| CAFTA
Cheat Sheet
What
is CAFTA?
The
Central American Free Trade Agreement is a proposed commercial pact
between the United States and five countries in Central America:
El Salvador, Guatemala, Nicaragua, Honduras and Costa Rica. CAFTA
is modeled after NAFTA, and is part of a bigger project to spread
free trade throughout the Americas, called FTAA, Free Trade Area
of the Americas. (www.cispes.org
)
What
does CAFTA entail?
CAFTA
has three main priorities: to open markets, deregulate, and privatize
services. Aspects of the Agreement include:
•
Services: Governments pledge to open services to
private investment
•
Investment: Governments promise to open up to foreign
investment
•
Government Procurement: Governments promise to
open all purchases to
transnational bids
•
Market Access: Governments pledge to open markets
and eliminate
measures that protect domestic products
•
Agriculture: Governments promise to eliminate subsidies
on
agricultural products
•
Intellectual Property Rights: Allows for the privatization
of technological
and indigenous knowledge
•
Antidumping rules, subsidies, and countervailing rights:
Governments
commit to phase out protectionist barriers in
all sectors
•
Competition Policy: Governments promise to eliminate
national monopolies
•
Dispute Resolution: Provides transnational companies
with the right to
sue countries in private international courts
(www.americaspolicy.org
)
Who
objects to CAFTA?
Those
who object to CAFTA tend to object for similar reasons:
•
Fairness: Negotiations between
nations with unequal economic and political power often emphasize
and exacerbate pre-existing inequalities. Because the U.S. is a
proponent of the treaty, and because the U.S. holds tremendous economic
and political power compared to most Latin American nations, its
needs are likely to be met while those needs of less powerful nations
are less likely to be known. For example, although a feature of
the Agreement is the elimination of subsidies on agricultural products,
“the United States is not renouncing its policy of agricultural
subsidies - $180 billion over the next 10 years – or other protectionist
measures that it considers necessary”
(www.americaspolicy.org.commentary/2003/0302caftacr_body.html
).
•
Democracy:
The White House has asserted that “CAFTA will commit
nations to ‘even greater openness and transparency’ ”
(
www.americaspolicy.org
). However, negotiations to date have largely been kept private,
and “despite demands from watchdog groups, draft texts of the CAFTA
proposal have not been made available to the public in Central America
in the United States” (www.americaspolicy.org
).
•
Sovereignty: CAFTA takes away individual nations’
right and ability to create and enforce their own laws and policies
pertaining to intellectual property rights and the control of markets,
services and subsidies. Nations are subject to lawsuits and prosecution
by transnational corporations if their policies hinder those corporations’
pursuit of profit.
•
Sustainability: Pre-NAFTA
predictions were that “economic integration with Mexico would eventually
lead to an upward harmonization of environmental standards and performance”
(www.americaspolicy.org
). However, items like Chapter 11 of NAFTA, which enables corporations
to sue governments for environmental protections and laws that hinder
free trade and profits, have contributed to this degradation. Many
fear that CAFTA, which is modeled on NAFTA, will have the same policies
regarding the environment, leading to the same outcomes. |
