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Council On Hemispheric Affairs

Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere

Memorandum to the Press 05.57

Word Count: 1750

Analysis prepared by Larry Birns, COHA Director, and Sarah Schaffer, COHA Research Fellow

Tuesday, 31 May 2005

In a last ditch effort by the White House, six Central American presidents visited Washington on May 12 to lobby for congressional backing of the Central America Free Trade Agreement (CAFTA), which would eliminate all bilateral trade barriers to the U.S. and those protecting Central American markets.

In spite of massive protests by labor rights groups throughout the hemisphere, the Bush administration hails CAFTA as a solvent to spread democracy and fight poverty.

CAFTA is Washington’s answer to the perceived threat to the U.S. economy posed by South America’s new-left movement and China’s growing industrial power and its search without respite for new energy resources.

If NAFTA is to serve as the model to CAFTA, rough times lie ahead for Central American farmers and day workers.

In an unprecedented trip on May 12, the presidents of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua visited Washington to lobby for Congressional approval of the Central America Free Trade Agreement (CAFTA).

The agreement, which would remove virtually all trade barriers on goods entering the U.S., purportedly aims to better lure outside investment to the area by opening up Central Americaís market to the U.S by means of the use of bilateral trade preferences. CAFTAís U.S. proponents hail it as one of Washingtonís important answers to threats to its economy posed by Chinaís growing trade preeminence.

But according to its critics, those U.S. businesses likely to benefit will do so at the expense of impoverished Central Americans. The House leadership hopes to bring CAFTA to a vote before the end of July.

The mission of the Republican Speaker is to present the trade pact as a win-win arrangement: good for Central America and good for the U.S. In fact, this is no small task since CAFTA by no means provides a win-win situation for all sides. Rather, it is not good for the U.S. family farmer or his Central American counterpart. It is good for Central American maquiladora assembly plant operators but not necessarily their workers a percentage of whom will be paid slave wages of around a dollar a day.

Nor should CAFTA have any appreciable impact on the flow of tens of thousands of area refugees seeking a living wage who monthly head for illegal entry to the U.S. If CAFTA will help the poor, why have so many workers throughout Central America demonstrated against its passage both in the streets of their hometowns or by migration northwards.

Full article…

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