CAFTA Signed; Protests Continue
By Yumiko Locussol
On May 28th, the Trade Ministers of Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and the United States met at the Organization of American States (OAS) in Washington, DC, to sign the Central American Free Trade Agreement (CAFTA). When the signatories arrived, they were greeted by a crowd of about 60 protesters strongly opposed to the trade agreement. Stationed in front of the OAS, they came prepared with chants, signs, bullhorns, plastic gallon jugs filled with coffee beans, and anything else that would make noise and catch a passerby’s attention. Also present was a "Trojan Calf" made of papier mâché, a symbol of what CAFTA represents to small farmers. Although promising benefits for all, CAFTA, once applied, will translate into higher profits for big corporate companies and deprivation for small farmers in both Central America and the United States.
If CAFTA is ratified, the effects on all but the corporate giants will be disastrous. Although the majority of the trade barriers have already been abolished between the US and Central America, this new agreement will strongly affect investments, services and intellectual property rights. Supporters of the agreement claim that improving investment rules will attract more Foreign Direct Investment (FDI), which will lead to economic growth. For long-term development, however, poorer countries need stable investments, not volatile capital that can disappear just as easily as it comes. While these new rules will benefit big investors, governments will lose their ability to decide how to use foreign investment for development. The 1997 financial crisis in Asia is an example of the damage this type of liberalization can have on a country.
CAFTA will also result in liberalization of service markets, meaning that foreign corporations will be encouraged to provide such basic services as utilities and public health. Often, because of the privatization of these services, the poorest citizens cannot even afford to pay their electric or water bills. Consequently, many will be deprived of their basic rights, as the goal of these corporations is to maximize profit, not to meet people’s fundamental needs. Intellectual property rules give the clear advantage to business by extending medical patents, thereby ignoring the real needs of the population. This is a serious problem with regard to the international AIDS crisis.
Other issues include the fact that under CAFTA, there will be no improvement in the area of labor and environmental standards. Although this trade agreement could be used to impel the Central American countries to implement labor laws that are in accordance with the international labor standards, CAFTA doesn’t require labor law reforms. It only asks that the countries enforce existing flawed laws, which are notoriously ignored, without effective measures for doing so. Small farmers will be crushed by competition as there is no way they can compete with huge corporations that generate millions of dollars in revenue while at the same time receiving subsidies from the U.S. government.
All these predictions are not based on mere speculation but rather on past experience. Indeed, the effects of free trade agreements have been made clear during the past decade as we have seen NAFTA lead to massive job loss, deterioration of public services, and the fall of small farms in Canada, the US and Mexico. Congresswoman Hilda Solis (D-CA) articulated her disapproval in a fiery statement, in which she explained, "In signing CAFTA, the Bush administration has ignored the mistakes of the North American Free Trade Agreement (NAFTA) and granted a gift to corporate interests who prioritize access to cheap labor, not protecting working families in the United States and Central America."
Many organizations and groups around the US and in Central America have also expressed their opposition to CAFTA. One of these is the national League of United Latin American Citizens (LULAC), which passed a resolution to resist the passage of CAFTA. Jaime Martínez, president of the César Chávez LULAC Council in San Antonio, said, "The Latino community recognizes that you have to have trade, but it has to be fair."
This is the position of many who have shown resistance to the agreement. Although it is easy to label them as people who oppose everything, this is a misrepresentation of their position. Groups such as the Nicaragua Network support a people-centered globalization based on the idea that trade, as long as it respects the rights of all the participants, is welcome. CAFTA does not ensure the rights of the participants on any level; even within the negotiations, the Central American countries were strongly out-weighed by the U.S. in both political and economic might. At this point, the Central American economies are not developed enough to compete in the global market. Neoliberal economic theory claims that the best way to develop is by participating in free trade and by following the path of more developed counterparts. However, it fails to mention that today’s developed nations reached their level of maturity through protectionism, and that only when their industries were strong enough did they enter the world market.
The battle is by no means over! On the contrary, it is important that you contact your member of Congress and tell him or her to say no to CAFTA. Although the trade representatives have signed the agreement, in order for it to be implemented, it must be approved by our Congress and by the National Assemblies of all the other countries. If there is enough opposition in Congress now, there is a chance that George W. Bush will not try to push it through before this year’s U.S. elections. That would be a welcome, if temporary, victory. The fight against CAFTA will continue!
The Capitol switchboard is 202-224-3121. To save on long distance charges, you can call the local offices. Also, check www.stopcafta.org for more info and organizing ideas.