate representation of allsectors of Ecuadorian society at the negotiating table, and the assertion by the United States trade representative that all rounds of the negotiations must be kept secret, had coalesced into

a process that many citizens in Ecuador did not deem legitimate

For three months in the summer of 2004, between May and August, I did field work aimed at documenting various social actors’ perspectives on the Andean Free Trade

Agreement, including who they thought might benefit and who might not from such an agreement I was also interested in how much people knew about the negotiations, and the pending outcomes The government described this agreement as the only right step for Ecuador, yet how much did the average person know about it? I learned very quickly that there was a general awareness of the AFTA, but its specific content was secret, being kept private by those sitting at the negotiating table I began to wonder what the connection was between the general exclusion of the public from the negotiations and the social resistance that had formed against AFTA in Ecuador; who comprised this movement in opposition to it?And, how much did the perception of secrecy motivate the resistance?

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Research Methods:

To begin addressing these questions, particularly how people in Ecuador interpreted the free trade agreement and negotiations, I conducted fifty-four interviews with actors representing a broad cross-section of Ecuadorean society Between May and August of 2004,

I completed a series of 12 structured open-ended interviews, co-led a discussion group with

an adult education teacher and administered a survey to a group of 22 self identified,

Indigenous small-scale farmers aimed at understanding their views on free trade and

agriculture, and interviewed 20 random people during a street protest I also participated in

several conferences and workshops at Universidad Andina Simon Bolivar, and at the

Facultad Latinoamericana de Ciencias Sociales (FLACSO), in Quito, primarily on the topic

of the Andean Free Trade Agreement My interviews were mostly conducted in Quito, but the discussion group and survey of the Indigenous farmers took place in Cayambe, a small town approximately three hours north of Quito in the highlands surrounded by flower

plantations and farms

I chose to focus large sections of my interviews on the relationship between the free trade agreement, the agrarian sector, and the Indigenous population in Ecuador Therefore, I made an effort to speak with, and obtain interviews from people who had some type of expertknowledge in agrarian economy, an affiliation with farmers’ organizations and Indigenous organizations, or were farmers themselves Many of my contacts were obtained through the snowball effect, whereby I met one person, who put me in contact with another person, and

so on One possible concern is that this method limits the breadth of perspectives that I am able to capture in my research However, according to H Russell Bernard, “A critical issue

is the degree to which the captured sample is representative of the universe This is difficult ifthe universe is unknown, but Frank and Snidjers (1994) have shown the method is excellent for identifying hidden populations and comparing them to larger ones (Bernard 1998: 705-706).”

I also conducted interviews with a member of the Ecuadorean free trade negotiating team, as well as the U.S embassy economic attaché in Quito, in order to provide the basis for

a comparison of views with those that are not directly involved in promoting the trade

agreement

In addition to seeking out interviews with people who could provide me a certain level of academic expertise related to the agrarian sector in Ecuador, human rights issues as they pertain to trade negotiations, or recent patterns of rural to urban migration, I also wanted

to speak with people involved in some of the social movements that have been actively

opposing the Tratado de Libre Comercio.1 One of the strongest organizations opposing the free trade agreement in Ecuador is the Confederation of Indigenous Nationalities of Ecuador (CONAIE), an umbrella group representing the various Indigenous nationalities throughout the country I was introduced to then president of CONAIE, Leonidas Iza, with whom I conducted a semi-structured, open-ended interview

Campesino organizations in Ecuador have also been vocal opponents of the free trade

negotiations, due to serious concerns regarding the impacts of these policies on the

livelihoods of small-scale farmers CONAIE also shares this concern given the high

percentage of the Indigenous population that derives its livelihood from some type of

agricultural production To get a better understanding of the perspective of non-indigenous small farmers I conducted semi-structured, open-ended interviews with several leaders of the

national farmers organization Confederación Unica Nacional de Afiliados al Seguro Social

Campesino (CONFEUNASSC)

Clearly, not all farmers in Ecuador are small farmers represented by

CONFEUNASSC To get the perspectives of medium and larger farmers and ranchers I

contacted the Associación de Ganaderos de la Sierra y Oriente (AGSO), the national cattle

ranchers’ organization The cattle ranchers association historically represents, and has allegiance to medium and large-scale producers Thus, they represent a different class strata, with different class interests and productive capacity, as those that are considered small-scale

or subsistence producers I was told by a professor of agrarian economy at Universidad Andina Simon Bolivar that they had come out with a strong view on the trade negotiations—neither against nor completely in favor It was important for me to understand the views of this organization in order to further understand the subtleties involved in the relationship between class status, access to power and resources, and perspectives on the trade

negotiations

1 Free Trade Agreement (FTA) is translated into Tratado de Libre Comercio (TLC) in

Spanish I use them interchangeable throughout, as well as the abbreviated forms, FTA and TLC

I was invited to an adult education class in Cayambe where I co-led an informal discussion with 22 small scale, indigenous farmers and administered a written survey about their experience producing crops in Ecuador and their perspective on free trade My friend, Julio, taught weekend classes in a program designed to provide continuing education for Indigenous adults The class recently had a brief discussion on the Free Trade Area of the Americas, and Julio suggested that I come and participate in a discussion about the current

Tratado de Libre Comercio negotiations He asked the class ahead of time if they were

comfortable with a guest, and told the class that I was a researcher interested in talking with them about their perceptions of trade and the impacts on agriculture, as well as giving them a survey I do not make the claim that the 22 written survey responses, or the outcome of the discussion in Cayambe, represent the views of all Indigenous farmers, or Indigenous peoples

in Ecuador However, responses to the written survey corresponded with the platforms of both campesino and Indigenous organizations in Ecuador with respect to the TLC

Interestingly, many of the people in Cayambe stated that they hadn’t been exposed to any particular views on the TLC Although this wasn’t a random sample of all small-scale, Indigenous farmers in Ecuador, it provides some insight into the general concerns and

obstacles that this sector currently faces

Despite the fact that I was a friend of Julio’s, my U.S citizenship raised many

questions, and was a clear cause for distrust when I first entered the classroom After

introductions, I explained my research, and said that I was happy to answer any questions about myself, and my work In a space of distrust for foreigners (especially those from the United States), I think it is important to provide an opportunity for people to question my motivations, and understanding of the issues I do not believe that assuming the guise of totalobjectivity works in this circumstance Instead, I believe that in order to develop a minimal level of trust, it is essential to reveal ones own motivations for their work In this way, I do not remain neutral In Cayambe, when I expressed my interest in a mutual dialogue, and willingness to answer questions, I spent about an hour answering questions about seemingly disparate issues like NAFTA, U.S farm subsidies, the war in Iraq, pesticides and their long-term affects, and my reasons for doing this research It was clear that by making space for such a dialogue, some of the initial distrust was diminished As time went on, more people participated and became involved in the discussion

In Cayambe, just as with the other structured interviews that I conducted, informed consent was obtained prior to initiating the interview process Interviewees were presented with a written consent form, approved by the Institutional Review Board at the University of Michigan, which explained my research, and asked their permission for an interview They could also sign if they gave consent to be tape recorded during the interview In specific situations, when people expressed discomfort with providing signed consent, they instead provided oral consent after reading the form I did not conduct interviews with anybody that was unwilling or unable to provide written or oral consent

In July 2004, during a large protest of the Tratado de Libre Comercio attended by

approximately 10,000 people in Quito, I conducted interviews of passerby’s and observers, orpeople in cars that had been caught amidst the masses I asked them if they were part of the march A couple of the people I approached were participants in the march who were taking

a rest by standing on the sidewalk, but wanted to give me their opinion However, I was primarily interested in documenting the perspective of non-protesters/resistors to gauge their understanding and perception of the free trade negotiations Most of my interviews had been directed at people who were involved in opposing, promoting, or studying the implications ofthe free trade agreement But, what did the average, urban inhabitant of Quito have to say onthe subject? This perspective may offer an interesting contrast to those that are more

involved in the issue Further, it could provide insight about the level of access to

information that people have with respect to the issue, and how successful the government and anti-TLC groups have been at disseminating such information

Participant observation, an attempt at immersion in the activities and transactions of one’s surroundings, was an important element of my developing a more nuanced perspective

on the current political climate in Ecuador as well as for being exposed to more opinions about the Andean Free Trade Agreement In depth interviews provide detailed answers to many complex questions surrounding the various perceptions and understandings of free trade negotiations, but participant observations allowed me the vantage point to become aware of the symbols, chants, and phrases, with which people were resisting the negotiations

or promoting them I went to several marches and protests held in Quito against the Andean Free Trade Agreement and its failed predecessor, the Free Trade Area of the Americas

(FTAA) I also participated in a planning meeting of the Campaña Continental Contra el

ALCA, who were putting the final touches on the organization of a large protest march to

coincide with the Social Forum of the Americas, taking place in Quito in July of 2004 This meeting further deepened my understanding of the multiple grievances against free trade agreements in Ecuador, as well as giving me a sense of the composition of the coalition involved in the movement

With a press pass, I attended the annual meeting of the presidents of the official Andean Community, which includes Bolivia, Colombia, Ecuador, Peru, and Venezuela During the final press conference, many of the presidents answered questions about the implications of the new era of free trade and relations with the U.S Their responses

provided useful insight as to how free trade was positioned within the political and economic agenda of the various nation states

Finally, I paid close attention to Ecuadorean media coverage of the free trade

negotiations during the months of May through August I saved all relevant articles and headlines Throughout the months, it was interesting to note the way the headlines

highlighted the significant tensions and difficulties that emerged between the negotiating partners (the U.S and Ecuador, Colombia and Peru), with respect to themes such as

intellectual property and agriculture I collected many booklets, flyers, leaflets, pamphlets,

and artwork about the Tratado de Libre Comercio put out by various organizations and the

government in Ecuador These primary materials have been extraordinary in the amount of complex information they convey about the issue, and the creativity that is employed in doing so These materials also speak volumes to the discursive territory staked out by the various actors in the debate over free trade I also visited several bookstores in Quito to find published materials related to free trade in Ecuador I didn’t find more than a few closely related books

Mainstream media coverage in the United States is practically nonexistent on the subject of the Andean Free Trade Agreement Even during negotiation rounds, media

coverage has been limited to short newspaper articles merely noting the event These

newspaper articles have mostly been published in the local newspapers of the U.S cities in which the negotiations are taking place

Analyzing the Data:

Upon my return from the field, with distance and a clarifying perspective that

sometimes accompanies it, I began to assess the interviews, the news sources, the

conversations, and my experiences Through my research in Ecuador, the Andean Free TradeAgreement had become disentangled from the larger scheme of global free trade agreements, revealing its individual identity and complex meanings, with the power to elicit strong reactions from a cross-section of society My initial questions about impacts, winners and

losers, were eclipsed by the incessant calls to look at process After three months in Ecuador,

my in-depth interviews and surveys of more than 40 people from a broad cross section of society clearly pointed to their concern regarding the way in which the negotiations were taking place An analysis of outcomes cedes to an acceptance of the process, whereas, an analysis of the process assumes that outcomes are predicated on initial formation, who is involved, and who is not How is this trade agreement being negotiated, and by who? Very simply, these questions emerged starkly above the rest, and shaped my research

Current literature on free trade often reflects on regional trade agreements like the North American Free Trade Agreement (NAFTA) to assess the economic benefits,

characterize the winners and the losers, and account for, and explain different actors’ gains and losses from trade agreements, in general (Lloyd and Maclaren 2004; Fernández and Portes 1998; Gould 1998) The tenth anniversary of NAFTA in 2004 was occasion for myriad reports, all which reflected upon the outcomes of the agreement, and often aimed to provide lessons for future agreements As indicated by the title of the World Bank study,

“Lessons From NAFTA for Latin America and Caribbean Countries: A summary of Research Findings,” the 329 page study is intended to provide learning opportunities to other countries who have recently, or will soon engage in a free trade agreement This report, however, along with several others2 produced in the wake of NAFTA’s tenth anniversary, say nothing about the negotiation processes These documents are dedicated to an assessment of

outcomes, with no consideration or interest in reflecting on the way in which the agreement was conceived and formulated The World Bank report summarizes its findings as follows:

“The report’s main conclusion regarding NAFTA is that the treaty has helped Mexico get

2 The Congressional Research Service produced a report entitled, “NAFTA at Ten: Lessons from Recent Studies”, and the Center for Economic and Policy Research published a report entitled, “NAFTA at Ten: The Recount” Public Citizen, an organization that has published many reports on the detrimental effects of NAFTA, also fails to adequately address issues related to process

closer to the levels of development of its NAFTA partners (World Bank 2004: p 6)” The following 300 pages primarily focus on economic indicators, like GDP, to justify their conclusion.3

Among those who promote free trade, their minimal criticisms tend to conclude that trade could work even better, and that there have been no losses The conclusion usually evolves into a suggestion to strengthen and tweak regulations that exist within the structure

of the agreement, or within a nation state’s legal structure—i.e stronger restrictions on child labor, better enforcement of environmental laws, improved investment climate for foreign companies, and deeper consideration of a nation’s ability to compete in various sectors like agriculture The World Bank report acknowledges that on the downside, “…NAFTA is not enough to ensure economic convergence among North American countries and regions (World Bank 2004: p 7).” Therefore, it recommends significant domestic reforms to enable countries to truly benefit from trade Such reforms include, “…reducing marcroeconomic instability, improving the investment climate and the institutional framework, and putting in place an education and innovation system capable of fostering technological advancement and productivity growth (World Bank 2004: p 7).” The report does not make any

recommendations for strengthening the processes through which trade agreements are

negotiated, nor does it acknowledge that broad participation and citizen consent are also important elements in the success of a trade agreement

This thesis, however, proposes to probe trade agreements by beginning one step further back in the process—to the negotiation of the trade agreement itself Before trade agreements are assessed for content, it may be useful to consider the process of their

formation An analysis of a trade agreement’s formation, and negotiation process, provides the context to adequately interpret the perspectives of multiple social actors—beyond those that are sitting at the table—with respect to the agreements This approach also provides critical insight into the opposition that has developed recently, in various countries and regions, where free trade agreements are being pursued It is inaccurate to characterize opposition to trade agreements solely as opposition to certain regulations contained within

3 The report “NAFTA at Ten: The Recount” finds serious flaws in the numbers used by the World Bank study, including wrong numbers for U.S GDP in some instances The authors ofthe Recount study conclude that these wrong numbers, lead to the World Bank’s inaccurate conclusion that Mexico has made gains from NAFTA

them, or as opposition to the potential impacts of the agreement In Ecuador much of the criticism being leveled against the trade agreement is aimed at the process of the negotiation Lack of adequate civil society participation in the process, insufficient representation of the indigenous population and small farmers at the negotiating table, and lack of transparency, are the procedural inadequacies often cited It is clear then, that assessing, projecting or promising certain outcomes cannot be as important to those who are unable to shape its consequences Critics of the process claim that anything produced in this exclusionary way

is unacceptable; they believe that an agreement with such far-ranging and broad implications should have far-ranging and broad participation

FTA Overview and Timeline:

In November of 2003, United States Trade Representative Robert B Zoellick sent formal letters to the U.S Congress and Senate stating the administration’s intent to pursue a free trade agreement with the Andean Nations of Bolivia, Colombia, Ecuador, and Peru Initially, Robert Zoellick indicated that the U.S would begin the negotiations with Colombia and Peru, and that later, once they were ready, Ecuador and Bolivia would be integrated into the process According to the United States, Ecuador and Bolivia did not yet have the

operational business standards and functional legal framework with respect to contentious issues such as intellectual property; they would need to develop this type of structure, and have it meet the approval of the U.S if they were going to join a negotiation like the one being proposed In the letter sent to U.S Congressional leaders in November of 2003, Zoellick explained: “An FTA with Colombia, Peru, Ecuador and Bolivia (“the Andean countries”) will help foster economic growth and create higher paying jobs in the United States by reducing and eliminating barriers to trade and investment between the Andean Countries and the United States (Office of the U.S Trade Representative (USTR) 2003).”

The U.S proposals for an Andean Free Trade Agreement, sometimes referred to as

the AFTA or Tratado de Libre Comercio (TLC) in Spanish (I use them interchangeably

throughout), sprung up publicly around the same couple of weeks in November when trade representatives from over 30 countries in the Western Hemisphere converged in Miami to re-attempt negotiations of the bitterly contested, and seemingly doomed, Free Trade Area of the Americas (FTAA) The United States, then the driving force behind the FTAA hoped to have

a completed and signed hemispheric agreement by 2005 Concluding that this would be difficult to achieve, judging from the increasing discord among the 34 negotiating countries, and as Brazil and Venezuela displayed more resistance, the United States initiated an

alternative strategy of promoting trade agreements with individual countries or smaller groups of countries in the Western Hemisphere (Bhagwati and Panagariya 2003; Citizens Trade Campaign 2004; Arrizurieta 2006)

These smaller agreements are referred to as bilateral or regional trade agreements In March of 2004, Panama and the U.S announced that they would begin negotiating a bilateralfree trade agreement In May 2004, the Central America Free Trade Agreement (CAFTA) was signed—an agreement between the United States and Costa Rica, Nicaragua, Honduras,

El Salvador, Guatemala, and the Dominican Republic The Andean Free Trade Agreement, whose formal negotiations began in May of 2004, is another regional negotiation that the U.S has chosen to pursue in the wake of the indefinitely stalled, FTAA Smaller, regional trade agreements may be the alternative pathway for the United States to piece together the hemispheric trade block that it ultimately envisions (Citizens Trade Campaign 2004) U.S Trade Minister, Robert Zoellick, explicitly stated in a letter to congress in November of 2003 that an Andean free trade agreement was tactically beneficial for achieving a hemispheric-wide block: “…[A]n FTA negotiation with the Andean countries would also lend momentum

to concluding the Free Trade Area of the Americas by January 2005.” (USTR 2003) In a July

13, 2003 Financial Times article entitled “Bilateral Trade Treatise Are a Sham”, Jagdish Bhagwati and Arvind Panagariya write: “The US is using one-on-one agreements with small countries as models for other multilateral trade agreements, hawking them around the world

as the ideal way to further trade liberalisation.” Their article explains that through

negotiating trade agreements with one country or small groups of countries, the U.S is able

to pressure countries into accepting rules that undermine those of the World Trade

Organization, thereby destabilizing the potential for collective power among smaller

countries inherent in the multilateral framework

ATPA and ATPDEA: The Predecessors To AFTA

As of 1991, a trade pact of sorts already existed between Bolivia, Colombia, Ecuador, Peru and the United States The Andean Trade Preferences Act (ATPA), that which became

the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in 2002 gives these countries duty-free access for specific products being exported to the U.S The stated goal ofthe ATPDEA is to provide economic incentives for the participating countries to diversify their production and economies away from narcotics, specifically coca (U.S Department of State 2002) Bolivia, Colombia, Ecuador, and Peru are given duty-free access for some products entering the U.S market in return for providing help to the U.S in combating the illicit narcotics industry within their own borders

The ATPDEA does have a date of expiry, however, set for the end of 2006 The U.S expressed a strong desire to install another trade mechanism in its place before reaching the

2006 expiration date; the Andean Free Trade Agreement fit the bill In June of 2004, just days before his visit to Ecuador and Peru, U.S Trade Representative Robert Zoellick

explained, “Since the ATPA [Andean Trade Preferences Act] expires in 2006, however, we need to work together to have the Andean FTA in place.” (USTR 2004) The transition from atrade preferences act to a free trade agreement does not mean that the U.S has lost interest in combating what they perceive as the narcotics threat in the Andean region In fact, the U.S has been promoting and funding Plan Colombia since the summer of 2000, calling it a counter-narcotics and counter-terrorism aid package The 2000 aid package, passed in the U.S congress, approved funding for spray planes to fumigate coca crops, and training and helicopters for a Colombian counter-drug brigade (Clark 2003) Since 2000, Plan Colombia has become increasingly controversial throughout Latin America, as many see it a tactic by the U.S for increased military presence in the region, couched in the guise of a war on drugs

Changing Course: Bilateralism in Response to the Failure of Hemispheric Trade

While the trade representatives from Bolivia, Colombia, Ecuador and Peru were in Miami in 2003 on the occasion of what would become the failed Free Trade Area of the Americas ministerial, Robert Zoellick ceased the opportunity to call a press conference with his counterparts from all four countries in which he made the following connection between the ATPDEA and a new era in trade relations:

Colombia, Peru, Ecuador and Bolivia are the beneficiary countries of the ATPA, but under our law, that program expires at the end of 2006 And as each of my

colleagues can relate, ATPA has been a positive force It's helped create jobs, opportunity and build interest in the engagement of trade So today, we are taking

a major step toward securing market access on a more mutual and more

permanent basis, because that's the next logical step in the evolution of our trade relationship to move beyond the ATPA (Peru Ministro de Comercio Exterior y Turismo 2003)

Robert Zoellick’s reference to a more mutual era in trade relations speaks to the perception ofthe U.S that the ATPA/ATPDEA created fa vorable conditions for Colombia, Peru,

Ecuador, and Bolivia, with no real benefits to the United States The U.S perceives the Andean Free Trade Agreement as creating opportunities for U.S interests Robert Zoellick described the benefits of the AFTA as following: "An FTA with the Andean countries will help promote economic integration among the four Andean countries At the same time, it would provide export opportunities for U.S agriculture, industry and service providers (USTR 2003)."

The press conference during the Free Trade Area of the Americas ministerial was held

on the very same day that Zoellick sent formal notice to the U.S Congress and Senate

indicating the United State’s intent to launch the Andean Free Trade Agreement The quick move to initiate bilateral negotiations in the shadow of the stalemate FTAA negotiations has been commonly understood by governments and civil society in Latin America, as well as by the groups that monitor trade, as a tactic by the United States to isolate the other countries that it perceived as creating roadblocks and being uncooperative, particularly Brazil and Venezuela (Citizens Trade Campaign 2004)

Negotiations Begin:

Half a year after the joint press conference in Miami, the first round of formal

negotiations for the Andean Free Trade Agreement was held in Cartagena, Colombia on May

18, 2004 Negotiations have proceeded at a consistent and swift pace since the first meeting

in Cartagena Between May of 2004, and June 2005, there were ten rounds of negotiations, almost one round per month (see table 1.1 below) The U.S Trade Office had initially been aiming for completion of the negotiations by February of 2005 However, seeing the

implausibility of achieving that deadline, the trade ministers agreed to add several extra rounds when they were gathered in Guayaquil, Ecuador in late October 2004 during the fifth round of negotiations In Guayaquil, the new projected date of completion for the

negotiations was set at January of 2006, barring any unforeseen conflicts arising that would impede the swift conclusion of this process The table below (table 1.1) indicates that

negotiations continued beyond January 2006, and Ecuador and the U.S have still not reached

an agreement by the end of 2006

June 14-18, 2004 Atlanta, Georgia—United States

September 13-17, 2004 Fajardo, Puerto Rico

October 25-29, 2004 Guayaquil, Ecuador

November 30-December 5, 2004 Tucson, Arizona—United States

February 7-11, 2005 Cartagena, Colombia

March 14-18, 2005 Washington D.C.—United States

July 18-22, 2005 Miami, Florida—United States

September 19-23, 2005 Cartagena, Colombia

November 18-22, 2005 Washington D.C.—United States

January 25-February 3, 2006 Washington D.C.—United States

Table 1.1: Andean Free Trade Agreement Negotiation Time Table

Since the negotiations began in 2004, there have been several personnel changes in the office of the U.S Trade Representative There have been three trade ministers in the last twoyears, including Robert Zoellick, Robert Portman, and the current minister Susan Schwab It

is very difficult to discern who, from the U.S side, is sitting at the negotiating table The website of the U.S trade representative does not provide this information—perhaps due to disorganization, or perhaps a result of the secrecy inherent in the entire process The

Ecuadorean website for the trade agreement, however, does provide a clear breakdown of who the negotiators are for their side, and what they are each responsible for Below, I have provided a table (table 1.2) of Ecuador’s negotiating team, based on the information I found

on the website

President of Ecuador

Dr Alfredo Palacio

Minister of Foreign Trade, Industrialization, Fisheries, and Competitiveness

Jorge Illingworth (Engineer)

Chief Negotiator

Dr Manuel Chiriboga

Minister of Foreign Relations

Dr Francisco Carrion

Minster of Economy and Finances

Diego Borja (Economist)

Minister of Agriculture and Ranching

Pablo Rizzo (Agrarian Engineer)

Minister of Public Health

Dr Ivan ZambranoJose Miguel TeranRaul Lopez ParedesVinicio Baquero

Negotiation Tables

 Market Access (Agricultural Goods)

 Market Access (Industrial Goods)

 Market Access (Textiles)

 Commercial Defense (Safeguards)

 Sanitary and Fitosanitary measures

 Country of origin and Customs

 Technical Norms (Technical Obstacles to Trade)

Table 1.2: Ecuadorean negotiating team for the Andean Free Trade Agreement

Although it was initially proposed that Bolivia would be one of the countries included

in the Andean Free Trade Agreement, they are not officially part of the negotiations Strong social movement opposition within Bolivia to the idea of the negotiations, coupled with unresolved political and economic conflicts with the U.S has left them outside the

negotiations In recent years, there has been a burgeoning resistance within Bolivia to privatization, a common bi-product of trade liberalization (Boron, Gambina & Minsburg 1999; Harris 1999; DeMartino 2000; Eckstein 2001; Brawley 2003; Rapley 2004) Bolivia’s large Indigenous population along with historically powerful unionists have led the resistanceagainst the privatization of the country’s hydrocarbon industry, and of its water (Olivera 2004) The U.S has stated that it would like to see Bolivia make changes to its national hydrocarbon laws, to grant foreign companies more access, prior to granting Bolivia entry into the AFTA negotiations They have been granted “observer” status, and have participated

as such since early in the negotiations (Tucker and McCarthy 2004)

Although Colombia, Ecuador, and Peru initiated the negotiations together with the U.S.with the goal of producing one cohesive agreement, Peru and Colombia each ended up with separate bilateral agreements with the United States Ecuador and the U.S called the talks inMay 2006 On December 7, 2005 Peru and the U.S concluded a bilateral deal based on the Andean Free Trade Agreement negotiations that were initiated in May of 2004 This

agreement is called a Trade Promotion Agreement On February 27, 2006 Colombia and the U.S finalized a second Trade Promotion Agreement, also based on the negotiations for the Andean Free Trade Agreement On May 16, 2006 the United States announced that the talks with Ecuador were called off The cancellation of talks with Ecuador was precipitated when the Ecuadorean government annulled a contract with Occidental Petroleum (Oxy) on May

15, 20064 The office of the U.S trade representative publicly announced their irritation at the decision by Ecuador to cancel the contract with Oxy According to a press release by the Council on Hemispheric Affairs (Lettieri 2006), USTR spokesperson, Neena Moorjani said that good trading partners “obey the rule of law with respect to foreign investors.” In an

4 On May 15, 2006 Ecuadorean Energy Minister, Ivan Rodriguez, announced that the

government of Ecuador was canceling the contract for oil exploration and exploitation by the U.S owned Occidental Petroleum (Oxy) This decision was based on legal transgressions bythe company, including the unauthorized sale of 40% of its Ecuador operation to the

Canadian company EnCana (Wetizman and Lapper 2006)

article entitled, “Ecuador Oil Move Prompts U.S Ire” the BBC reported that prior to a statement by the U.S government, Ecuador interior minister said that any attempt by the U.S.

to end the trade negotiations over the Oxy issue would amount to “blackmail.” As of Fall

2006, trade talks between Ecuador and the U.S are still stalled

Thesis Organization:

Chapter 1 has been my attempt at orienting the reader to the subject of my thesis, and

my rational for choosing the research questions that I did In this chapter, I have laid out my research methods and given an overview of the various people I interviewed throughout the process Finally, I have also provided important background to the Andean Free Trade Agreement, including a brief description of the political-economic context out of which it arises

In Chapter 2, I lay out the historical background for the growing trend towards the neoliberal economic model in Latin America I look back throughout the 20th century in order to understand the social, political, economic, and cultural events that occurred within Latin America, particularly Ecuador, and which helped shape the current conditions today I not only assess the role that free trade and neoliberal economics plays in Ecuador; I analyze the arguments that seek to promote free trade as well as those that criticize it, in an attempt tounderstand the motivations for the various positions that are reflected in society In chapter

2, I also present the concept of a “spectrum of social change” adopted from the work of Patrick Bond The “spectrum of social change” captures the various ideological positions of different social actors in Ecuador with respect to the Andean Free Trade Agreement

Chapters 3, 4, 5, and 6 present in depth analysis into specific social actors within Ecuador, their history within society, and their position on the free trade agreement Chapter

3 looks at the role of the State Chapter 4 examines the position of the Confederation of Indigenous Nationalities of Ecuador (CONAIE) Chapter 5 is an assessment of the

Association of Cattle Ranchers of the Highlands and Amazon (AGSO), and chapter 6 looks

at the category of Ecuadorean small scale farmers

My conclusion follows chapter 6

Usually, the “corrective mode” leads to suggestions that certain laws be strengthened, such as a labor or environmental law In another “corrective” mode scenario, it may be suggested that a non-governmental organization be set up to monitor certain outcomes of the agreement, and document changes over time The “corrective” mode analysis falls short in its ability to accurately assess the reasons for success or failure of trade agreements, because

it fails to consider the initial construction of the agreement As discussed in the previous chapter, the myriad publications that were released in recognition of NAFTA’s tenth year anniversary seldom, if ever, reflected on the process by which this seminal multi-lateral trade agreement was negotiated However, the process and the approach to the construction of anypolicy are integral to the way in which it successfully unfolds, or is recognized and received

in a society

The plethora of bilateral trade agreements that are currently in the making provides anopportunity for closer analysis of the negotiation process When free trade negotiations are not open to public participation, but are conducted by a select few “representatives” behind closed doors (all of whom are sworn to secrecy by virtue of signing privacy waivers), how dovarious actors in society respond, and how are they affected by the negotiation? The lack of transparency inherent in closed-door negotiations surely heightens peoples’ concerns about the possible outcomes, as they are

19

excluded from any form of real participation in the outcome These closed-door negotiations not only highlight, but also perpetuate the exclusion that already marginalized people live with everyday The struggle waged against these free trade agreements is often part of a larger expression of refusal to be marginalized and excluded within one’s own society.

In Ecuador—A Conflict Over Discourse and Perception:

In Ecuador, there is a great disparity in the way in which the State and a diversity of

social actors within society articulate and interpret the TLC In particular, the conflicting

discourses of the negotiation process, where the State claims that there is wide-ranging participation, representation of civil society, and transparency, while a broad scope of

Ecuadorians claim exclusion, lack of representation, and secrecy, highlights one of the fundamental nodes of contention with respect to the agreement.5 The very language, and the claims that the government makes with respect to the free trade negotiations, are chosen

carefully in an attempt to persuade the public to “buy in” wholeheartedly to it (Ecuador: Es

Hora de Abrir Los Ojos Al Mundo 6 2004) Once the State has chosen its engagement—the path of neoliberalism and free trade—they embark on the task of explaining, justifying, and selling it to the public (Merrett 1996) While the government characterizes the dissemination

of information to the public as a legitimate form of including the public in the negotiation process, many Ecuadorians are clearly unsatisfied with only being on the receiving end

Ecuador’s President Lucio Gutierrez made the decision to participate in a free trade agreement with the United States, Colombia, and Peru in November 2003 Although

Gutierrez won the 2002 presidential election on a campaign promise that he would not pursuethe path of neoliberal reforms and free trade with the United States, after several months in

5 The Ecuadorean government’s official position on the Andean Free Trade Agreement is

presented in an elaborate website entiled TLC Ecuador: Sitio Oficial del Tratodo de Libre

Comercio en Ecuador For more information on their position, see <http://www.tlc.gov.ec>

My analysis of the sense of exclusion of Ecuadorean civil society from the trade negotiations

is based on formal interviews I conducted with ten people representing a broad cross-section

of society, as well as informal conversations with Ecuadoreans throughout three months during the summer of 2004

6 Ecuador: Es Hora de Abrir Los Ojos Al Mundo (Ecuador: It’s Time to Open Our Eyes To

the World) is the title of an Andean Free Trade Agreement promotional magazine published jointly by the Ecuadorean government, Ministry of Foreign Trade, and the official Free TradeAgreement (Andean-U.S.) organization In the summer of 2004, the six-page supplement

was inserted into one of Ecuador’s leading newspapers, El Comercio.

office, the President abandoned the platform that had assured him the Indigenous vote, and which had secured him the Presidency (Weinberg 2004) In May 2004, official negotiations

for the Andean Free Trade Agreement (AFTA), or Tratado de Libre Comercio (TLC) as it is

referred to in Ecuador, were initiated in Cartagena with the presence of trade representatives from Colombia, Ecuador, Peru and the United States

As the negotiations have progressed, a larger cross-section of Ecuadorian society has joined the chorus of opposition to the agreement Those that oppose the trade agreement have numerous concerns—concerns as diverse as the spectrum of Ecuadorean civil society Their varied concerns are in large part a reflection of their socio-economic and ethnic/culturalidentification within Ecuador Socio-economic status and ethnic/cultural identification are both intimately linked to the way in which many people derive a their livelihood For some groups, like the Confederation of Indigenous Nationalities of Ecuador (CONAIE) and groupsthat represent small farmers like the National Confederation of Affiliates of Farmer Social Security (CONFEUNASSC) and the National Confederation of Indigenous and Black

Farmers Organizations (FENOCIN), the free trade agreement has been identified as a threat

to continue successfully deriving a livelihood

Group affiliation, like belonging to a rancher’s organization or Indigenous federation also tends to influence an individual’s interpretation of the negotiations However diverse therange of concern regarding the free trade agreement, those that find themselves opposing it are unified in a fundamental grievance about process From the Confederation of IndigenousNationalities of Ecuador, to the Association of Cattle Ranchers of the Highlands and

Amazon, to a group of indigenous small-scale farmers that I interviewed, to a human rights attorney working in the National Congress, a professor of economics, and countless people that I spoke with throughout Ecuador, all were in agreement that the negotiation process was fundamentally flawed and unaccountable to civil society Even those who knew little about the free trade agreement interpreted their lack of knowledge as a failure of the process; to them, it seemed that the government should be doing a better job of keeping them abreast of what exactly was taking place behind those closed-doors The fact that they didn’t know what was going on, was proof of their exclusion

Throughout this thesis, I will investigate questions related to the broad social

movement response in Ecuador to free trade, the discord between official state claims of free

trade and civil society interpretation, as well as how history and position within society plays

a role in one’s view of the negotiations Some of these specific questions are: What is the response of the public and what forms has resistance taken, in the face of the incoherence between official claims and general perception of the negotiations? Does access to power andresources within society, and diverse social and cultural identities also shape the perception

of the negotiations and the multiple forms of resistance? Further, how does the memory of successive impositions, and unilateral decision-making by the government, contribute to the perception of the negotiations in Ecuador? Close to forty years of oil extraction in the Ecuadorean Amazon (an imposition by the government on mostly indigenous communities) has created some of the most intense conflict between indigenous communities, the

government, and foreign multinational corporations, not to mention irreparable ecological damage (Benavides 2004; Gerlach 2003; Sawyer 2003; Vickers 2003; Weinberg 2004) For many, the negotiation of a trade agreement behind closed doors is yet another decision imposed upon a civil society already sensitized to government policies that are unfavorable

Some groups in Ecuador, like CONAIE, CONFEUNASSC and FENOCIN are

demanding the cessation of negotiations, while others like the Association of Cattle Ranchers

of the Highlands and Amazon (AGSO) believe that they may benefit from a free trade

agreement, with some modifications to the one currently being proposed (Juan Pablo Grijalva

2004, in direct communication with author).7 Resistance to the TLC has mobilized new

solidarities between social movements, strengthened already existent alliances, and catalyzedthe use of a wide array of resistance tactics, including media, street protests, popular

education forums, and the legislative system—in the form of a signature campaign to call for

a referendum demanding consultation with the public

The determination of the Ecuadorian government to pursue a free trade agreement with the United States is best understood if contextualized within the relevant global,

political and economic trends, like neoliberalism, that influenced its decision Likewise, this thesis’ examination of the highly contested realm of trade negotiations must necessarily be situated in the context of global and political processes that are constitutive of free trade

7 The position of these groups with respect to the Andean Free Trade Agreement was

determined through interviews I conducted with leaders and other variously affiliated people.CONAIE, CONFEUNASSC and FENOCIN all have websites that officially state their rejection of the free trade agreement Juan Pablo Grijalva was the general manager of AGSOwhen I interviewed him about his association’s views on the trade agreement

today In so doing, I evaluate the relationship of free trade agreements to neoliberalism and examine the conflictive discursive terrain of free trade’s promise

The following sections in this chapter trace the increasingly dominant role of neoliberalism

in Latin America throughout the last two decades, and especially consider its impact in Ecuador

Social movement theorists have identified the political and economic restructuring of the region as one key factor in understanding the various social movements that have arisen throughout the last two decades I argue in this thesis that recent and ongoing social

movement resistance in Ecuador has in large part been catalyzed by the prospect of a free trade agreement with the United States In their essay on social movements in Latin

America, Fernando Calderón, Alejandro Piscitelli, and José Luis Reyna concur:

One of the most salient political events of the last two decades has been the

implementation of the harshest economic adjustment policies under pressure by the International Monetary Fund, not infrequently associated with populist forces now allied with neoliberal and neoconservative elites (1992: 31)

I conclude this chapter with a brief reflection on some of the social movement mobilizations that surfaced in Latin America within the last three decades I focus on those movements thatarose in response to the political economy of neoliberalism This overview provides insight for my analysis of the actors who are currently prominent in the U.S.-Andean Free Trade Agreement context, and the relevant social movement mobilization and resistance

Latin America and the Expansion of Neoliberal Instituions:

Economic liberalization, which encourages the outward expansion of markets,

especially to foreign investment and through the reduction of trade barriers, is facilitating an increase in the rate at which nation states engage in free trade agreements Economic

liberalization, within the context of what some have chosen to call globalization, has

restructured global capital, and reorganized commodity chains, production, and labor in industrial goods and agriculture (Anderson 2000; Khor 2001; McMichael 2000; Tabb 2004; Ufkes 1993) Globalization transcends pure economic interpretation—it encompasses

numerous processes, applied to historically uneven places (McMichael 1994); therefore, a conceptualization of globalization as a homogenizing process is inaccurate It affects and is mutually constitutive of culture, society, economics, and politics

Neoliberal economics has been systematically and globally institutionalized since the 1980’s In Chile, after assuming power via a coup in 1973, military dictator, Augusto

Pinochet, instituted the first widespread neoliberal reforms in Latin America (McMichael 2000: 155-157; Rapley 2004: 77), but it wasn’t until the late 1980’s that there was an almost uniform adoption of neoliberal economic policies throughout the region Neoliberalism was the economic response, and arguably the only response, to a tremendous debt crisis which affected virtually all of Latin America By the early 1980’s, the failure of most Latin

American countries to finance their enormous external debts led to the “Debt Crisis”, and the resultant economic restructuring of many countries’ economies (Harris 1999: 77; Veltmeyer, Petras, and Vieux 1997: 15; Walton 2001: 300-304) Whether by choice or under pressure from international financial institutions (IFIs) such as the World Bank, International

Monetary Fund (IMF), and the Inter-American Development Bank (IDB), by the late 1980’s and early 1990’s a majority of Latin American nations had restructured their economies and instituted myriad reforms under the auspices of structural adjustment programs (Veltmeyer et

feudal noblesse oblige (Kiple and Ornelas 2000; Fernández-Armesto 2002) Yet yesterday’s

“exotic” items—sugar, spices, maize—became today’s staples The institutionalization of free trade, at the global and nation-state level, cannot be separated from the rampant

proliferation of the neoliberal ideology which has spread in the last three decades,

particularly in Latin America (Hoogvelt 2001: 68-69)

The Pillars of Neoliberalism:

The privatization of public resources, diminished public expenditure for social

services, deregulation (reduction of government oversight so as not to diminish profits), and the elimination of barriers to trade are foundational pillars of modern neoliberalism, and are the emblems of structural adjustment policy So as to generate income to pay their debts, Latin American governments, under the directive of the IFIs, significantly reduced spending

on social services and basic subsidies—for food, cooking oil, gasoline, and public

transportation—the subsidization of which had, in many cases, been made possible by the loans for which they were now in debt (Walton 2001) “The [debt] crisis also resulted in a dramatic change in the priorities of the international lending agencies—from a professed concern for poverty alleviation and meeting the poor’s basic needs to securing the capacity and willingness of debtor countries to service their debts” (Veltmeyer et al 1997: 16) Structural reforms, not only diverted money from social services, but also precipitated a severe reduction in the wages of workers (Veltmeyer and Petras 2000: 25-26, 31)

In the current neoliberal schema, there are myriad examples of the diminished role of the State, and its abandonment of social service provision, specifically through the

privatization of social services and resource provision (Veltmeyer, Petras and Vieux 1997; DeMartino 2000; Rapley 2004; Tabb 2004) Significant attention has been given to the debate over privatization, brought into the public consciousness through such conflicts like the one in Cochabamba, Bolivia, and the struggle against water privatization (Olivera 2004) Neoliberal policies encourage privatization as a means by which to increase efficiency in service provision However, what has often transpired is the transference of provision from monopoly owners, like the State, to private companies who charge extremely high prices, forcing those who cannot afford to pay to lose out on the service, or settle for something inferior (Tabb 2004: 196) Soon after Aguas de Tunari, a subsidiary of the Bechtel

Corporation, signed a contract with the Bolivian government that they would take over water provision in Cochabamba, prices soared so high that people could not afford water, and an uprising ensued Water provision in Cochabamba was returned to the municipal government,but Aguas de Tunari pursued a lawsuit for $25 million dollars against the people of Bolivia

for its failed effort at taking over the water system In January 2006, the lawsuit was

abandoned

The liberalization of agriculture marks another significant arena of conflict in the context of neoliberalism, and is, in some instances, credited with stalling, or altogether breaking multi-lateral trade talks in the late 1990’s and early twenty-first century (Khor 2001) Agricultural liberalization has been accompanied by increased privatization of the productive sector, and concentration of production in the hands of fewer firms (Ufkes 1993; McMichael 1994; Magdoff, Bellamy Foster, and Buttel 2000; Cavalcante 2003; Houtart 2003)

Small Farmers and Agricultural Liberalization:

The opening up of national agricultural markets to foreign trade and investment, oftenreferred to as the liberalization8 of agriculture, is one of the more contested arenas in the current globalization and free trade debate, and potentially exhibits the uneven impacts of theprocess more than any form of market liberalization (Anderson 2000; Henriques and Patel 2003; Halweil 2000; McMichael 1995, 2000; Shiva 2000) One of the reasons that the liberalization of agriculture is so contested is that 70 percent of the world’s people still derivetheir livelihood by producing food (Shiva 2000) The nearly three-quarters of humanity that are involved in agriculture are affected by global changes in agricultural trade, and are inherently stakeholders The World Trade Organization’s Agreement on Agriculture (AOA), which sets the stage for the bilateral and regional trade agreements’ treatment of agriculture, makes restrictions on exports and imports illegal and legislates the removal of domestic support to most producers (Buckland 2004: 117) Studies of the impact of these trade

agreements have concluded that it is large agribusiness firms that have benefited from deregulation, and smaller-scale farmers who, lacking economic supports cannot compete within this new system (Halweil 2000; Khor 2000; Magdoff, Foster, and Buttel 2000; Shiva 2000; Thrupp 2000)

8 Liberalization of the market refers to reforms made, like the reduction of tariffs or other barriers to trade and foreign investment The goal is to make an economy more competitive, and often to open a national market to other foreign economies for trade of goods and

services

The trend to liberalize trade in agriculture through free trade agreements has been accompanied by a very extreme new international division of labor in agriculture (Ufkes 1993) With the dramatic transition from the nation state, to international capital as the main force for molding and regulating regional agriculture, there has been an accompanying accumulation of wealth and power for a few actors in the agriculture industry (Cavalcante 2003: 207) The actors who have benefited from the global liberalization of agricultural markets are large agribusiness corporations (Khor 2001, Magdoff, Foster and Buttel 2000; McMichael 1998; Shiva 2000) Civil society groups, such as Peoples Food Sovereignty and the global farmer and peasant group, Via Campesina, have advocated for the removal of any agricultural related legislation within the WTO and other trade agreements, stating that food should not be traded like micro-chips and transistors (www.peoplesfoodsovereignty.org, www.viacampesina.org 2003).

As neo-Malthusian fears of increasing global population top the agenda of

international financial institutions and aid organizations, calls for intensified and efficient food production, cheaper food, and increased access to cheap food, have become a

centerpiece and justification for agricultural liberalization mediated through free trade

agreements (Cavalcante 2003; Houtart 2003; Khor 2001; McMichael 1994; Shiva 2000) Advocates of agricultural liberalization claim that it yields positive because it forces

producers to create a higher quality product, results in lower prices through increased

competition, and therefore, it makes food more accessible to consumers

Even within a particular nation state, however, there may be actors that greatly benefitand some that may suffer as a result of the liberalization of the agricultural economy Some research on agricultural liberalization generally acknowledges differential impacts, both among different nation states and within them (Myhre 1994; McMichael and Kim 1994) In their 2003 policy brief, “Agricultural Trade Liberalization and Mexico,” Gisele Henriques and Raj Patel conclude that while trade liberalization has hurt many small corn farmers in Southern Mexico, it has helped large agribusiness companies within Mexico and the U.S It

is fairly well documented that small farmers do not benefit as much, if at all, from

agricultural liberalization as do large-scale farmers (Cassel and Patel 2003; Halweil 2000; Henriques and Patel 2003; Magdoff, Bellamy Foster and Buttel 2000; McMichael 1994, 1998)

Some literature, as presented by Anthony Bebbington (2004) in his article on

indigenous farmers in Ecuador, as well as Jon Hellin and Sophie Higman in their 2003 book,

Feeding the Market: South American Farmers, Trade and Globalization does suggest that

small-scale farmers may benefit from agricultural liberalization in this era of globalization, and successfully integrate into the global economy, if they can identify and produce for a niche market (Bebbington 2004: 400; Hellin and Higman 2003) However, this literature also makes clear that access to credit is necessary for the survival of small-scale farmers, and niche markets alone are not enough

The inequitable distribution of benefits from agricultural liberalization can be

attributed to a variety of factors; small producers have less access to export-markets, less capital with which to invest in production of crops for the export-market, less land area on which to produce crops in order to be competitive, and often lack the subsidies and support given to larger producers As a result, increasing numbers of rural peoples now depend on non-farm and non-rural sources of income for their livelihoods (Barsky 1990; Escobal 2001; Klein 1992; Lopez 1995; Martinez 1991; Reardon et al 2001 cited in Bebbington 2004: 400)

Neoliberalism, Modernity, and the Machine:

An assessment of neoliberalism, economic liberalization, and free trade would be incomplete without a brief reflection of the way in which these projects or institutions

intersect with, and are motivated by ideas about development and modernity Discourses on agricultural liberalization, for example, are rife with references to terms like productivity, modernity, and mechanization, often set in diametric opposition to other concepts also loadedwith value judgements like, uncivilized, backwards and traditional In many instances, free trade is promoted through similar discursive and moral imperatives; those who participate aremodern, or will be granted access to a modern world; those who chose not to will be left behind in an uncivilized, unproductive, and uncompetitive world

As Arturo Escobar (1995) points out, the ideals of “modernization” and “technology”cannot be separated from the developmentalist project of the post-World War II era andonwards Economic growth was embedded in the agenda of the development project, and itwas pitted against “…general backwardness and economic underdevelopment (Escobar

1995: 40).” The development institutions9 that were put in charge of “developing” andundoing the “backwards” conditions of the poor masses, identified technology as animportant tool to this end Escobar explains:

Technology, it was believed, would not only amplify material progress, it would alsoconfer upon it a sense of direction and significance In the vast literature on thesociology of modernization, technology was theorized as a sort of moral force thatwould operate by creating an ethics of innovation, yield and result Technology thuscontributed to the planetary extension of modernist ideals (Escobar 1995: 36)

Some scholars, like Arturo Escobar, argue that poverty has been caused andexacerbated by development, particularly economic development with its emphasis onproductivity and technology In his article on the Green Revolution, Lakshman Yapa (1993)insists that we must reassess our notion of scarcity, a concept closely linked tounderdevelopment Yapa describes the way in which the notion of scarcity is oftenconstructed to justify the need for technologies that can remedy a supposed deficiency.Historically, development practitioners, including IFI’s, government and non-governmentalagencies, have relied on the introduction of products, to alleviate a perceived deficit orscarcity—hunger, for example, in certain regions In many instances, technologies have beenintroduced that destroyed an already existing source of supply—causing scarcity, therebycreating the need for new supplies (Yapa 1993) In the current context, the analysis advanced

by Yapa may be expanded to think about the ways that many governments together withInternational Financial Institutions are currently introducing free trade agreements, as a type

of “product”, often marketed as the best or only way to alleviate a “perceived”underdevlopment, deficit of democracy, or even hunger

Yapa uses the Green Revolution and the introduction of improved seeds to farmersaround the world as an example of technologies that failed to alleviate the problems ofhunger He refers to the green revolution as the “transformation from seeds of plenty to

9 Established out of the Bretton Woods meetings in July 1944, at which representatives of all

44 allied nations attended, the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) are considered the first global

development and international finance institutions The IBRD is now one of five institutions within the World Bank Group

seeds of scarcity.” The introduction of high yielding seeds, sometimes referred to as “magicseeds”, was not a success but rather a failure for many farmers The seeds providedincreased yields and created scarcity at the same time; hybrids showed increasedvulnerability to pests and diseases (Yapa 1993; Thrupp 2000) These improved seedsrequired external additional inputs, such as pesticides and fertilizers, previously unnecessaryfor many farmers to maintain healthy crops Farmers had to invest in expensive products inorder to produce crops, which previously grew without these inputs The agriculturepracticed prior to the introduction of improved seeds had a “reproductive capacity” whichwas replaced with the “productive capacity” of the nonrenewable industrial inputs (Shiva

1991, cited in Yapa 1993)

Critiques of the Green Revolution, like those articulated by Lakshman Yapa, are sometimes made alongside very orthodox denunciations against technology, and romantic notions, which often construct indigenous production techniques as diametrically opposed to the use of technology Anthony Bebbington (2004) cautions against such coarse

generalizations, which he says come out of the “farmer-first” approach that “…constructed

an essentialized conception of indigenous agriculture that is homogenized, static, and easily taken out of socio economic, political, and cultural context (Fairhead 1992; Fairhead and Leach 1994; Scoones and Thompson 1994; cited in Bebbington 2004: 398).”

In the following chapter, I hope to provide specific examples of the way different actors in Ecuador discursively construct the free trade negotiations with respect to ideas of development, modernity and progress, and the related concepts of technology and economic growth While some of the actors outwardly embrace and echo the developmentalist

ideology, others reject it as an identifiable threat to their livelihoods

Neoliberalism and Inequality:

Neoliberalism in Latin America has restructured economies, labor and capital, as well

as, social, and class relations throughout the region In particular, while some people have benefited from new export opportunities and privatization afforded them through economic liberalization, many have not With fewer protections for workers, and decreased real wages,the working class has been hit particularly hard According to Veltmeyer and colleagues (1997: 73):

The overall effect of structural adjustment in Latin America has been to shift wealth upward to the domestic dominant classes and outward to foreign creditors…

Dominant classes have benefited from lowered wage costs, the weakening of unions and the ability of workers to resist in the workplace…

In his book, Globalization and Inequality, John Rapley (2004) proposes that neoliberal

policies have raised aggregate income, but also skewed its distribution As a result of the widening inequality, there has been a rise in political instability and volatility (Boron,

Gambina, and Minsburg: 1999; Rapley 2004: 6) After explaining the mechanism by which neoliberal policies have led to an increase in income inequlity and concentration of wealth, Veltmeyer and Petras conclude:

More than anything, neoliberal policies have produced a broad and deep division insociety at all levels, polarizing it into two, procuring the benefits in the form ofwealth for ‘the winners’, subjecting ‘the losers’ to conditions of exploitation andsocial exclusion: social and economic insecurity, low renumeration and returns ontheir labour and, and, for many (2.4 billion, 40 percent of the world population, it isestimated) conditions of abject poverty (2000: 27, parenthesis match orininal)

In 1999, the UN Economic Commission for Latin America (ECLAC) concluded in its review of the region that income inequalities have increased in seven out of the twelve countries that it studied (ECLAC 1999, cited in Hoogvelt 2001: 256-257) In 2001 ECLAC released its “Latin America Social Overview” comprehensive report on hemispheric poverty

It concluded that 220 million people or 43% of Latin Americans live in poverty Ninety-five

million are considered extremely poor These figures were up from 1994, when 209 million

people were living in poverty, and up from 1990 when 197 million people were living in poverty ECLAC projected that the numbers would continue to rise in 2003 due to lack of growth in per capita GDP (ECLAC 2001 cited in Montano 2003: 34)

Just a couple decades earlier, however, the outlook in purely economic terms was quite different in Latin America The period from 1950 to 1980 has been referred to as the “Golden

Age” for Latin America, because of its economic growth This growth was not uniform in allcountries, or throughout this entire period Generally, however, this era was characterized by annual growth in per capita income of 2.9%, whereas the 1980’s saw an annual decline of 0.1% per capita income (Montano 2003: 35) Wealth, however, is not created equally for all, nor is it created without sacrifice by many sectors of society—usually the urban working class, and rural poor Economic reforms inherently have social and cultural implications Hence, attention must be given to micro-politics of every region and country to assess what growth really means, for whom, and at what cost

What do Numbers Really Mean, Anyway?

Numbers that measure economic prosperity have been used as the prevalent parameter forassessing development Although Latin America has enjoyed times of significant economic growth, this growth has not always translated to improved social conditions, equal

distribution of benefits, nor has it been sustained Moreover, economic prosperity was often achieved at great human costs, through repression, the dismantling of human rights, and murder by the government of civilians who were perceived as obstacles in the path to

economic accumulation Chile and Argentina, under Pinochet and Peron respectively, offer some of the more egregious examples of such state sponsored terrorism against civilians (Aguilera, Fredes 2003), during this “Golden Age” of economic development

In Latin America, export promotion of agricultural commodities, which has been

associated with wealth creation in many instances, has also meant increased competition for farmers on a domestic scale, and smaller farmers with fewer resources to compete have often not survived this type of “development” Central America, in particular, has a history

wherein social unrest and crisis is linked with the impacts of agricultural export industries on the poor According to Conroy, Murray, and Rosset (1996: 28): “Time and time again the introduction and boom of a new export crop has driven peasant farmers off their lands Each such wave has been followed by a period of intense rural strife, gradually subsiding as the new landless move to the cities or to the agricultural frontier.”

GDP and Capital Accumulation—Indicators of Development?

It was Harry Truman, and a famous speech he delivered in 1949, who is credited with creating an imperative for U.S led global economic development, and defining the largest parts of the world as “underdeveloped areas” (Escobar 1995: 3-4, Sachs 1999: 3) During the1950’s and 60’s, the primary indicators for development were based on per-capita income and were compared to those of the U.S and other Western industrial nations (Sachs 1999: 5)

In order to achieve capital accumulation, given that population was increasing at this time, the emphasis was placed on growth of the gross domestic product (GDP) Hence, economic development, or capital accumulation, was the primary concern and goal of development economists at this time Countries who had identified themselves, or been identified as underdeveloped, set about the task of “un-undeveloping” (Escobar 1995)

Countries were subject to increased interventions in the name of development These interventions were focused on the markets of the country, creating policies to promote

industrialization, all in the context of the state as the major promoter of capital accumulation (Meier 2001: 15) During this “first generation of development” in the post-World War II era, Gerald Meier explains:

The government of a development state was to promote capital accumulation, utilize reserves of surplus labor, undertake policies of deliberate industrialization, relax the foreign exchange constraint through import substitution, and coordinate the allocation

of resources through programming and planning (Meier 2001: 15)

The first generation emphasized industrialization as a means to achieve development and eradicate poverty According to Sachs: “Whenever poverty was mentioned at all in the documents of the 1940s and 1950s, it took the form of a statistical measurement of per capita income whose significance rested on the fact that it lay ridiculously far below the US

standard (1999: 8).”

In the 1970’s there was evidence that increased GDP could not necessarily be equatedwith reduced poverty, increased standard of living, or the envisioned development that so many institutions had been hoping for (Sachs 1999; Meier 2001) And, perhaps, poverty was not merely the product of lack of industrialization, or the failure to reach U.S economic

standards Wolfgang Sachs elaborates on the narrow conception of poverty that motivated development economics in the first decades after World War II:

There was no mention of the idea that poverty might also result from oppression and thus demand liberation, or that a culture of sufficiency might be essential for long-term survival, or, even less, that a culture might direct its energies towards spheres other than the economic No, as it was in the industrial nations so it was to be in all others: poverty was diagnosed as a lack of spending power crying to be banished through economic growth (Sachs 1999: 9)

But, this formula proved unsuccessful for many Social progress was not the product of economic growth: “Poverty increased precisely in the shadow of wealth,

bi-unemployment proved resistant to growth, and the food situation could not be helped throughbuilding steel works It became clear that the identification of social progress with economic growth was pure fiction (Sachs 1999: 6).” The poorest sectors of society gained little to nothing although many countries showed signs of increased GDP Then president of the World Bank, Robert McNamara, spoke in 1973 to this issue: “Despite a decade of

unprecedented increase in the gross national product…the poorest segments of the populationhave received relatively little benefit…The upper 40% of the population typically receive 75% of all income (McNamara quoted in Sachs 1999: 6).”

Assessing development as a function of economic prosperity may not reveal an accurate picture of the social, cultural and political realities of the societies, which are

undergoing “development” GDP has long been taken to be a measure of development: the higher the GDP, the more developed, and the better off a country is But, does economic prosperity really mean development? Ecuador’s trajectory through neoliberalism provides specific insight into the complex meanings and numerous registers of economic prosperity, development, wealth creation and distribution, and inequality within one society

Ecuador and Neoliberlism: Crude Prosperity and Crude Inequality

In Ecuador, the focus of this thesis, neoliberalism was not thoroughly embedded into the political economy of the State until the 1990’s The government’s shifting economic

policies between the mid 1970’s through the present, from protectionist import-substitution, then flirtations with neoliberalism, to its decisive position to embrace the totalities of a free market in the 1990’s, cannot be separated from its relationship to, and dependency on

petroleum production The discovery, by Texaco in 1967, of the first significant amounts of

oil deposits in the Ecuadorian Amazon, also known as the Oriente, was just the beginning of

a boom (Gerlach 2003; Sawyer 2004) that would have profound consequences on the

country’s future—on its Indigenous population, its economy, and ecosystem Like bananas before it, and cacao earlier, oil represented an enormous income for some (Gerlach 2003, Swyngedouw 1997), and a new export commodity for Ecuador to sell to the world

The oil boom in Ecuador was the backdrop for a state-led discourse on modernity, industrialization, and development, despite the fact that the gains were not distributed

equally According to Allen Gerlach: “Those who directed Ecuador saw oil as an opportunity

to modernize, a means to escape both underdevelopment and poverty, and a way to build a dynamic, developed, and industrialized economy (Gerlach 2003: 37).” However, the

government and the transnational corporations exploiting the petroleum, not the Indigenous people living in the territory of the Ecuadorian Amazon where oil was discovered, were (and still are) the primary beneficiaries of the petroleum wealth The government did use some of this revenue during the 1970’s for expanding infrastructure (Gerlach 2003; Swyngedouw 1997), social services and subsidies, especially for cooking gas and gasoline (Gerlach 2003) During the 1970’s, the government imposed high import taxes to protect domestic business, and some of the new oil revenue was used to launch state-owned industries (Gerlach 2003) The social, cultural, and environmental destruction resulting from several decades of intense oil exploitation are particularly concentrated in the territory of Indigenous people (Gerlach 2003; Sawyer 2004; Ziegler-Otero 2004) Since 1971, when Texaco began active oil

production in the Ecuadorean Amazon, there have been about thirty major spills from the Trans-Ecuadorean pipeline, most often on the Amazon side of the Andes (Kimmerling et al 1991: cited in Vickers 2003: 60) The 312-mile-long, Trans-Ecuadorean pipeline traverses several fault lines as it makes its way from Nueva Loja in Sucumbíos to the Pacific coast port

of Balao in Esmeraldas (Gerlach 2003, Vickers 2003) A March 1987 earthquake caused the pipeline to rupture, carrying away a 25-mile long piece of the pipeline, and dumping crude oil across the Ecuadorean Amazon; the environmental disaster precipitated a five-month