FTA walks the tightrope
Although some Central American
Costa Rica and United States are the principal nations impeding the ratification of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA).
Central American governments and businesses have been the agreement’s principal supporters since negotiations began in 2003, considering it an opportunity to force the consolidation of a benefits that the United States awarded unilaterally to this region under the Caribbean Basin Initiative during the 1980s.
They also assume that the agreement will present a way to combat the precarious socioeconomic conditions that endemically plague the majority of the approximately 35 million Central Americans. The region’s poverty level registers between 70 and 80 percent, and extreme poverty levels between 30 and 40 percent.
Governments and managerial leaders applaud the CAFTA, and claim that without the agreement, Central America will continue in poverty, failing to generate enough employment in order to improve the quality of life for its residents, increasing the flow of undocumented emmigrants leaving their countries to be a part of the "American dream". .
They consider it crucial that the national congresses ratify the agreement quickly that has been on the table since May of 2004. Since December 2004, the legislatures of El Salvador, Guatemala and Honduras have approved the agreement.
However, social organizations throughout the region have expressed a different sentiment. Street protests, petitions and forums have served as avenues for various groups to voice their opposition to commercial agreement with the United States, which receives 50 percent of region’s exports.
The opposition warns that the treaty will generate even more poverty in the region. One example they cited was the possible fate of Central America’s small and medium-sized agricultural producers who will be unable to compete with their subsidized United States counterparts, risking their disappearance.
This, and similar scenarios were presented to governments of Costa Rica, Nicaragua, the Dominican Republic and the United States, so that they would not ratifiy the agreement.
Still, the main obstacles facing the agreement’s ratification now come from the United States and Costa Rica.
Costa Rican President Abel Pacheco — who does recognize that the agreement could be used as an instrument to "end Costa Rica’s underdevelopment" — has been pressuring the Legislative Assembly (unicameral parliament) to approve a law for tax reform for the past two years.
Pacheco, who maintains that the law utilizes the theory that "the rich will pay like the rich", points out that in order for the agreement to be approved, all Costa Ricans must benefit, not a select few.
According to Pacheco, if the agreement is to be ratified by his country, "it must benefit all Costa Ricans, especially the poor, and one of the ways to overcome this obstacle is, a real Costa Rican tax system".
Pacheco said that he is in agreement with what the clergy have expressed. In May, bishops asserted that the agreement’s content must be outlined by a strict ethical code.
The bishops delivered a document to Pacheco that stated: "the parameter of the free trade agreement should be how it affects the lives and dignity of the poor workers and other vulnerable sectors."
These populations’ voices should "be listened to carefully" and "the excluded should be legally protected", their statement read.
"The human being must be the center of all economic activity," so that "people’s dignity, including all their rights, is respected," the clergymen said.
One ecclesiastic voice markedly critical of the agreement is that of Honduran Cardinal Óscar Andrés Rodríguez, the archbishop of Tegucigalpa, for whom the free trade agreement cannot exist if it only benefits one sector of society (the one with power) over another.
Rodríguez finds it impossible "to speak of free trade with protectionism."
In free trade, if you " do not want any subsidies in Latin and Central America, you must remove all subsidies," the cardinal said.
The view in the United States also is not one that is clearly in favor of the agreement’s ratification by Congress as many legislators respond to production sectors, such as the sugar and textile industries. Many labor and human rights organizations are voicing a strong opposition to the agreement.
One principal concern is the fact that Central American workers are considerably cheaper than American workers are, putting US employees in danger of losing their jobs.
The organizations that comprise the Central American Syndicated Platform have announced that the actions approved this year will "make history".
According to José María Amaya, executive secretary of the El Salvador Popular Social Bloc, action will be taken in the countries that have not yet ratified the treaty, activities that include "taking to the streets."