Yes to Democracy, No to Free Trade

By Deborah James, AlterNet. Posted May 31, 2005.

U.S. Secretary of State Condoleezza Rice recently toured Latin America to promote the "twin pillars of democracy and free trade." Latin Americans, on the other hand, have recently demonstrated that their commitment to democracy is not synonymous with a belief in the so-called benefits of globalization. After two decades of "free trade" economic policies that have failed to eradicate poverty in Latin America, citizens are instead electing governments that advocate for the needs of the majority for health care, education, good jobs, and social security.

During the 1960's and 70's, Latin Americans experienced an average 80% gain in income per person. Not so with the following two decades, when per capita income grew by only 11%. For the last 25 years, Latin American governments employed economic policies mandated by the Washington-dominated International Monetary Fund and the World Bank. After 25 years of privatization of essential public services, de-regulation of industry, and opening up borders to foreign investors, the majority of Latin Americans have less economic opportunity than their parents.

The cure offered by the U.S. to this economic malaise seems to be more of the same. May 28 marked the one-year anniversary of the signing of CAFTA, the Central America-Dominican Republic-United States Free Trade Agreement. Supporters hoped that the deal would have been approved by Congress long ago. But Republicans aren't likely to send legislation to the Congressional floor that they aren't sure they'll win. So far, most estimates give CAFTA opposition -- which now includes many Republicans -- a significant lead. Even pro-free trade Democrats have come out to oppose the deal, and this week the Hispanic Caucus voted 14-1 against it. That means that CAFTA will likely be a huge political defeat for the Republicans.

The Bush Administration has pulled out all the stops in attempting to convince the U.S. public that Central Americans want CAFTA, sending Central American Ambassadors, then Trade Ministers, and recently even their Presidents across the U.S. on pro-CAFTA tours. But anyone with an ear to the ground in Central America knows the opposite; these deals are fiercely opposed by Central American farmers, workers, women, environmentalists, people of faith, youth, and more -- pretty much every group except for the elite business sector.

Even the existence of CAFTA is a manifestation of the diminishing popularity of so-called "free trade" and the erosion of U.S. influence in the area. For the last ten years, the U.S. had negotiated a Free Trade Area of the Americas with 34 countries in the region. But negotiations faltered as many South American nations, including Brazil, Venezuela, and Argentina, resisted the U.S. demands that they hand over their public services, investment, and other key sectors while the U.S. maintains unfair agricultural subsidies that block market access for their exports. When FTAA talks broke down in 2003, the U.S. launched a "divide-and-conquer" strategy, hoping to secure agreements with the weaker countries of Central America and the Andean nations (currently under negotiation). So CAFTA is supposed to be a stepping-stone to the FTAA, but it is one that is likely to crumble under our feet.

Deborah James is the Global Economy Director at Global Exchange, an international human rights organization.

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