Article 43



Another way to outsource American jobs to cheap foreign labor.

CAFTA will eliminate trade barriers between the United States and five Central American countries—Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica - along with the Dominican Republic in the Caribbean.

Supporters had to overcome what some have called free trade fatigue, a growing sentiment that free trade deals such as the NORTH AMERICAN FREE TRADE AGREEMENT with Mexico and Canada have contributed to a loss of well-paying American jobs and the soaring trade deficit.

Democrats, who were overwhelmingly against CAFTA, also argued that its labor rights provisions were weak and would result in exploitation of workers in Central America.

But supporters pointed out that CAFTA would over time eliminate tariffs and other trade barriers that impede U.S. sales to the region, correcting the current situation in which 80 percent of Central American goods enter the United States duty-free but Americans must pay heavy tariffs.


CAFTA No: U.S. Workers Cant Afford Another NAFTA
June 24, 2005
by Moira Herbst

The Central America Free Trade Agreement (CAFTA) - the latest installment of free trade legislation being pushed by President Bush narrowly passed in the House and Senate Finance Committees last week and may soon be put to a formal Congressional vote. While it seems the deal lacks adequate support, it is critical that labor and its allies keep the heat on until it is defeated. What is at stake is no less than the future direction of world trade - and whether U.S. workers will continue to lose good jobs as the global sweatshop expands.

The accord, signed last year by Bush and the leaders of six mostly impoverished countries Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua - would eliminate most tariffs on the $33 billion traded annually between the U.S. and CAFTA countries. Modeled after NAFTA (North American Free Trade Agreement), CAFTA would be another step toward passage of the FTAA (Free Trade of the Americas Act), which would create a completely free trade” zone in this hemisphere. What the deals have in common is that they are designed to promote the interests of corporations and their investors, allowing them to trump the rights workers and the regulatory powers of national governments.

Another Raw Deal for U.S. Workers
As the Bush administration and its allies court Congressional votes, they echo promises made ten years ago when NAFTA was up for debate. Eliminating tariffs, they say, will mean more American exports, translating into more jobs for U.S. workers.

What Bush fails to mention are the jobs destroyed as American companies relocate to Central America to take advantage of cheaper, largely unorganized labor. A report from the ECONOMIC POLICY INSTITUTE estimates that NAFTA alone displaced nearly 900,000 decent-paying jobs in the U.S. in industries such as aircraft, food processing, auto manufacturing, apparel and consumer electronics.

Job losses accelerated as imports from NAFTA countries outpaced exports, creating a severe trade imbalance. Since NAFTA was implemented, the United States trade deficit with Canada and Mexico has ballooned 1,200%, from $9 billion in 1993 to $111 billion in 2004.

The overall U.S. trade deficit is growing at an alarming pace, hitting $617 billion last year and potentially reaching $780 million next year. CAFTA will only add to the deficit and leave American workers to search for new jobs, often in the lower-wage service sector where most new employment is being created.

Shedding U.S. Jobs to Keep Sweatshops in Business
Despite the Bush administration’s rhetoric of spreading “development and democracy” in Central America, CAFTA is actually designed to let businesses to profit from the low wages and denial of workers rights that are routine in parts of Central America [see the AFL-CIOҒs new report The Real Record on Workers’ Rights in Central America"].

Many Central American countries lack basic labor protections like anti-discrimination laws or the right to organize, and workers regularly face exploitation, abuse and hazardous working environments. In Guatemala and El Salvador, attacks on, and even the murder of, union members are well documented.

Instead of insisting that Central American governments respect internationally recognized workers rights - basic standards outlined by the United Nations International Labor Organization - the Bush administration has negotiated provisions requiring only the enforcement of domestic labor laws. And like NAFTA, CAFTA would do nothing to see that they are actually enforced. Just last week an amendment to apply the same penalties for breaking labor laws as for violating intellectual property rights was defeated by the Senate Finance Committee.

Of course this is part of the bargain for multinational companies choosing to relocate to Central America: keeping workers fearful and unorganized keeps them quiet about poverty wages and hazardous working conditions. And cheap, acquiescent labor means bigger profits.

So, while Americans stand to lose jobs at home from CAFTA, the deal will likely bring destruction and not development to Central America. NAFTAs legacy is instructive. Over the ten years it has been in place, real wages in manufacturing in Mexico have actually fallen, and liberalization in agriculture displaced nearly a million rural small farmers. An estimated 1.3 million agricultural jobs were lost, a figure not offset by job growth in export processing sectors. CAFTA will likely push Central American workers into unemployment or into work in maquiladora-style factories.

The American labor movement has teamed up with unions and grassroots groups in Central America to voice opposition to CAFTA. Nearly all Democrats in Congress are united in their opposition, as are many textile and sugar manufacturers - including a coalition of 23 manufacturing associations representing 18,000 companies who know they wonגt be able to compete if CAFTA is passed.

But the Bush administration and its allies in big business especially agribusiness and the pharmaceutical industry - are aggressively courting Congress, accusing critics of economic isolationism.

Already bearing the brunt of NAFTA and expanded trade with China, American workers will not be fooled they have learned the hard way that the דfree trade model is a failure. It fails to maintain or create good jobs at home while it tramples indigenous industries in poorer countries. Now the Bush administration is trying to secure yet another deal that destroys the chances of a secure middle-class life in America. By ensuring CAFTA’s defeat, the labor movement can show that U.S. workers will not back away from the fight.


Posted by Elvis on 07/28/05 •
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