What is the U.S.- Central American-Dominican Republic Free Trade Agreement (DR-CAFTA) and why should we oppose it?

The U.S.-Central American Free Trade Agreement (CAFTA) is a free trade agreement between the U.S. and the five Central American nations of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica, as well as the Domican Republic. DR-CAFTA was ratified by the legislatures of the US, Honduras, Guatemala, Honduras, Nicaragua and El Salvador in 2005. In 2007, a DR-CAFTA was ratified by a popular Referendum in Costa Rica, thanks to vote-buying, fraud, manipulation, and lies by its supporters--- including the Bush administration.

DR-CAFTA is an extension of the North American Free Trade Agreement (NAFTA) to include Central America and its implementation is seen key by the Bush administration and multinational corporations in obtaining the Free Trade Area of the Americas (FTAA), which would cover all the countries in the Western Hemisphere except Cuba. It will also help build the economic framework for Plan Puebla Panama (PPP), a 10-year long mega development project that will construct industrial infrastructure throughout the region. Civil society groups have protested the PPP because of the probable devastating impact that it will have on the environment, indigenous communities, and local economies.

Since President Bush announced his intention to implement CAFTA in January of 2002, very little public information has been released. The U.S. has released its objectives for the negotiations, but not its official negotiating positions. Public hearings were held in November of last year and a Congressional Oversight Group for CAFTA, FTAA, and other free trade agreements has been set up, but genuine input and participation in the negotiations by civil society groups in the U.S. and the five Central American countries is non-existent. At the same time, the U.S. Business Roundtable and financial elites in Central America have constant access to their government negotiation teams and trade ministers. The nine rounds of CAFTA negotiations will held in secret.

DR-CAFTA will have the following consequences:

Privatization of Public Services:
A key component of free trade agreements is the privatization of public services. The logic of neoliberalism (corporate globalization) that drives these agreements sees government subsidies and support of public services such as water, education and healthcare as unfair "barriers" to trade and competition. However, privatization benefits only a tiny political and economic elite at the expense of the general public. Privatization has meant higher prices, poorer service, union busting, and worsened working conditions. Under CAFTA the state run health care, education, electrical generation, and water systems could be privatized and sold off to multinational corporations.

Increased Corporate Power, Erosion of Democracy, and Lack of Transparency:
Working hand-in-hand with privatization, free trade agreements like CAFTA would weaken regulatory measures and open the way for increased corporate exploitation in Central America and the U.S. The examples of Enron and WorldCom show how corporations in the United States use the deregulated "free" market to destroy lives in the name of profit. It is no coincidence that Enron - facing scandal in the US - is setting up shop in Nicaragua and other countries in the Global South. CAFTA will give companies free reign in Central America, obliterating the democratic process by robbing citizens of the power to shape their own destinies.

Additionally, CAFTA contains the Chapter 11 investor rights provision of NAFTA. This would allow foreign corporations to sue national governments for laws or regulations that were shown to have caused a loss in actual or even potential future profits. A secret tribunal whose members would be unknown to the public would hear such cases. Their rulings could not be appealed and would overrule existing local, state, and federal laws and international agreements on labor and human rights. Such elements of CAFTA would erode democracy and allow for decisions to be made behind closed doors that would affect the lives and well being of millions people. The U.S. is pushing NAFTA like investor state dispute mechanisms in the FTAA, so we can also anticipate these in CAFTA .

Destruction of agriculture and small farmers:
CAFTA would remove all tariff barriers the 5 Central American countries now have on imported agricultural products. This would allow cheaply grown and heavily subsidized U.S. corn and other basic grains to flood local markets. Small farmers in Central America, already devastated by the importation of cheaply grown U.S. basic grains, years of drought, and the massive fall of coffee prices on the world market, would face the extinction of their livelihoods. Under CAFTA millions would be forced to migrate to large urban areas to work in the informal sector or maquilas (sweatshops), or they would risk their lives in dangerous journey north to seek work in the U.S., facing a harsh anti-immigrant climate.

Weakening of laws protecting workers rights and the environment:
Laws protecting labor and human rights and the environment would be greatly weakened. The past few months have seen large-scale governmental assaults on public sector unions in El Salvador trying to stop the privatization of the electrical generating and public health care systems. Workers have been violently attacked by riot police and their rights under the Salvadoran labor code and constitution trampled upon in an attempt to bust their unions. In Guatemala union members, peasant organizers, and human rights activists face an increasing climate of government repression, including murder and kidnapping. Social movements and unions are also under attack in Honduras and Nicaragua.

Laws protecting labor and human rights in Central America could be overturned. Claims by the U.S. and Central American governments that workers rights will be respected and protected under CAFTA seem farcical given the current repression now occurring in the region.

Moreover, Central America is one of the most biologically diverse areas in the world, containing thousands of diverse and unique species of plants and animals. Laws protecting the environment could be gutted, declared as an impediment to the potential profits earned by foreign corporations. The corporations could then sue national governments under Chapter 11 provisions. Under NAFTA the Mexican state of San Luis Potosi was forced to accept a toxic waste site run by the U.S. Metalclad corporation. The Mexican federal government also had to pay the corporation $16 million in damages.

Social movements resist CAFTA:
Throughout Central America labor unions, peasant organizations, indigenous and women’s groups, and other social organizations are actively resisting CAFTA. On October 12, 2001 at least 40,000 people organized coordinated protests through the region, blocking key points of the Pan American highway and border crossings. Since October there have been 4 massive marches of at least 100,000 people each by social organizations in El Salvador protesting the attempt to privatize the public health care system. A Central American wide coalition of trade unions, peasant and indigenous organizations, women’s and environmental groups, and non-governmental organizations have joined together to fight CAFTA. They are struggling for their self-determination and to defend alternative models of social and economic development benefiting the majority of people in their countries and not multinational corporations.

Note: This piece incorporates previous materials on CAFTA created by the Committee in Solidarity with the People of El Salvador.

Who to Contact:
Contact your Representative and Senators by fax, phone, or email. Let them know how you feel about DR-CAFTA and demand that they work to repeal it..
To find out their contact information, visit http://snipurl.com/leglookup.