Negotiated by the governments of the United States, Guatemala, Honduras, Nicaragua, Costa Rica, and El Salvador, the Central American Free Trade Agreement (CAFTA) would impose the failed policies of the North American Free Trade Agreement (NAFTA) throughout Central America and the Caribbean. The agreement would undermine workers’ rights, drive countless family farmers off the land and ultimately lay the groundwork for the expansion of NAFTA throughout the hemisphere.
1. CAFTA Expands a Proven Disaster
CAFTA would expand the failed NAFTA model of international trade to five additional Central American countries with plans to include the Dominican Republic already under way. But 10 years of NAFTA have shown just how devastating these agreements can be for working families and the environment. In the United States, over 766,000 jobs have been lost due to NAFTA. In the maquiladora zones along the US-Mexico border, wages are low, union organizing is suppressed, and industrial pollution has dramatically increased cases of hepatitis and birth defects among workers. NAFTA should be repealed, not expanded.
2. CAFTA Contains No Protection for Workers and the Environment
CAFTA contains no meaningfully enforceable standards that might prevent countries from lowering their public health, workplace safety, and environmental laws in order to attract investment. Our experience with NAFTA has shown how corporations use this arrangement to pit workers in each country against one another in a “race-to-the-bottom” in wages and environmental protections. Trade agreements are presented to the public as a vehicle for economic development, but when these agreements fail to condition trade access on enforcement of international labor and environmental standards, only corporate CEOs see the benefits.
3. CAFTA Promotes Sweatshop Labor
CAFTA would ignore standards set by the International Labor Organization and instead require only that countries continue to enforce existing domestic labor laws, regardless of how inadequate these laws may be. In the context of Central America—where laws fall far below international standards and governments are often actively hostile towards unions—this model amounts to no less than a recipe for rampant labor violations. CAFTA will no doubt lead to an expansion of the region’s maquila industry, already one of the world’s most developed.
4. CAFTA Drives Family Farmers Off the Land
Thousands of small family farms in both the US and Central America will be lost because of CAFTA—much like what has already happened to U.S, Mexican and Canadian farmers under NAFTA. Meanwhile, giant corporate farms like ADM and Cargill will be the ones benefiting most from their downfall and the trade agreement. The threat of CAFTA is especially ominous for farmers in Guatemala, where nearly 60% of the population support themselves on agriculture. CAFTA would likely force a massive migration of erstwhile farmers to large urban areas to work in the maquila industry, or to risk the dangerous journey to the U.S.
5. CAFTA Privatizes Public Services
CAFTA investor rules will make it impossible for governments in Central America and the US to give preferences to public service providers. Under CAFTA, domestic regulations protecting people’s right to food, education, health, and basic utilities could be considered “barriers to trade” and open to challenges by multinational corporations. CAFTA would require that governments bid out for services contracts, resulting in price increases, reduced access, and compromised quality that would most severely impact the vulnerable in our society, such as children, the poor, and the elderly.
6. CAFTA Expands Corporate Power
CAFTA would expand NAFTA rules that allow corporations to sue governments over any law that might stand in the way of their ability to profit. These rules have already been used 27 times since 1994 to challenge some of our most cherished public health, workplace safety and environmental laws. The threat of being sued forces governments to either pay large fines or to pass only pro-business legislation.
7. CAFTA Undermines Public Health
CAFTA provisions to protect and expand the patent monopolies of US pharmaceutical companies in Central America will undermine access to affordable generic AIDS drugs and increase the price of medicines. Meanwhile, hundreds thousands of HIV-positive Central Americans are in immediate need of treatment or else they will die. Of the six Latin American countries with the highest prevalence of HIV, four are Central American.
8. CAFTA is a Stepping Stone to FTAA
Passing CAFTA would be a strategic first step towards the larger, Free Trade Area of the Americas (FTAA). The FTAA would include every country in Latin America, and the Caribbean except Cuba. Talks on the FTAA have collapsed in recent months following sustained pressure from the governments of Brazil, Venezuela, and other South American and Caribbean nations. By bullying its smaller CAFTA trading partners into accepting dangerous rules on services, while altogether excluding the issue of agriculture, the Bush Administration hopes to divide the growing coalition of developing countries that oppose it and set a dangerous precedent for its position on FTAA.
9. Opposition is Building
Thousands have been organizing to defeat CAFTA throughout Central America and the U.S. with mass mobilizations in Managua, San Salvador, and San Jose and pickets at the negotiations in Cincinnati, Houston New Orleans, and Washington DC. Following on recent setbacks for the WTO in Cancun and the FTAA in Miami fair trade forces are poised for yet another victory. The defeat of CAFTA could set back the already reeling FTAA process, perhaps for good.
10. We Can Win!
Despite tremendous popular opposition to CAFTA in Central America, it seems clear that most effective way to defeat the agreement will be in the US Congress. Members of Congress have been hearing a lot from their constituents about the negative impacts of free trade. Now more than ever its important that you tell your congressperson to say no to CAFTA and yes to Fair Trade!