Dec. 30, 2005 – Stubborn opposition to provisions of the Central American Free Trade Agreement (CAFTA) will keep the pact from going into effect on the first of the year as planned by the Bush administration. The delay has enlivened efforts to undo the deal by groups who fear the pact could have a crippling effect on workers, small farmers and the economies of the nations involved.
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- Labor Fears Free Trade Deal Will Prompt â€˜Downward Spiralâ€™ (May 25, 2005)
- Despite Broad Opposition, House Passes Free Trade Deal* (Jul 29, 2005)
As part of the proposed pact, which the US House of Representatives approved by only two votes this summer, the US requires the participating nations to enact reforms that appear to favor corporations over individuals. Opponents of CAFTA warn it could lead to greater economic disparity, reduced worker rights, and fewer public services in participating countries. They also fear it could devastate the already-precarious situation of small farmers throughout the Western hemisphere.
Many of the six smaller states â€“ the Dominican Republic, Guatemala, Nicaragua, El Salvador, Honduras and Costa Rica â€“ have failed to come into full compliance with CAFTAâ€™s requirements on the treatment of foreign companies, customs laws, telecommunications services, public-health services and other matters. In addition, Costa Rica has yet to approve the deal.
News of CAFTAâ€™s troubles has sparked renewed hope among opponents that the deal could be significantly altered or ultimately fall apart. In a statement yesterday, the Committee in Solidarity with the People of El Salvador (CISPES), a US-based grassroots group that opposes free trade, joined with the Quixote Center, a nondenominational humanitarian organization, in heralding the delay in CAFTAâ€™s launch.
"From day one the Bush administration has been trying to ram CAFTA down people's throats, with little substantive debate and despite voices of tremendous opposition," CISPES member Burke Stanbury said. "In Costa Rica they have failed, and in other countries it took repression and dirty tactics to ratify CAFTA. But just as Central American social movements continue to resist the imposition of this devastating agreement, we too are not giving up."
Tuesday, the Dominican Republic announced that it would hold off on entering into the trade pact until July.
Other potential CAFTA trade-partner states are facing similar situations, with El Salvador, the nation closest to compliance, recently stating that it will not be ready to join CAFTA until February at the earliest, the CISPES-Quixote Center statement noted.
"The problems associated with implementing CAFTA demonstrate what we've been saying all along: this agreement goes beyond trade in requiring dramatic changes in domestic laws that grant new rights to transnational corporations at the expense of working people," the Quixote Centerâ€™s Tom Ricker said. "The fact that legislatures throughout Central America and in the Dominican Republic are now struggling to change laws governing intellectual property, services, and investment â€“ in order to receive US certification for joining CAFTA â€“ makes clear the undemocratic nature of this agreement."
Domestic opposition to CAFTA in the United States is varied, with labor and public-interest groups taking the lead in working against the measure and some economic analysts predicting that it could be especially disastrous for small farmers.
In light of the news of CAFTAâ€™s delay, a broad coalition of domestic and international groups is mobilizing to undo the trade deal once and for all. In statements and notices posted to its website, the Stop CAFTA Coalition calls for demonstrations against the pact throughout January and provides links and information for interested parties. Planned activities include pickets, petition signings, teach-ins and workshops.
Business and trade groups overwhelmingly support CAFTA. The American Farm Bureau Federation expects CAFTA will bring in about $1.5 billion a year in export sales. In a recent update, the National Association of Manufacturers said the pact will "level the playing field for manufacturers, boost exports and create jobs."
But in interviews with The NewStandard, CAFTAâ€™s critics in the US say that large agribusinesses stand to benefit from the deal at the expense of smaller producers. They have also questioned optimistic export predictions, noting that economies of Central America and the Dominican Republic are simply too small to consume such a significant amount of US exports.
In a statement earlier this month, the US Trade Representative spokesperson Christin Baker said the office would make an official announcement of CAFTAâ€™s status on January 1 and is ready to put the agreement into effect with nations on a "rolling basis" as they implement required reforms.
"We will move forward as long as at least one country is prepared, and will accommodate new entrants as they become ready," Baker said. "We want to reward countries as they become ready and look forward to continued progress with the others. Countries can continue to enjoy existing preferences while they work with the United States to come on board."