Campesinos will be the most affected by free trade accord with the United States.
Eulogio Balán Bay has spent his 78 years working the land in San Martin Jilotepeque, in the highlands of Chimaltenango department in central Guatemala. Like many Guatemalan farmers, Balán Bay plants mostly subsistence crops, dedicating most of his small plot to corn, coffee, fruit and vegetables for his family.
Bálan Bay knows very little about the negotiations on the Central American Free Trade Accord (CAFTA), despite the fact that small producers like him will be the mot affected by this treaty that aims to open the doors of the region to U.S. products.
"If I can’t plant corn, then I will plant something else," said Bálan Bay.
Nevertheless, economic and social analysts fear that if the United States negotiates the duty-free entry of subsidized corn and other basic foodstuffs that Central America also produces, many small farmers could go bankrupt as has occurred in Mexico since the signing of the North American Free Trade Accord almost ten years ago (LP, Sept. 24, 2003).
Chapters on electronic services and intellectual property have been concluded and negotiations on industrial products are nearly finished but the textile sector and the agriculture are the final battlefields in the CAFTA accord.
In the seventh round of CAFTA negotiations between the United States and the Central American block – made up of El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica – held in Managua from Sept. 15 to Sept. 19, the issue of agriculture was barely touched upon.
Garments currently comprise the most important source of income for exports from Central America, while agricultural products are second. These two sectors employ hundreds of thousands of mostly poor people in Central America.
According to the Second Report on Human Development in Central America and Panama of the United Nations Development Program (UNDP), this "still represents a situation of vulnerability, since textiles and agricultural products for export are subject to strong pressures by the United States and investment in (the industry) of maquila is characterized as being very volatile."
While the negotiations are scheduled to conclude on Dec. 13, Jorge Mario Salazar of the Council for Central American Development Research (CIDECA) and member of the Mesoamerican Initiative on Trade, Integration and Sustainable Development (CID), is concerned that the different countries and economic sectors of Central America still have not agreed on an agricultural proposal.
"The agricultural issue has been the big stick of the negotiations," Salazar said.
In June, the former chief negotiator of CAFTA for Guatemala, Salomón Cohen, fielded strong criticism for his proposal to give the Central American market immediate access to 95 percent of U.S. products. The proposals of other Central American countries ranged between 45 percent (Nicaragua) and 75 percent (Costa Rica).
"The Guatemalan proposar was a disaster," Salazar said. "After that there’s no going back."
In the sixth round of negotiations, held from July 28 to August 1 in New Orleans, the United States presented a proposal that included immediate access to the Central American market for yellow corn, temperate climate fruits and beef, meaning that the same products produced in Central America would face stiff competition.
Although it was thought that the battle over agriculture would take place in the seventh round, negotiators only agreed on deadlines for lifting duties for different categories of agricultural products but they failed to define in which baskets each of the export products would fall.
For Guatemala, where corn is the most important foodstuff and the main crop of many farmers, there is concern among campesino and rural development organizations about the future of small producers and food security in the countryside under the rules of the CAFTA (LP, Aug. 20, 2001).
In 1994, Guatemala imported US$22.8 million in corn from the United States and by 2002, the figure had reached US$72.1 million, according to the Bank of Guatemala. In this period, the trade balance between the two countries was US$366 million in favor of the United States.
Complaints are growing about the hefty subsidies given to U.S. and European Union farmers, as was demonstrated in the failure of the last round of negotiations of the World Trade Organization (WTO) in Cancún. (LP, Sept. 24, 2003). This strong domestic aid to big U.S. producers has resulted in overproduction and the phenomenon of dumping, or the flooding of low-price products into markets of developing countries.
At the same time, the barriers that limit the entry of products into the United States remain strong. These barriers are often ignored by negotiators of trade accords and include intermediaries, pest control rules and physical access to markets.
"The producers of San Martin have to use intermediaries because there is no direct access to the market and it is in this situation that the producer earns the least," said Celso Bálan, son of Bálan Bay.
Celso Bálan explained that in order to take advantage of the international market, the farmer has to cultivate an area of land much larger than that owned by the majority of producers in order to meet the quotas required by the exporting companies.
Besides, the investments required to comply with pest control rules imply an expense that is too high for the small producer, he said.
Salazar said that to achieve a better balance in competition for Central American products and avoid the collapse of the region’s agriculture, the United States would have to provide technical and development aid to Central America and modify its sanitary rules.
"If the Central American agricultural sector loses, the United States loses as well," Salazar said, recalling that one of the main U.S. policies towards the region is to stop illegal immigration. "If there is no work and they can’t sell their products, all these people will go north," he said.
This is a phenomenon well known by campesinos. "The best lands have been abandoned," Bálan Bay said. "Now the young people are going to Guatemala City to work or they go to the United States. They return with money and a car and then they leave again."