CAFTA: it's FTAA but worse

posted January 10, 2003

As opposition to FTAA continues to grow, the US strategy is to end-run and preempt opponents through other smaller regional trade pacts and bilateral trade agreements that contain even worse anti-people trade provisions.

U.S., Central American Nations Launch Free Trade Talks

By Emad Mekay

WASHINGTON | The United States and several Central American countries launched free trade talks on Wednesday as part of the U.S. administration's drive towards a free trade deal for the western hemisphere.

U.S. Trade Representative (USTR) Robert Zoellick and ministers from Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua announced the talks towards an agreement to eliminate tariffs and other barriers to trade in goods, agriculture, services, and investment between the United States and Central America.

According to a statement from the USTR office, working-level negotiations on the proposed U.S.-Central American Free Trade Agreement, or CAFTA, will begin in San Jose, Costa Rica, on Jan. 27.

Talks are scheduled to end by December 2003.

"CAFTA will give Americans better access to affordable goods and promote U.S. exports and jobs, even as it advances Central America's prospects for development," said Zoellick.

"This FTA (free trade agreement) will reinforce free-market reforms in the region,'' added Zoellick whose country is also aggressively promoting the Free Trade Area of the Americas (FTAA), a pan-American agreement that could create the largest free trade area in the world.

But critics say the CAFTA appears to have the same deficits as existing pacts - like the controversial North American Free Trade Agreement
(NAFTA)
between the United States, Canada, and Mexico, which they say has kept the least developed country, Mexico, at a disadvantage - and the proposed FTAA.

''If they are planning to repeat the same thing, it'll be disastrous to many Central American nations, particularly on agriculture and labour,'' said Karen Hansen-Kuhn, trade programme director with The Development GAP, a Washington-based advocacy group.

Earlier last month, several non-government organisations (NGOs) in Central America and northern countries also voiced concern over CAFTA, saying that such agreements do not generate sustainable development or create better jobs.

''On the contrary, they increase public debt; threaten our historic, cultural and natural wealth; and destroy national sovereignty and food security,'' said the groups in a statement.

Civil society groups also view the United States, particularly under the right-wing Republican administration of President George W. Bush, as trying to influence international trade rules to favour corporations and business people while undercutting the ability of national and state lawmakers in developing countries to protect environmental and public health standards.

Details of the agreement reached today appear unlikely to allay their fears..

Nine rounds of negotiations by five negotiating groups are planned in 2003. Topics to be covered include: market access; investment and services; government procurement and intellectual property; labour and environment; and institutional issues, such as dispute settlement.

A sixth group on ''trade capacity building'' will meet at the same time.

Those topics are similar, if not identical, to provisions in NAFTA and the proposed FTAA.

During the talks, the Bush administration is expected to press for the elimination of non-tariff barriers and broad liberalisation of market access for goods and services, including e-commerce, science-based food inspection systems and strong protections for intellectual property - again all likely to benefit U.S. corporations first.

U.S. officials will also demand that Central American countries increase transparency in government regulation and procurement and adopt significant dispute settlement mechanisms - requirements that the USTR said stand to benefit U.S. investors.

Analysts say that the Bush administration, worried that its agenda in the Western hemisphere, and perhaps in other parts of the world, is threatened by the advance of some leftist politicians, is rushing these agreements, particularly the bi-lateral ones, to lock in place its neo-liberal policies.

''This (bilateral agreements) is also being used to pressure countries like Brazil, for example, who are saying they want to do something different,'' said Hansen-Kuhn.

''So they are going to go one by one picking off governments that are hoping to get U.S. market access early and locking in place the proposals and the policies the U.S. wants to push. This would make it harder for countries like Brazil or Venezuela and perhaps Ecuador to promote something different..''

Analysts say Washington is trying to short-circuit the influence of opposing political ideas through contentious items in the agreements called
''capacity- building'', which are really projects to educate and train other countries about U.S.-styled practices and policies.

On Wednesday, Zoellick also announced a number of programmes to improve the ''capacity'' of Central American countries to compete in the global economy.

These include more than 50 projects that include funds for computers and travel, others to help promote trade negotiations, assistance to strengthen science-based food safety inspection systems, and programmes to promote cleaner production.

According to the USTR office, Bush's 2003 budget request includes 47 million dollars in capacity-building assistance for the region - a 74 percent increase over 2002.

U.S. exports to Central America have grown 42 percent since 1996 and totalled nine billion dollars in 2001, about the same amount as U.S. exports to Russia, India and Indonesia combined. Imports to the United States totalled 11 billion, of which 74 percent entered duty free.

Although the United States has only four free trade partners: Canada and Mexico (within NAFTA), Israel and Jordan, the administration has been pursuing an aggressive free trade agenda.

In December, it reached a free trade agreement with Chile that must still be approved by lawmakers in both countries, while in November, Zoellick announced he had concluded the substance of an FTA with Singapore.

The administration also plans to soon start negotiations with Morocco, Australia, and the South African Customs Union (SACU) - South Africa, Namibia, Lesotho, Swaziland and Botswana. (END/IPS/NA/IF/IP/EM/ML/03)