[Date Prev][Date Next][Date Index ]

Citibank vs. Social Security

To: Retort
Via: MN

Citibank vs. Social Security
Lori Wallach
Global Trade Watch
October 30, 2007

The Peru NAFTA expansion is coming up for a vote next week. The deal could allow Citibank to demand millions in compensation from impoverished Peru if the country reverses its failed social security privatization. The proposed Bush expansion of NAFTA to Peru contains provisions that could lock Peru into a privatized social security system similar to the Bush proposal during the last Congress. The main beneficiary of the provision seems to be Citibank, the largest shareholder in ProFuturo AFP, a company authorized to compete against Peru's national social security system.

As if any agreement expanding NAFTA is not offensive enough, it's outrageous that the proposed U.S.-Peru "free trade agreement" contains provisions that could make it difficult for Peru to reverse its failed social security privatization. Americans overwhelmingly rejected the Bush administration's proposal to privatize our social security system here in the United States. It would be hypocritical to lock in Peru's failed social security privatization by allowing such provisions to remain in the proposed Peru FTA. No trade agreement should ever have rules that affect government policy on social security.

If the widely unpopular Peruvian social security privatization were reversed, the investment chapter in the Peru FTA could empower foreign investors that provide private retirement accounts in Peru - like Citibank - to demand compensation from the Peruvian government in UN and World Bank tribunals for "nationalizing" their investment. It would elevate the profits of Citibank above the survival of the poor and elderly in Peru.