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Tereza Coraggio

Third Paradigm is an out-of-the-box thinktank on community sovereignty and regenerative economics.

We look at how to take back our cities, farmland and water; our money, production and trade; our media, education and culture, our religion and even our God.

We present a people's history of the Bible and a parent's view on how to raise giving kids in a taking world.

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Past Shows


3P-066 Peru and the Free2Raid Agreement

January 8th, 2011

3P-066 Show Information (includes MP3 download link)

Welcome to the 66th episode of Third Paradigm. Our title this week is "Peru and the Free2Raid Agreement." You heard that right - not free trade, but free to raid. Let's jump right in and start with some history. In 2007, a determined Democratic caucus put their collective feet down. They refused to consider any more free trade agreements without a new model, with stronger protections for labor, human rights, and the environment. And so, in May, a deal was cut with the Bush administration for a new and improved FTA with Peru. In response, the AFL-CIO and other unions agreed not to oppose it, effectively blocking the coalitions to which they belonged. Environmental groups promised their neutrality in exchange for an agreement not to log old growth forests. Church and human rights organizations said they wouldn't rally their members if progress were shown on reducing abuses before the FTA was implemented. And so, proponents of the FTA bargained with leaders of the major issues and came up with win-wins. After flexing their collective power for these concessions, each alliance told their member organizations to stand down.

When the Finance Committee reviewed the draft,1 however, Sen. Jeff Bingaman (D-NM) noticed a flaw. There was no funding for independent oversight. He proposed $30M over 5 years to monitor whether export factories were complying with the labor laws. But he was ruled out of order because, under the process called Fast Track, no change can be made unless necessary in order to implement the FTA. No funding was therefore approved, nor any agency to which workers or communities could appeal. In Chapter 10 of the agreement, though, there were 46 pages of investor protections. These included reparations owed by Peru's taxpayers if new labor or environmental laws threatened the investors' expected profits. The International Centre for Settlement of Investment Disputes was designated as the court of jurisdiction. Out of hundreds of cases filed by corporations against countries, only one case has ever been filed there by a country against a corporation.2

To research conditions, a Congressional delegation went to Peru, but failed to meet with the major civil groups representing research, social development, agriculture, labor, and health. These organizations sent a joint statement of objections to Congress but it was never entered into the debate. In July, millions of Peruvians marched in a nationwide mass protest against the FTA involving teachers, miners, agro-export workers, textile and industrial workers, students, and small merchants. Ten days later President Garcia passed 11 Executive Decrees giving immunity to any police or military who caused death in the line of duty. He also established 20-years of imprisonment for teachers who encouraged minors to belong to "gangs" or to anyone who collaborated with "terrorism." This included peaceful protests and what was called "information terrorism" like respected economist Professor Pedro Francke and agroecologists David Bayer. Next, 70% of Peru's Amazon was zoned open for oil and gas exploration, with the Director of Peru's Protected Forest Area fired the day after he pointed out that this violated Article 18 of the pending FTA.

informationterrorists (63K)

Pedro Francke:

My name is Pedro Francke, and I am the coordinator of ForoSalud, a coalition working for the right to healthcare. We have a point of view that is in opposition to the signing of this free trade agreement, because of the clauses that have to do with intellectual property and the effect that this has on the price of medicine. In the chapter that has to do with intellectual property, the free trade agreement with Peru goes beyond CAFTA in areas such as the five year data protection, compensation for unjustified delays and other intellectual property. The Peruvian Minister of Health has calculated that these rules will double the price of medicines within 12 years. This will have a particular effect on people like those who have HIV AIDS, and those with tuberculosis, mental health problems or heart problems. ForoSalud is part of a campaign that has been gathering signatures asking that the free trade agreement be subjected to a referendum, and we’re also contemplating legal action because we believe that the free trade agreement violates rights that are protected by national and international norms. The health ministry has also calculated that between 700,000 and 900,000 people would lose their healthcare coverage because of the free trade agreement. The referendum initiated should be debated in Congress here within the next few weeks, and we’ll be fighting to ensure that this free trade agreement is subjected to a referendum before it comes up for approval. ( conference call, 2006)

A year prior in Peru, though, things had been looking up. The right-wing, pro-U.S. candidate had been soundly defeated in the election, leaving a run-off between Garcia and a nationalist who rejected foreign trade and investment in favor of domestic trade. To attract bipartisan votes, Garcia promised to reinstate labor rights taken away in the 1990's under free market policies, and to revamp the FTA to protect labor and resources. He would invest in infrastructure for the Sierra highlands and the eastern Amazon basin, two of the poorest regions, who overwhelmingly supported the nationalist candidate. Privatizations would be reversed, and a Constituent Assembly convened. Wealth would be distributed to improve the living standards of all Peruvians. His party, APRA, calling itself "the party of the people" spoke strongly against imperialism. Through these election promises, Garcia won, but still by a slim margin.

Is Alan Garcia off his meds?

Within Garcia's first month in office, he had repudiated his campaign promise to rewrite the FTA, and made its signing by Congress his first priority. He named pro-U.S. businessmen and an Opus Dei member to his cabinet. He introduced economic austerities to the regions that had opposed him, to attract foreign capital and to promote "development." Within the year, his approval rating dropped and unrest soared, to which he responded by militarizing major ports, airports, and power stations. Does any of this have a familiar ring? Before our head starts spinning and we spew forth the names of Obama appointees, let's pause for some poems. These are New Year Prayer by David Whyte and New Year's Resolution by Philip Appleman. The music is Ballake Sissoko with Improvisation 1.

New Year Prayer

This robust heart involved
with too many worlds
for its own good,
this portion of creation
constantly trying
to make its self singular,
this chef at home in the kitchen
among the gleam of knives,
among eclectic bottles,
sometimes dreaming
as a hermit among leaves,
drinking the centuries
of inherited silence,
sometimes the
social host opening
the doors and lighting
the candles,
often a father lifting his daughter
high up above him
and then
the husband
sheltered by night
to talk and talk again,
too often now
as the years go by
the son worrying
for a father sitting
Atlantic miles away,
in a silent
remembered parallel.
And now this
other parallel,
this symmetry
for everything
on the outside,
the writer in winter
at his desk,
caught in the light,
beneath the window,
bringing together
the last and the first,
the middle and the edge,
the near and the far,
the troubled lives
all calling for the one line
and the one life,
for creation came together
in a central
unspoken wish,
to be held
and made one
like a god's blessing
out of nowhere,
the pen
touching a wound
that heals them all.

~ David Whyte ~
From River Flow

* * * * * * * *

New Year's Resolution

Well, I did it again, bringing in
that infant Purity across the land,
welcoming Innocence with gin
in New York, waiting up
to help Chicago,
Denver, L.A., Fairbanks, Hon-
olulu--and now
the high school bands are alienating Dallas,
and girls in gold and tangerine
have lost all touch with Pasadena,
and young men with muscles and missing teeth
are dreaming of personal fouls,
and it's all beginning again, just like
those other Januaries in
instant replay.

But I've had enough
of turning to look back, the old
post-morteming of defeat:
people I loved but didn't touch,
friends I haven't seen for years,
strangers who smiled but didn't speak--failures,
failures. No,
I refuse to leave it at that, because
somewhere, off camera,
January is coming like Venus
up from the murk of December, re-
virginized, as innocent
of loss as any dawn. Resolved: this year
I'm going to break my losing streak,
I'm going to stay alert, reach out,
speak when not spoken to,
read the minds of people in the streets.
I'm going to practice every day,
stay in training, and be moderate
in all things.
All things but love.

~ Philip Appleman ~
From New and Selected Poems, 1956-1996

The music was Ballake Sissoko with Improvisation 1. The poets were David Whyte with A New Year's Prayer and New Year's Resolution by Philip Appleman. This is Third Paradigm and we're talking about Peru as the model for the new and improved Free2Raid Agreement. Since the architect of NAFTA, William Daley, is now the gatekeeper for the White House, we're going to need all the New Year prayers and all the resolve we can get.

While the FTA was being considered, a devastating earthquake hit Peru's Ica Valley. In a US blog called Truth About Trade & Technology, Iowa farmer Dean Kleckner seized on the opportunity to push the deal, writing,

truthtradetechnology (28K) deankleckner (9K)

"Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. It's appropriate to give them all the fish they can eat now, but rather than give them handouts once they're back on their feet, we should provide them with economic opportunities."


But Kleckner may have been fishing himself, since the Iowa Kleckners had received over $1 million dollars in farm subsidies over the last ten years.3 In all, since 1995, the US has given $75 billion to subsidize GMO corn, for which Peru was one of the top 20 importers in 2007, up 60% from 2006.

Under WTO rules, debtor nations aren't allowed to subsidize their own crops. But Garcia has found a way to subsidize exports - they get free water while families and subsistence farmers have to pay. "Information terrorist" and agro-ecologist David Bayer is a former USAID Deputy Executive Officer who resides in the Ica Valley. For decades now, he's devoted himself to undoing the damage of a former USAID project - asparagus. He writes, "Asparagus is the worst possible crop for a desert climate like Ica. Israel would never consider it. As a farm advisor in Sacramento, I worked a huge asparagus production area that contained an abundance of water from the Sacramento River and floods from the Fall-Winter rains. In Ica, we generally have no rain; the Ica River carries water only during March to May, and one month in October or November. Asparagus is a crop which uses five to seven times the amount of water as our traditional Ica crops - the most natural being fruits like grapes, avocados, pecans, oranges, apples, guayabas, etc. But in the 1980's, with help from USAID and UC Davis, the asparagus export program was installed without an Environmental Impact Study. Peru became the leading exporter. At the same time the Ica aquifer began its decline to the point that Ica will have no drinking or irrigation water in five years.  311 Million Cubic Meters (MMC) of water is over-drafted annually. Divide that number into the reserves of 1,443 MMC and you get less than five years until the aquifer is dry." And when the aquifer declares bankruptcy, the working class will have lost far more than money.

Since NAFTA, US imports of asparagus have risen 2500% from 6 million to 160 million pounds,4 with devastating effects on domestic farmers. In 2003, Green Giant and Del Monte relocated several large processing plants to Ica. The same year, California asparagus farmers plowed under their crops, which take years to establish, because they weren't worth the price to harvest.5 Washington, a major asparagus processor, lost three-fifths of their asparagus acreage over six years. A video called "Asparagus! Stalking the American Life," featured by the film club Ironweed, tells the story of Michigan farmers and their creative attempts to save their way of life.

In 2007, UC Davis tried to make up for helping to relocate asparagus to Peru by doing a detailed cost analysis for their San Joaquin Valley farmers, where ideal conditions had formerly made it the asparagus capital. Asparagus takes four year to reach its peak harvest of 4000 pounds per acre, at which point each acre costs about $4000 to cultivate . This gives them a profit of $45 per acre. But by then they've accrued losses of $2000 per acre, and they still have to pay for the land and the equipment. When this is figured in, they're $3000 an acre in the hole to begin with and continue to lose $300 an acre by operating at maximum efficiency. This qualifies them for the grand prize - $12,000 in Trade Adjustment Assistance or TAA from the government after they've attended training and presented a business plan to do something else. Maybe they can move to Iowa and work for the Kleckners.

perutable3 (60K)

In this precarious commercial balance, both the US and Peru's food security and food autonomy are falling fast. The US now imports 7.5 times more vegetables from Peru than it exports. And Peru now imports more food than ever, paying ten times more than it paid ten years ago. Although industry enthusiasts call asparagus "an engine for economic growth6," agro-export workers earn the US equivalent of $236 per month while the cost of basic food for a family, called a breadbasket, is $414 per month.7 Maybe they need a little TAA and TLC too.

Let's pause for a song. This is John Trudell with It Is What It Is.

[John Trudell – It Is What It Is ]

That was John Trudell with It Is What It Is. You're listening to Third Paradigm and we're talking about Peru as an example of what a Free Trade Agreement Is and what it Ain't. For taxpayer, workers, and small farmers on both sides of the divide, it ain't free, it ain't trade, and it ain't an agreement. How much money does Peru as a whole make from asparagus exports? According to a presentation to the 2006 Ways and Means Committee, only 30¢ on the dollar. The other 70¢ goes to US supermarkets, wholesalers, shippers, distributors, importers, and storage owners. But out of Peru's remaining 30¢ there have to come seeds, materials for processing, fertilizer, and pesticides, which all come from the US. And then there are the tax breaks. Agro-export profits are taxed at just 15%, half of the national average paid by other industries.8

povertymattersperu (41K)

"For every dollar spent by a US consumer on imported asparagus from Peru, $0.70 stayed in the US, the industry explained. The money goes not to Peruvian farmers, but to US supermarkets and wholesalers, and to US shippers, distributors, importers, and storage owners. Just $0.30 stays in Peru."

So who does benefit from Free Trade Agreements? Peruvian economists like "information terrorist" Pedro Francke contributed to a regional analysis called GRADE. It predicted that the FTA would increase revenue by $575M for city-dwellers, but that $158M would be taken away from poor rural populations. The Sierra highlands, with the most extreme poverty, would lose $100M, while Metropolitan Lima, where the wealthiest live, would gain $350M. From a distance, therefore, the FTA looks like it brings money into Peru, but it actually makes the rich richer at the expense of the poor. Products and agriculture flow out of indigenous communities while the profits flow to wealthy business owners, who buy electronics and luxury goods from overseas and send their kids off to US and European colleges. The loss of land and livelihoods exacerbates the rural to urban migration, overburdening population centers with greater unemployment. So while Wall Street touted the $7 Billion in trade created by the FTA, to Incan mathematicians, shipping food 4000 miles away in order to buy food from 4000 miles away doesn't compute. Trade definitely doesn't make the GRADE.

With all these problems, should there even be free trade agreements? Let's reverse that question. If trade is a good thing and free is a good thing, then why shouldn't all trade be free? One good reason some trade shouldn't be free is if it destroys the land, water, or air where the products are made, mined, or grown. A second is if it destroys the people, by undermining their livings or by supporting violence to displace or oppress them. Under these circumstances trade shouldn't even be allowed, much less be tax-exempt. But in fact the situation is worse. As the Network for Global Justice in Investment writes,

"nations have been sued for seeking to safeguard their people's health, to control their water and other resources, and to reshape their economies in the public's interest. Foreign investors have been able to win hundreds of millions of dollars in damages in legal playing fields tilted heavily to their advantage." 9

Meanwhile, here in the US, our taxes are subsidizing the Kleckners so they can export their corn to Peru at prices Peruvian farmers can't compete with. And while they enjoy tax-free trade at our expense, it's illegal for us to trade with our neighbors without paying taxes. We need free trade between neighbors, not between nations. And we need to start calling these agreements what they are: Subsidized Investor-Corporate Kleptocracy, or SICK.

This has been Tereza Coraggio with Third Paradigm. Huge thanks to David Bayer of Peru and Howard Rosenberg of UC Berkeley for the wealth of resources. Marqakuyki, wauqicha. For web production, thanks to Mike Scirocco, and for the poems, thanks to Joe Riley of Panhala, which means "source of deep water." And for all the songs in this show, thanks to Dan Roberts, the prolific weekly producer of The Shortwave Report, Youth Speaks Out!, and RhythmRunningRiver, two hours of spoken word and music. Our closing song from this free-flowing aquifer is by Buffy St. Marie called No No Keshagesh.

[Buffy Sainte Marie – No No Keshagesh]


  1. Inside US Trade, "Senate Finance Committee Overwhelmingly Approves Peru FTA in Mock Markup," September 21, 2007.
  2. Network for Justice in Global Investment, "Number of ICSID Cases Listed by Country & Region."
  3. Environmental Working Group Farm Subsidy Database, 2007.
  4. Peru Asparagus, Food and Water Watch 2007.
  5. Barbassa, Juliana, "Increase in Vegetable Imports Spell Doom for U.S. Growers," Associated Press, Feb. 1, 2004.
  6. Rios, Luz Díaz, "Agro-Industries Characterization and Appraisal: Asparagus in Peru," Agricultural Management, Marketing and Finance Working Document 23, Food and Agriculture Organization of the United Nations (FAO).
  7. La Republica newspaper article on comparative wages and salaries, August 5, 2007, p. 11.
  8. Big business clear winner in Peru's asparagus industry
  9. The Network for Justice in Global Investment

Thank you for listening.