New disputes are calling into question what the Central American Free Trade Agreement will look like in practice.
Published in The Nation.
A year ago the Central American Free Trade Agreement (CAFTA) was a corpse. The Bush Administration resurrected it with the darkest of political sorcery. And now the lumbering beast is growing ever more monstrous—and arousing new controversy.
On March 1, two months after the planned January implementation date for the trade deal, CAFTA goes into effect between the United States and El Salvador. Yet for the five other countries that are party to the treaty—Costa Rica, Guatemala, Honduras, Nicaragua and the Dominican Republic—a starting date remains undetermined. In past months, contentious debates about the implementation of the agreement have triggered new protests throughout Central America, calling into question what the trade pact will look like in practice.
After the White House succeeded in narrowly passing CAFTA through Congress last summer, many “free trade” advocates considered the treaty a done deal. The agreement squeaked through the House in a historically close vote of 217 to 215 and appeared to have finally weathered the storm generated by its diverse critics.
A new wave of dissent in Central America, however, is creating fresh difficulties for CAFTA defenders. In Costa Rica, the only country that has yet to ratify the deal, former president and Nobel Peace Prize winner Oscar Arias was expected to win back the presidency by a landslide in early February. In a surprise turn, his opponent Ottón Solís surged in the polls at the last minute, carried by his objection to Arias’s strong pro-CAFTA stance. The final contest was so close as to warrant a lengthy recount to identify the winner.
Based on the current tally, it appears almost certain that election officials will declare Arias the winner. Still, Solís’s opposition party will likely carry enough seats in the legislative assembly to make it very difficult for Arias to pass CAFTA. Contending that the treaty would “bankrupt Costa Rica’s agricultural sector,” Solís vowed this week that, regardless of the election’s final outcome, he would continue championing the demand for CAFTA’s renegotiation.
As the experience of other Central American countries shows, controversy can reignite even after CAFTA is ratified. In Guatemala and El Salvador, the Bush Administration’s advocacy on behalf of US special interests has sparked new disputes during the implementation phase of the treaty. There, US Trade Representative Rob Portman has tried to squeeze even more concessions out of the Central American partners before agreeing to certify their inclusion in the deal. Governments in Guatemala and El Salvador have cried foul, saying that the White House’s current agenda for reforms goes beyond the terms of the agreement.
According to the journal Inside US Trade, Portman has pushed for changes to Guatemalan intellectual property law that would extend the life of patents on many name-brand pharmaceuticals. Already, the United States has compelled Guatemala to repeal a law designed to expand access to generic drugs. Organizations such as Doctors Without Borders have denounced CAFTA’s impact on the Guatemalan AIDS epidemic, arguing that limits on generic antiretrovirals amount to a death sentence for many patients. The White House’s demands only worsen the restrictions.
In response, Guatemalan Vice President Eduardo Stein has blasted the Bush Administration’s hardball tactics: “It’s an affront to Latin America when a government says it wants to be a ‘partner’ but then is only interested in our money and commodities,” he told the Associated Press in December.
On behalf of the American beef, pork and poultry lobby, Portman has also demanded that CAFTA countries waive their own food safety inspection requirements for meat imported from the United States. This condition contributed to the delays in the implementation in El Salvador and drew further denunciations from the Guatemalan government. In late February Enrique Lacs, Guatemala’s vice minister of foreign trade, publicly complained, “The US negotiation practices have been wretched.”
Coming from Central American elites, such statements reveal an unusual level of resentment. “These governments are typically in line with the United States,” says Burke Stansbury, executive director of the Committee in Solidarity with the People of El Salvador (CISPES), “so the fact that they are making noise about provisions they say they didn’t agree to is remarkable.”
Resentment extends far beyond government quarters. In El Salvador, the United States pressed for reformed intellectual property laws that penalize poor vendors of pirated music and movies in the informal economy. The changes represent a sharp reversal, as the Salvadoran government’s attitude toward regulation had been lax. Joining more conventional opponents of CAFTA, thousands of street vendors have since staged raucous demonstrations against the constitutional changes, which threaten their already precarious livelihoods.
In January Todd Tucker, research director at Public Citizen’s Global Trade Watch, cited polls showing plummeting public support for the trade agreement throughout the region: 76 percent of Salvadorans believed that CAFTA would not help their country; 65 percent of Guatemalans said it would worsen conditions; 61 percent of people in the Dominican Republic opposed the deal; and 77 percent in Honduras regarded their pro-CAFTA government as corrupt.
Ongoing protests represent more than the untidy aftermath of a completed treaty negotiation. The current controversies around CAFTA implementation signal an escalating debate about the shape of corporate globalization in the Americas. CAFTA’s provisions mandating the reduction of specific tariffs are clear. But some of the most dramatic implications of the agreement, like privatization, are not as well defined. In coming years they will be contested in national parliaments, in trade courts, and on the streets.
“Neoliberal governments in the region are going to try to use CAFTA to privatize things like water and healthcare,” says Stansbury. “That’s something that people can stop. It’s the new battlefield.”
Conflict also continues in the United States, where a final CAFTA controversy is brewing. Up until the very eve of the House vote last July, the White House did not have the support it needed to pass CAFTA. In the end, the Bush Administration reversed key votes with a series of pork barrel buyoffs that was blatant even by Beltway standards.
In mid-February, Public Citizen released a report exploring corporate ties to the elected officials who cast the decisive votes. From January to September 2005, a handful of key representatives received $2.8 million in campaign contributions from political action committees representing industries that stand to benefit from CAFTA.
Of particular note are the Democratic Representatives who broke ranks to side with the Bush Administration, a group known as the CAFTA 15. The Public Citizen report includes a copy of an invitation to a $1,000-per-plate fundraiser held on September 7 in honor of these Democrats. The event was sponsored by the PACs of corporations including Pfizer, Procter & Gamble, and Motorola.
Unions and fair-trade groups have been less appreciative than corporate PACs of the CAFTA 15’s betrayal. In Illinois the International Brotherhood of Teamsters, which backed freshman Democrat Melissa Bean in 2004, has vowed to withhold support this year because of her reversed vote. The state’s AFL-CIO has similarly refused to endorse her re-election campaign. Other Representatives who voted for the treaty, including Henry Cuellar in Texas and Edolphus Towns in New York, face energetic primary challenges—supported by spurned labor and environmental constituencies.
Be it in hard-fought electoral contests in Costa Rica and the United States, in official protests in Guatemala, or in street demonstrations in El Salvador, the controversy that dogs CAFTA has already dispelled notions that the agreement will be quietly accepted. Judging by the treaty’s impact on working people throughout the Americas, and by its rocky reception thus far, CAFTA’s proponents can expect more backlash to come.
Research assistance for this article provided by Kate Griffiths.