April 2005
Congressional
Action on CAFTA
Both the House and Senate are holding hearings this month on CAFTA, a trade agreement between the U.S.,
five Central American countries--Guatemala, El Salvador, Costa Rica, Nicaragua, and Honduras--and the Dominican Republic.
A vote on the agreement could come in mid-May.
Hundreds of civil society and faith-based groups have spoken out against this agreement because it fails
to adequately protect workers' rights, food security, and environmental standards, and it limits the ability of governments
and sovereign indigenous peoples to regulate corporations to protect the common good.
Background
"More and more, in many countries of America, a system known
as 'neoliberalism' prevails; based on a purely economic conception of man, this system considers profit and the law of the
market as its only parameters... Indeed, the poor are becoming ever more numerous, victims of specific policies and structures
which are often unjust."
- Pope John Paul II, Ecclesia in America
CAFTA is modeled on NAFTA, the 1993 North American Free Trade Agreement between Mexico,
the U.S., and Canada. NAFTA remains controversial for its inadequate environmental and worker protections
and the displacement of 1.5 million Mexican farmers. CAFTA, in turn, is considered a step toward a Free Trade
Areas of the Americas Agreement (FTAA) encompassing all of Latin America, so the debate around CAFTA has broad implications.
CAFTA arose out of a closed and rushed negotiation
process, pushed through in just one year while NAFTA negotiations lasted seven. This limited time-frame allowed for
very little participation in the process by legislatures or civil society in any of the countries involved.
Yet, as a result of the "fast track" trade authority Congress gave to the President in 2002, Congress is unable
to consider any changes to CAFTA and must simply vote on whether to approve it or not.
While trade can be an important tool for poverty reduction
when understood as one part of a broader agenda of sustainable development, advocates have pointed out several problems with
CAFTA that reveal it to be a poor model for fair trade in the service of human development:
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The agreement fails to hold the Central American countries
to international standards on workers' rights, particularly the right to organize. CAFTA essentially endorses existing
labor laws, which effectively allow widespread anti-union discrimination.
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CAFTA puts the interests of multinational
corporations above the health and well-being of people by threatening the right of governments to regulate the activities
of corporations. For instance, one provision would enable pharmaceutical companies to prevent governments from
ensuring the availability and affordability or medicines.
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While certain environmental provisions are included
in the agreement, it is not clear that there will be any improvement, in practice, upon the currently poor enforcement
of environmental regulations in Central America.
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CAFTA will likely have a devastating impact
on small farmers in Central America. Poverty is concentrated in rural areas in these countries, and
it is worth noting that one-third of the rural poor in Latin America are indigenous, and a large number
of rural households are headed by women. CAFTA would allow heavily subsidized large-scale U.S. agribusinesses to dump
their excess crops in Central American markets, directly threatening the livelihoods of these already vulnerable people.
"Poverty among indigenous populations...relates to the human condition of exclusion and marginalization. It relates
to lack of political participation and effective control over their lives and environments..."
- Statement on Millenium Development Goals and indigenous peoples, Congregation of Our Lady of Charity of the Good
Shepherd and the Elizabeth Seton Federation
