Published on Wednesday, July 27, 2005 by CommonDreams.org
The Hidden Pages of CAFTA
by Liza Grandia
At 2,400 pages, the Central America Free Trade Agreement (CAFTA) isn't really about trade. Frankly, you don't need 2,400 pages to eliminate tariffs and regulations on exports and imports. But, you might need 2,400 pages to smuggle through a new set of transnational corporate rights disguised by complicated legalese. I wonder, how many of our Congressional representatives will have even attempted to read this trade to me before next week's vote?
I recall in 1994 that only one senator Republican; Hank Brown (R-CO), accepted Ralph Nader's challenge to win $10,000 for charity by taking a simple ten-question quiz on the content of the World Trade Organization (WTO) agreement. After studying the agreement, Brown announced to the press: "I am a Republican, pro business and a proponent of the free market economy and I am here to speak out against the WTO. For when you read this text - and I invite my colleague senators to do this - you will understand that the WTO is fundamentally undemocratic."
Any na´ve Congressperson who thinks CAFTA is merely about free trade should look carefully at its provisions on government contracts and corporate lawsuits, among others.
Government contracts. For any purchases over $117,000 (eventually to be lowered to $58,000), CAFTA forces governments to open up bidding to transnational corporations. That means that states will not longer be able to give preference to home-based businesses, and so mom and pop stores in Central America and the U.S. will suddenly be competing with the Bechtels and the Halliburtons of the world.
Corporate lawsuits against governments. Perhaps CAFTA's most worrisome provision expands the rights that corporations got under NAFTA to sue national governments over any laws perceived as barriers to trade and foreign investment. For instance, when California banned a carcinogenic gasoline additive called MTBE because it was seeping into the state's drinking water, the chemical manufacturer, Methanex, sued California for infringing on its trade rights under NAFTA and demanded $970 million in compensation. Such suits are a direct threat to democracy because they prioritize the profits of foreign corporations over a country's own environmental, social, and labor laws.
Already corporations are planning more such lawsuits. If CAFTA passes, a subsidiary of Harken Energy (on whose board George W. Bush once served) has said it will demand $58 billion from Costa Rica (whose entire GDP is only $37 billion) in compensation for hypothetical future lost profits, if they are not allowed to drill offshore in Costa Rica's protected Talamanca region--one of the planet's richest marine ecosystems, and a UNESCO World Heritage Site.
CAFTA also encourages privatization, especially for government services in health, water, energy, and social security. In agriculture, it will allow transnational agribusiness cartels to dump food commodities at below-market prices. It will forbid the public health sector from buying life-saving generic drugs for diseases like AIDS.
Upon close examination, one realizes that CAFTA is not a "free trade" agreement, but a corporate trade agreement that transforms foreign investment from a privilege to an inalienable right.
CAFTA is like having a house guest who cleans out your refrigerator, claims your nicest bed, spends hours in the bathroom, takes exclusive control of the television remote control, and then-like Paris Hilton-demands that you pay for the pleasure of her company and then writes you off as a business expense.
There are alternatives. If the U.S. is serious about strengthening economic ties with our closest neighbors, we could take a Common Market approach like Mercosur or the European Union. Europe opened up not only trade, but also labor markets to the lesser-developed regions of Europe. And, to help poorer member countries like Ireland become equal trading partners, the E.U. gives back 3.5% of Ireland's GDP in grants.
In the meanwhile, the U.S. has a perfectly sound trade agreement with Central America called the Caribbean Basin Initiative, which already makes most of our trade with Central America duty free. Congress should defeat CAFTA and send the Bush administration back to negotiate a real trade agreement that every U.S. and Central American citizen can read in less time than the pages of King James version of the Bible and Gone With the Wind combined.
Liza Grandia is an anthropologist who has lived and worked in Guatemala for more than six years. Her dissertation concerns the impacts of trade and globalization on the agrarian situation of the Q'eqchi' Maya people. Email email@example.com.