CAFTA Primer

CAFTA Proponents, Claim #1

“The proposed free trade agreement with the United States would commit [Central American] countries to even greater openness and transparency, which would deepen the roots of democracy, civil society, and the rule of law in the region, as well as reinforce market reforms” (<http://www.whitehouse.gov/news/releases/2002/01/20020116-11.html>).

CAFTA Opponents, Counter Claim #1

Negotiations for CAFTA have been held behind closed doors, and have not been opened for public review or debate. In fact, “despite demands from watchdog groups, draft texts of the CAFTA proposal have not been made available to the public in Central America or in the United States, stifling open discussion and debate.” Closed-door negotiations and the lack on public input are not indicative of increased transparency and democracy (www.americaspolicy.org/commentary/2003/0301cafta-opp.html <http://www.americaspolicy.org/commentary/2003/0301cafta-opp.html>).

CAFTA Proponents, Claim #2

The United States’ “commitment is to growing and stable economies where the benefits of growth are widely shared; economies where small business owners, and farmers and workers and investors are all able to build and earn their own prosperity. We must foster policies that reward, not punish, entrepreneurship, work and creativity. We understand that sustained development depends on market-based economies, on sound monetary and fiscal policies, and freer trade in our neighborhood” (<http://www.whitehouse.gov/news/releases/2002/ 01/20020116-13.html>). Proponents of CAFTA state that it will lead to better economic opportunities for all involved and to increased living standards and economic stability for people living throughout Central America.

CAFTA Opponents, Claim #2

Research on the effects of NAFTA, the model for CAFTA, show that “three major factors - subsidies, financing, and oligopolies - have created distorted market conditions made-to-order for the world’s most powerful U.S.-based transnational corporations. As a result, small farmers south of the border are being driven off the land” (<http://www.americaspolicy.org/reports/2003/ 0302farm_body.html>). Small business owners, farmers and workers have been hurt by the free-trade policies of NAFTA, while large transnational corporations have benefited. Post-NAFTA, the World Bank claims that 73% of Mexico’s rural population lives in poverty, a significant increase over the pre-NAFTA period, while “transnationals have grown by leaps and bounds under the auspices of the free trade model” (http://www.americaspolicy.org/reports/2003/0302farm_body.html). Clearly, the benefits of growth have not been evenly shared under CAFTA’s model, and it seems unlikely that this will change under CAFTA.

CAFTA Proponents, Claim #3

The U.S. Trade Promotion Authority (T.P.A.) “instructs U.S. negotiators to foster a healthy national economy, freer markets, and improvements in labor conditions and environmental protection.” (<http://www.ceip.org> /files/publications/TED-2003-Feb-CAFTA-and-environment.asp). According to proponents of CAFTA, CAFTA negotiators recognize the importance of promoting environmental protection and sustainable development, and will work to include these goals within the structure of the Agreement.

CAFTA Opponents, Counter Claim #3

Pre-NAFTA predictions were that “it would improve environmental quality in North America, as rising prosperity and governmental coordination led the United States, Mexico, and Canada to strengthen their laws for protecting the environment and public health. Unfortunately, but not surprisingly, exactly the opposite has happened” (<http://www.americaspolicy.org/borderlines/1995/ bl19/bl19kell_body.html>). However, according to the Mexican government, “the economic costs of environmental degradation have amounted to 10% of annual GDP, or $36 billion per year. These costs dwarf economic growth, which amounted to only 2.6% on an annual basis” (<http://www.americaspolicy.org/commentary/2002/ 0210ftaa_body.html>). 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.