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Central America: Free Trade Deal a Dud, Activists Say

by Emad MekayInter Press Service
April 10th, 2003

WASHINGTON, Apr. 10 (IPS) -- Activists from labor, development, human rights and farm groups are calling on the United States and five Central American countries not to rush a trade agreement that they say is undemocratic and would drive farmers and other vulnerable groups deeper into poverty.

The activists from 63 organizations issued an appeal Wednesday to President George W. Bush warning of the grave impacts of the proposed Central America Free Trade Agreement (CAFTA) on farmers, workers and local governments.

The appeal comes on the eve of a visit to Washington by the presidents of the five Central American nations who would negotiate the trade agreement that is set to be signed at the end of this year.

The presidents are Abel Pacheco of Costa Rica, Francisco Flores of El Salvador, Alfonso Portillo of Guatemala, Ricardo Maduro of Honduras and Enrique Bolaos of Nicaragua.

U.S. Trade Representative Robert Zoellick and others in the administration have peddled the agreement as a way to slash poverty and promote development in Central America. The five leaders say the deal would cut U.S. trade barriers to their farm products.

The agreement would open the region's doors to U.S. exports of machinery and equipment, chemicals, plastics, apples, corn, wheat, rice, textiles, clothing and processed food products, while permitting Central American countries to sell products like raw cane sugar, coffee and fish to the United States.

Agriculture employs one-third of the total labour force of 14 million people in Central America, according to the International Labour Organization (ILO).

U.S. exports to Central America have grown 42 percent since 1996 and totalled nine billion dollars in 2001, about the same amount as the country's exports to Russia, India and Indonesia combined. Imports from the region to the United States totalled 11 billion, of which 74 percent entered duty free.

But in their letter and petition to Bush and the five Central American leaders the groups said they have serious concerns "related to civil society participation and transparency in the CAFTA negotiation process".

The groups say that negotiations have been conducted with limited participation of civil society apart from the business sector. They describe plans by the U.S. Agency for International Development (USAID) to hold public hearings on the pluses and minuses of CAFTA in each country as not a "meaningful participation in the negotiating process".

"There are seven months before the target date for finalising the text of the agreement, yet no meaningful process for civil society input in Central America has been established," they wrote.

For example, the parties did not make the negotiating text available to the public - unlike the two drafts of the Free Trade Agreement of the Americas (FTAA), which were partially published on the official FTAA website.

"For any trade agreement to be legitimate, the deadline must be extended, the text made public and the mechanisms created for participation in both the negotiation process and the implementation of the agreement," said Vicki Gass of Washington Office on Latin America (WOLA).

Many of the groups also have concerns about the substantive issues in the CAFTA negotiations, including agriculture and sustainable development, workers' rights, investment rules, protection of traditional knowledge and access to medicines and safeguarding essential public services.

Some fear that the section on labour issues, planned to be negotiated in May, could be signed without any input from labour unions in Central America.

They say that current U.S. trade policy in principle calls for enforcement of international standards on workers' rights, and point out that the provision was exercised when U.S. trade requirements forced Guatemala to reform its labour laws, raise the minimum wage and increase sanctions for workers' rights violations.

But CAFTA does not offer the same remedies, they say.

"New trade agreements accept local labour laws as they are - and local labour law in Latin America is often far below international norms," said Stephen Coats of the U.S. Labour Education in the Americas Project.

"This administration is negotiating trade agreements that will set back U.S.. commitments to protect workers' rights by two decades," he added.

The groups also worry that a contentious provision in the North America Free Trade Agreement (NAFTA), the draft texts of the FTAA and the U.S.-Chile trade agreement that gives foreign investors the right to sue governments over public-interest laws that might undermine their profits will be included in CAFTA.

This condition has been used, for example, against a Mexican community's ban on a toxic-waste dump, against a California law banning a carcinogenic gasoline additive and against Canadian government subsidies to its postal system.

"It is an undemocratic and unfair mechanism that should not be duplicated in CAFTA or any other trade or investment agreement, but all evidence indicates that is exactly what the U.S. negotiators intend to push," said Karen Hansen-Kuhn, trade programme coordinator with the Washington-based The Development GAP.

Some U.S. farmers also oppose the deal. They say that while U.S. exports to Canada and Mexico have grown moderately since NAFTA was signed in 1993, imports to the United States from those countries have grown much faster, and that floods of such imports have resulted in excess supply and sharply declining commodity prices in all three NAFTA countries.

"It (more trade deals) means more farmers off the land ... if you want to keep farmers on the land and prosper, they have to have a price above production (cost), and we don't," said Dena Hoff, a U.S. farmer from Montana and activist with the National Family Farm Coalition.

"I cannot think of a single commodity where we have a price above production."

The groups also took the U.S. administration to task for wanting to sign a trade agreement with governments of countries where human rights are regularly violated.

WOLA says that credible reports have documented government corruption and organized crime involving current and retired members of the security forces in Guatemala.

The group acknowledges the government's recent agreement to establish a commission to investigate illegal armed groups, corruption and organised crime as a step forward, but said much corruption and violations of basic human rights violations are still rampant.

Other groups that signed the petition are Oxfam America, Public Citizen, Concern America, Sierra Club and World Vision.





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