Carnegie says CAFTA could worsen labor/enviro conditions in CA

Carnegie says CAFTA could worsen labor/enviro conditions in Central America

Central America Deal Must Boost Labour Rights

Inter Press Service
By, Emad Mekay
February 19, 2003

WASHINGTON - A proposed trade agreement between the United States and five Central American nations could further worsen labour and environmental conditions in the region if Washington does not use its clout to press for greater workers' rights there, says a leading U.S. think tank.

In January, the United States launched free trade talks with Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua towards the U.S.-Central American Free Trade Agreement, or CAFTA.

The administration of President George W. Bush said it would use the talks to push for the elimination of non-tariff barriers and broad liberalisation of market access for goods and services, including e-commerce and science-based food inspection systems as well as strong protection for intellectual property.

But in a recent report, the Carnegie Endowment for International Peace argues that the planned trade agreement, by replacing the current U.S. system of unilateral trade preferences, could wipe out the existing minimal recognition of labour rights in the region, which had been partially improved under the unilateral deals.

The Generalised System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), and the Caribbean Basin Trade Partnership Act (CBTPA), all extend market access benefits unilaterally to the Central American countries on the condition that they respect workers' rights.

While recognising that the instruments have not solved the basic problem of the lack of rights and rule of law for workers in the region, the report says that they reversed the most egregious violations of rights and threats to lives and have also arguably prevented many more such abuses.

While replacing the unilateral deals, said the report, a new agreement would expand market access to the United States. ''This would leave existing (labour) problems to fester and invite further abuse.''

The report also cautions that there is a slight, but dangerous, chance that the so-called free trade agreement will be negotiated with no labour provisions, because of pressure from major U.S. businesses.

Officials from the U.S. Trade Representative office did not return phone calls requesting comment on Wednesday.

But the administration has previously countered such warnings about labour provisions by saying that the U.S. Trade Act of 2002, under which the agreement's terms will be negotiated, spells out objectives on labour, including several provisions similar to those contained in the U.S. ¡ Jordan Free Trade Agreement.

But the Carnegie report's author, Sandra Polaski, who, as a state department official, negotiated the labour provisions of that agreement and another with Cambodia, argues that may not be the case.

Unlike Jordan, which has reasonably good labour laws and relatively effective enforcement, ''Central American countries have glaring weaknesses in their laws, inadequate enforcement, and judicial systems that fall short of any reasonable standard for the rule of law,'' she wrote.

She suggests that Washington use the agreement to press the region's government to end systematic repression of workers' rights, physical intimidation, beatings, kidnappings, child labour and even assassinations of trade union leaders - in the same manner that Washington threatens to revoke trade benefits from countries that do not respect intellectual property rights.

The trade threats approach was revealed Tuesday when Taiwan agreed to crack down on CD piracy after Washington threatened to repeal the Asian nation's trade benefits. The country exports 131 billion dollars worth of goods annually to the United States, its second-largest export market.

But other trade experts say that expecting the corporate-backed Bush administration to react to moral arguments about labour and environmental standards - often considered by corporate executives as 'taxes' on profits - is not realistic.

Given past experiences with the North America Free Trade Agreement (NAFTA) which, for example, gives northern companies the right of litigation but takes it away from the host country - in this case Mexico - Washington is unlikely to press for concessions on such standards, said one expert.

''Realistically, the Bush administration is not gong to do that,'' said Dean Baker, co-director of the Centre of Economic and Policy Research. ''It's not going to happen. We have an experience with this.''

Baker, whose centre is based in Washington, said that clauses in trade agreements protecting intellectual property rights of U.S. companies are ''iron-clad'' and ''very specific'', while labour and environmental standards are weak and given only lip service because powerful corporations back intellectual property protections.

But Polaski says in her report that the proposed agreement should make it clear that if Central American countries do not give their citizens certain rights, they will not be able to invoke preferential treatment clauses in the deal.

The report also argues that a free trade agreement could help workers' rights by creating ''political space'' in Central America for needed legislative reforms that have so far eluded governments.

Such rights should include freedom of association, the right to collective bargaining, protections against child labour, freedom from forced labour and acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.

''If countries fail to respect these rights, they run the risk of losing the trade preferences for some or all of their products,'' recommends the report.