7-11-05, 11:53 am

After a shaky start for President Bush’s pet trade project, the Central American Free Trade Agreement (CAFTA), the much-criticized treaty moves to the House of Representatives for a vote later this month.

CAFTA, is a 'free trade' agreement modeled on NAFTA and would remove tariffs and regulations on trade between the US, Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador.

Opponents of CAFTA in its current form and critics of 'free trade' generally describe the treaty as likely to cause future job losses in the US and as a deal that encourages violations of workers’ rights and the elimination of environmental protections in the name of doing business.

Opponents of the measure argue that CAFTA could cost as many as 500,000 jobs in the trading countries in the first few years of the deal alone. They point to the results of NAFTA, the 'free trade' agreement passed in 1994 that includes Mexico, the US, and Canada as an example of what will happen if CAFTA passes.

Some estimates say that over 800,000 US jobs were lost in NAFTA’s first ten years. Additionally, labor protections and environmental laws have been discarded because they are considered 'barriers' to trade. In fact, under free trade agreements corporations in one country are allowed to challenge such laws passed by other countries, claiming unfair trade practices and suing for financial damages from the countries in question.
Currently a case in which Canadian cattle ranchers are suing the US government to overturn the USDA’s ban on Canadian on concerns about 'mad cow disease' and are claiming billions in damages – to be paid by US taxpayers.

Critics of CAFTA foresee similar kinds of attacks on national sovereignty.

To counter criticisms of CAFTA the Bush administration has claimed that stronger labor standards need not be embedded in the language of the treaty because the countries in question all meet international labor standards already.

Unfortunately, this was not the finding of a $700,000 study commissioned by the Labor Department completed in early 2004. According to press accounts, the Bush administration ordered the study suppressed because the findings of the study did not agree with the administration’s line.

'In practice, labor laws on the books in Central America are not sufficient to deter employers from violations, as actual sanctions for violations of the law are weak or nonexistent,' the contractor, the International Labor Rights Fund, wrote in one of the reports.

The Bush administration ordered the report quashed and demanded that the organization conducting the study remove references to it from its website. The administration then took extra steps to prevent the public from learning about the contents of the report.

When Rep. Sander Levin (D-MI) requested access to the report, his request was denied. In May 2004, Levin filed a Freedom of Information Act request for the report, a type of request that forces the federal government to release unclassified information. The purpose of the law is to prevent the government from keeping secrets from the American public.

Levin’s request was again denied. Upon appeal and only after Levin threatened a congressional inquiry did the Bush administration turn over the documents in April of this year – almost one full year later.

In conjunction with the Labor Department’s own study, the AFL-CIO has published a study that shows CAFTA will create more job loss, downward pressure on wages, and violations of workers’ rights. Instead of creating jobs, the AFL-CIO says, CAFTA will give more incentives to U.S. employers to ship jobs overseas and displace many subsistence farmers in Central America, creating widespread job loss.

Weak worker protections in CAFTA countries will create downward pressure on wages and working conditions in the US as employers use the threat of moving jobs out of the country to block union organizing and other demands for better wages and benefits. The same effect will occur in Central America.

Further, moving jobs out of the country doesn’t necessarily create a net increase in jobs in treaty countries, if NAFTA has set any precedent, says the AFL-CIO. Despite rising exports to the United States in Mexico after NAFTA, manufacturing wages have plummeted and the country’s agricultural sector has lost 1.3 million jobs.

In fact, opposition to CAFTA in Central America has centered on this issue. Central American farmers are deeply concerned that their farming sectors will be swamped with cheap subsidized US agricultural imports.

Strong opposition in Ecuador and Bolivia, two countries the Bush administration had strongly hoped would sign onto the deal, forced governments there to either withdraw after political turmoil overthrew the government in Bolivia and threats of similar action took place in Ecuador.

The struggle over 'free trade' highlights the very crucial need for serious solidarity among workers and labor movements across the Americas. Whether or not CAFTA passes, in its current or modified form or at all, it is clear that the fortunes of workers and farmers in the US are bound up with workers and farmers in the rest of the world. Just and fair trade practices depend on the ability of these groups to understand and work with each other to pressure their governments to come to the best possible agreements.

The US Senate passed CAFTA in its current form 55-45 early this month. While the administration claimed a great victory, analysis of the vote shows that passage in the House is much less likely. 10 Republican Senators voted against the administration despite enormous pressure brought to bear on the members of the President’s party. Instead of addressing concerns raised by critics, President Bush undertook a campaign of pressure and deal making to get the votes he needed.

The divisions among the Republicans are even deeper in the House, where Republicans from manufacturing states have their eyes on the 2006 election. Those who end up supporting the treaty are hoping it is far enough away from November 2006 so that their constituents will forget.

Opponents of CAFTA urge the public to make sure they tell their representatives that it doesn't want trade deals that will cost jobs and diminish workers’ rights.



--Joel Wendland can be reached at jwendland@politicalaffairs.net.