Thursday, June 30, 2005


CAFTA will proceed; the workers be damned

Let me say before uttering another foul word about CAFTA, the Central American Free Trade Agreement, that it is not a big deal for the U.S. as a whole. Big Sugar is the primary industry squealing like a pig, and I have doubts that even they will be as greatly affected as they fear if the deal goes through (which it almost certainly will).

Naturally when we think of CAFTA we think of NAFTA, the agreement among the U.S., Mexico and Canada. But CAFTA is really in a different league—the little league to be exact. Some talking-head recently remarked that the combined economy of the six countries involved—Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic—is approximately that of a mid-sized American city.

But proponents of CAFTA hope to use it as a model for a very large trade deal with South America, which would be devastating on a number of fronts. And of course these proponents, in order to make their case, have to lie and "disassemble" like a Bush.

Larry Margasak of the AP has just disclosed that the Bush administration has been hiding a report paid for by the Labor Department since the spring of 2004. The report "supported Democratic opponents of the Bush administration's new Central American trade deal." Surprise, surprise!

The studies, paid for by the department, concluded that several countries the administration wants to be granted free-trade status have poor working conditions and fail to protect workers' rights. The agency dismissed the conclusions as inaccurate and biased, according to documents reviewed by The Associated Press.

"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 studies' conclusions contrast with the administration's arguments that Central American countries have made enough progress on such issues to warrant a free-trade deal with the United States.

But Tuesday a report was released in a very timely fashion by the World Bank, headed by Paul Wolfowitz. It concluded—surprise, surprise!—that CAFTA "will help more people in Central America and the Dominican Republic than it will hurt."

How will it do this? Prices, silly.

... the World Bank report found that 90 percent of households in Nicaragua, 84 percent in Guatemala and 68 percent in El Salvador would benefit from lower food prices.

Economists have apparently never been able to get their minds around a very simple truth—if a person has no money, price makes no difference. And that is exactly the state many current workers in Central America are going to find themselves in after the capitalist rape of their countries. Still, food-relief organizations should benefit.

Yesterday the Senate Finance Committee passed the pact and it may come up for a Senate floor vote as early as today. Anita Kumar of the St. Pete Times is reporting that Florida's newly minted Senator Mel Martinez doesn't know which way to whore—

With his top trade priority on the brink of failure, President Bush could not have been more clear with Sen. Mel Martinez at a recent White House meeting: He wants Martinez's vote.

But Martinez made no promises. The reason: sugar.

His biggest campaign contributor.

Martinez said last week that he doesn't know how he will vote and that he is studying the agreement and trying to work out a deal with sugar that would enable him to support CAFTA.

"I'm weighing it carefully, trying to find a compromise," he said.

What he's weighing carefully is how to retain all that moolah while voting against his biggest briber. Folks who pay to play expect a little quid pro quo when the chips are down.

Passage of the trade pact is also vital to George Bush's ego, so he's pushing it for all he's worth, which is of course very little. For George this requires making it a matter of national security—

Casting the issue in terms of national security, Bush argued that “strengthening our economic ties with our democratic neighbors is a vital issue of national importance,” and that CAFTA would promote stability and prosperity in the hemisphere, as well as reduce immigration from Central America.

Just as NAFTA has done for Mexico, right?

The Bush administration intends to exert maximum political pressure to produce a win because it fears if a high priority agenda item like CAFTA goes down, it will signal that the Lame Duck phase of Bush’s presidency has really begun. Also, the defect of CAFTA would dissipate the already flagging momentum behind the Free Trade Area of the Americas (FTAA), signifying that the President’s trade efforts (a huge chunk of his legislative “must list”) are dead in the water.

If there were no other reasons to oppose CAFTA, those two would be sufficient. But there are plenty more—

The opposition correctly argues that CAFTA will exploit Central American laborers, and at the expense of American workers. But media coverage of the measure has been disturbingly one-sided. Numerous high-flying analysts, exalting free trade as the savior of the world’s struggling economies (but not necessarily for free), are reluctant to delve below CAFTA’s glittering surface and scrutinize the baleful realities of similar arrangements in the past. More often than not, they turned out to be non win-win situations, with the winners and losers entirely predictable. In 1994, almost this country’s entire army of economic consultants and the U.S. Chamber of Commerce exuberantly insisted that the North American Free Trade Agreement (NAFTA) would create high-paying jobs for American workers and dramatically improve living standards in Mexico. However, a decade later, most Mexicans have seen little such prosperity, as almost one and a half million farmers have lost their land; NAFTA is also believed to have caused the loss of more than 900,000 jobs here because many U.S. businesses have moved south (and to China) in search of cheaper labor.

The U.S. Chamber of Commerce has come out with the far fetched claim that CAFTA is necessary in order to “level the playing field” for U.S. workers and enterprises. However, under the present system of tariffs, a number of U.S. crops enjoy heavy subsidies, meaning that independent Central American farmers are simply unable to compete with well-endowed U.S. agribusinesses, the pact’s main beneficiaries.... Arguing that CAFTA will be able to balance intrinsic U.S. trade advantages is like matching a major league baseball team on steroids against Little Leaguers and heatedly insisting that, because the umpires use the same rulebook, somehow it is a fair match.

If you have a Senator or Congressman or -woman in your pocket, please give them a call.

Related post
Lie of the Day (6/20/05)

Follow-up post
CAFTA passes in the night (7/28/05)

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