in the spirit of cinco de mayo


CAFTA is a “free” trade agreement that includes the United States, El Salvador, Nicaragua, Guatemala, Honduras and Costa Rica. The Dominican Republic may also be added to the group. Negotiations for CAFTA were complete in December and January.

CAFTA must now be approved by the National Assemblies in each of the participating countries. The U.S. Congress will probably debate CAFTA in late spring or early summer of 2004, with a vote possible in June or July.

CAFTA is modeled after the North American Free Trade Agreement (NAFTA). NAFTA has been a disaster for small farmers and working people in Canada, the United States, and Mexico. Hundreds of thousands of jobs lost, family farms foreclosed, and public interest laws overturned or challenged in secret NAFTA courts. Despite this dismal record, the Bush administration is seeking to expand NAFTA to Central America and the rest of the Western Hemisphere.

From the beginning of CAFTA negotiations, the Bush administration has been clear that completion of CAFTA is crucial to move the Free Trade Area of the Americas (FTAA) negotiations forward faster, by adding extra pressure to countries like Brazil, Venezuela and Argentina to either accede to U.S. demands, or be left out.

CAFTA is NAFTA Extended to Central America

All the same issues human and labor rights organizations have with NAFTA (and FTAA) are present in CAFTA, including:

Secrecy Instead of Transparency: No formal public input or oversight in the negotiations.

Corporate Domination Over Democracy: At the expense of democracy and people’s right to self-rule, CAFTA would likely give corporations powers to object to barriers to free trade, including laws people enact for their own protection. For example, NAFTA established the right for companies to sue governments over public-interest laws that may limit their profits. This right has been employed 27 times by companies since 1994.

Increased Inequality: A minority of rich companies and wealthy stockholders will benefit from reduced costs. The poor will get poorer and more people will move into poverty: workers will get lower pay and lose their jobs while shouldering higher costs of living as more services are privatized.

Disappearing Public Services: Resources such as education, health care, energy, and water utilities owned by everyone in a community will more likely become owned by corporations. This could put essential public services out of the hands of many people. For example, When Bolivia privatized its water utility, water rates increased 200 percent, leading to riots that resulted in six deaths.

Reduced Labor Rights: Labor laws such as those that protest worker’s safety can also be challenged and the “race to the bottom” for pay will likely hurt workers in all countries involved in CAFTA.

Negative Agricultural Impact: Increased corporate domination of farms and possible devastation of family farms and farmers in the US and Central America.

Environmental Destruction: Environmental laws are just one types of barriers to trade that can be gutted. This decreases costs to companies but increases costs to local communities which suffer more health problems as a result of pollution.

There is an article on New Orleans Indymedia that covers the many potential negative impacts on communities in Louisiana.

More Info

For more information and analysis, please see our collection of links to CAFTA info on other websites.

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