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CAFTA: Opening Borders to Inequality

President Bush's proposed free trade agreement for Central America will strip national governments of important decision-making powers and hurt vulnerable people.
 
 
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More than a year after its signing, President Bush finally sent the Central American Free Trade Agreement (CAFTA) to the U.S. Congress for vote. On June 30, the Senate approved the agreement with a 54-45 vote.

The reason for the unusual delay between signing CAFTA and congressional action is simply explained -- the president didn't have the votes to pass his pet trade project. Fearing a demoralizing setback, the unpopular treaty sat in the wings.

In fact, the adminstration's intensive special-interest lobbying still hasn't clinched CAFTA's passage in a House floor vote.

But waiting is likely to worsen prospects of approval. A groundswell of opposition is growing in the heartland. Congressional offices have been hearing from thousands of constituents over the past months asking them to reject the trade agreement.

Opposition to CAFTA comes from three main sources. Labor, a traditional foe of free trade agreements (FTAs), has protested the net loss of U.S. jobs and erosion of labor rights and protections that has resulted from free trade agreements. They argue that FTAs create a downward pressure on workers' quality of life in all countries involved and that CAFTA has even fewer labor and environmental safeguards than the North American Free Trade Agreement (NAFTA).

Church and anti-poverty groups protest CAFTA's projected effect on the poor in Central American countries. Like NAFTA, the agreement is expected to concentrate wealth in a region where poverty is widespread -- leading to increased hunger, out-migration and instability.

A third concern is that CAFTA will deepen the U.S. deficit. The record deficit, largely trade-driven, already has the economic community trembling. Free trade has been a contributing cause by generally leading to a greater increase in imports than in exports. A soaring deficit undermines the economy's strength and could mean that future generations will not know the comfort and security that we take for granted.

Part of CAFTA's problem is also the bad behavior of its older brother, NAFTA. After ten years, the NAFTA has failed in nearly every benchmark set for it during the buoyant years of free trade negotiations in the early '90s.

Its major success, not surprisingly, has been to increase trade between Canada, Mexico and the United States. But many people are wondering if international trade in itself is the panacea it's made out to be.

It certainly wasn't for Mexico. There, poverty has grown over the NAFTA decade and real wages fallen. The economy is held together with remittances from economic refugees, especially small farmers pushed off their land. In thousands of rural villages, children cry for their missing parents. A select group of international businessmen has benefited enormously since the agreement but the majority of the population has been left behind.

This experience is not lost on the people of the five Central American countries or the Dominican Republic, due to be united under CAFTA. Although their governments have ratified the agreement, protests continue in the streets. In Guatemala, farmer- and worker-led protests last March triggered government repression that led to injuries and claimed a life.

The dividing line between CAFTA proponents and opponents in these countries is more economic than political -- the rich like it, the poor protest. It's no wonder, since the main, across-the-board effect of the NAFTA-like trade agreements is to widen the disparity between rich and poor.

Protest in foreign countries is often viewed as irrelevant to U.S. policy debates. Historically, even labor opposition to the misnamed free trade agreements has seen foreign workers as the competition. But the CAFTA debate has shown that Northern and Southern societies share a common interest in defeating the agreement.

If the U.S. were to see itself more as a global "good neighbor" -- to borrow from FDR's famous policy in the '30s -- common sense would tell us that it serves U.S. interests to contribute to sustainable and equitable development in these historically tinderbox nations.

By hurting the most vulnerable -- workers, small farmers and women -- CAFTA rattles already shaky structures of governance. By stripping national governments of important decision-making powers for negotiating down foreign debt, implementing national development policies and using generic medicines to treat health problems, it constitutes a setback for democratization.

How much money, how many lives have been lost in regional conflicts that had basic inequities at their root? CAFTA will merely deepen these inequities.

Laura Carlsen directs the Americas Program of the International Relations Center (IRC), based in Mexico City.