The Central American Free Trade Agreement

international | economy | opinion / analysis Tuesday May 10, 2005 21:11 by Ella Powers - NAF

Analysis from USA anarchists

The Central American Free Trade Agreement (CAFTA) was signed last year by Bush administration officials after trade ministers in El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic completed negotiations with the United States. (CAFTA is modeled after the North American Free Trade Agreement, NAFTA, but will include both goods and services.)

Under CAFTA(as under NAFTA) laws protecting labor, the environment and consumers would be in jeopardy if they are seen as 'barriers to trade'. The oversight of these agreements is outside of state and local governance, and unelected trade tribunals operating on the investment rules of specific trade agreements. Lawsuits related to free trade under NAFTA are costing U.S., Canadian, and Mexican taxpayers millions of dollars and jeopardizing our ability to maintain basic human rights. CAFTA will likely be submitted to the Congress for ratification this spring, as soon as its supporters feel they have a potential majority. As the ratification process begins, we must hold our elected Oregon representatives accountable and urge them to vote 'no' on CAFTA.

NAFTA resulted in the loss of 900,000 U.S. manufacturing jobs; at least 14,000 of these job losses occurred here in Oregon. One recent example of how free trade policies are affecting Oregon is the closing of the Amalgamated Sugar Company’s beet processing operation in Nyssa, OR. A press release from Amalgamated stated "trade pressure from foreign producers" as a major factor in the decision to close the plant that has operated for 67 years and employed between 167 and 260 Oregonians. The consequences of NAFTA on the Mexican economy are just as dramatic. Large corporations have effectively decimated small and medium sized businesses. 1.5 million agricultural workers have been displaced. Farms were run out of business by subsidized corn from the United States. Now, deprived of their livelihoods, these Mexican farmers have become economic migrants in search of maquilla jobs. They are making increasingly desperate efforts to cross the border into the U.S. Workers in both the U.S., Canada and Mexico have suffered under NAFTA. CAFTA will prove to be even more devastating.

Under NAFTA, our public services and crucial social, labor, and environmental regulations have been under constant attack from greedy corporations. Closed trade tribunals rule on law suits concerning state and local policies that corporations see as 'barriers to trade'. Recent cases involve UPS, Metalclad and the Canadian Cattle Association. UPS is seeking $160 million in compensation from Canada, claiming that its government-run parcel delivery system undermines UPS market share. Canadian cattle producers are using NAFTA to demand $300 million in compensation from U.S. taxpayer funds, claiming that the Canadian cattle import ban instituted after mad cow disease was found in Canadian beef violates their NAFTA rights.

Under NAFTA Metalclad sued the Mexican government after the municipality of Guadalcazar denied Metalclad a construction permit. Metalclad wanted to build a toxic waste disposal facility on a site that was already contaminated with 20,000 tons of toxic waste, but the community wanted the area cleaned up before any new facilities were permitted. Metalclad was awarded $15.6 million in compensation, to be paid by the Mexican government. With only 11 of the 42 cases finalized, some $35 million in taxpayer funds have been granted to these five corporations that have succeeded with their claims. An additional $28 billion has been claimed from investors in all three NAFTA nations. Seven cases against the United States are currently in active arbitration.

CAFTA actually poses an even greater threat than NAFTA because it includes not only the movement of goods across nations, but also the trade of services-mail delivery, etc. Services make up 70 to 80% of the US economy. Under CAFTA, governments are prevented from placing regulations that are deemed more burdensome than necessary to business. Regulations regarding where services can be provided, such as laws restricting urban growth, development in sensitive ecological areas, or toxic waste disposal, would be subject to challenge under this language.

Privatization of public services and deregulation are a central component of CAFTA. Already, multinational corporations are lobbying to gain access to postal, health care, educational and utility services in an effort to expand their businesses. State laws and municipal policies are frequently attacked as 'barriers to trade' or 'state monopolies'. The current campaign to privatize social security is part of this trend. Profit, instead of quality, is the goal in this ideological framework. Deregulation and privatization would seriously compromise and in some cases abolish, the enforcement of laws intended to protect our basic human rights such as health care, water, and education. These services should not be included in any trade agreement.

In Portland a coalition of labor, environmental, student and community groups has formed to work against the passage of CAFTA. Since President Bush is not likely to submit CAFTA to the Congress for ratification until he thinks it will pass, we are working to make sure he can’t count on any votes from Oregon. Currently, most of Oregon's congressional delegation remain undecided on the agreement. To date, Oregon Reps. Peter DeFazio, Darlene Hooley and David Wu have come out in opposition to Senators Ron Wyden and Gordon Smith remain noncommittal. We urge them to step up and do the right thing, by opposing the agreement. We must keep putting pressure on them until they do.

To contact your representative go to: http://www.unionvoice.org/campaign/No OnCafta *Representative Earl Blumenauer (if you live in OR, and in district 3) *Representative Greg Walden (if you live in OR, and in district 2) *Senator Gordon Smith (if you live in OR) *Senator Ron Wyden (if you live in OR) To get involved locally in the fight against CAFTA, contact CBLOC\PCASC at 503236-7916. Rep. Blumenauer and Sen. Smith have announced plans to co-host a forum on trade and its effects on Oregon's economy, with panels of experts from business, labor, environmental and governmental organizations on Monday, May 2, from 9 AM to Noon at the University of Portland at The Buckley Center. Show up at 8:30 outside the event to hear speakers addressing CAFTA specifically.

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