The president signed the Central America Free Trade Act (CAFTA) almost 1 year ago but it has not yet been ratified (via the up/down vote).

A listing of the pros and cons of this legislation are summarized here.

http://www.pbs.org/now/politics/caftadebate.html

"CAFTA's backers were taken by surprise when in late February 2005, the usually pro-free trade National Association of State Departments of Agriculture voted to take a stand against CAFTA. And although Honduras and El Salvador recently passed CAFTA through their legislature, on March 9 and 10, 2005, anti-CAFTA protestors succeeded in preventing Guatemalan lawmakers from making a vote on the pact. Despite the protests, the measure is expected to pass both the Guatemalan and eventually, the U.S. legislatures"

The question for debate is:

Should the US Congress Ratify CAFTA? Why?

Should the US Congress Ratify CAFTA? Why or why not?

Yes, the US should ratify CAFTA. I expect CAFTA to have similar effects as NAFTA did. The price of goods in the US will drop, a cultural understanding will to develop more fully between Central America and the United States, and the US needs an ally to combat Chinese cheap labor dominance.

NAFTA was implemented and 1994 and trade between the US, Canada and Mexico has more than doubled. Some say it cost the US jobs, but unemployment peaked at about 8% in 1994 and dropped steadily to 4% over the next five years. The truth of the matter is that the relative wages of unskilled workers in the US go down some because the unskilled labor market has increased, but the wages of skilled workers go up because the buying market has increased for high tech goods created in the US.

I guess the question boils down to- is competition a good thing? I think so.

I'm a little surprised that no one has argued against this. Ohio Representative Brown did today in an op ed piece in the Washington Post.



This is not an unreasonable request to ask that Central American companies provide labor standards and environmental policies that are on par with International Standards. And CAFTA is certainly lacking in regard to workers rights. Could we get a better deal? Not too sure. The current deal is not bad.

The Central American countries already enjoy duty free access to the U.S. for over 75% of their exports, so why not level the playing field?

Should the US Congress Ratify CAFTA? Why or why not?


I agree with the opinion of Congressman Ron Paul, July 7, 2005
http://www.lewrockwell.com/paul/paul254.html




We are already having to rewrite US laws because of WTO decisions against us. Some of these are not about "barriers to trade", but things like "work safety laws" foreign, and yes even foreign subsidiaries to US corporations find "inconvenient".

If we're going to go to the trouble of having a "sovereign nation" then why that sovereignty by making it subject to decisions that will not always be made in our coutry's interest?

Besides, as Ron Paul says, if you want free trade, with another nation, all you have to do is remove your barriers to said trade. If they want the same with you, they only need do the same. Nothing else is required.

(for reference)
Article 1, Section. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; To borrow Money on the credit of the United States; To regulate Commerce with foreign Nations, and among the several States

Ok, this obviously does not jive straight with 1.8... almost. When Congress ratifies a treaty it is regulating commerce with foreign nations.

That isn't too say that Congress should/shouldn't ratify CAFTA though. You have to measure the pros and cons. On a purely national-economic level, it's probably not in America's best short term interests. But you do have to consider the fact that all that free-trade talk comes with certain expectations, and America's habit of only following through when it serves her own interest does damage market accessibility and trade relations.

I realize that yesterday the House passed CAFTA by a 217-215 vote.

But voting was held up for 1 hour to twist Rep. Robin Hayes's arm.

This is what he had to say 2 weeks ago.



This seems to be a repeat of the Medicare Prescription Bill that passed a few years ago after keeping the voting open for at least 3 hours and did a little arm twisting.

And you know what happened after that bill passed.

Free trade helps everyone. Adam Smith wrote about this 300 years ago and people still believe protectionism works. Americans pay 4 times the market price for Sugar in the US. This is mainly due to the Sugar lobbyists. Before anyone talks about "the loss of jobs..." I would have you look at the candy company Lifesavers. They moved to Canada because the cost of sugar in the US.

Free Trade works.

Doesn't seem like we have much of a say in it now. However I do think it is a seemingly good idea on the whole. It provides access to materials without tariffs and or unnecessary protocol. Adding the six nations to the free trade agreement may become a wolf wrapped in sheep's clothing but in the short-term I whole-heartily agree to CAFTA.

It will add economic development and give nations with weaker economies who have joined the free trade agreement a potential jump-start on fiscal responsibility and freedom.

The fact that the CAFTA deal was approved its likely to be, my understanding, devastating to the people of the countries involved. It is being portrayed as a free trade agreement and a ?good deal for the workers?as G.Bush said 1 and that it ?is profoundly important to the region?s democratic success? according to Robert Zoelick.2 I will not go into the details of the predecessor Nafta agreement and rather devote the post to the CAFTA agreement. 3

The CAFTA agreement has some elements of free trade but it cannot by any means be called a free trade agreement (as most of the ?free trade ag.?). Some trade barriers will increase while others will be lowered. One barrier which will increase is the patent on pharmaceutical drugs, witch is according to the economist Mark Weisbrot is ?the most costly form of protectionism in the world today.? 4 Earlier this year India was forced by WTO to stop making cheap drugs that was being sold to Africa to help people that had HIV. So they did, the consequences are severe, the prices on these drugs has gone up, needless to say Africa has been suffering more from AIDS. If something like this happens in Central America, that has been devastated after US interventions and ?terror campaigns? 5, it will damage the lives of the people that cannot pay for the expensive drugs. Dr. Karim Laouabdia from the organization ?Doctors Without Borders?--which has been providing generic antiretrovirals to Guatemalan AIDS patients says that the impact "could make newer medicines unaffordable." For his group, this "means treating fewer people and, in effect, sentencing the rest to death." 6.

For the Central American countries the agreement means protectionism for large US corporations and not for the Central American countries. Here there are similarities with NAFTA and other ?free trade? agreements, under NAFTA Mexico had to ?liberalize? and cut subsidiaries to poor corn peasants, while large US corporations flooded the markets with subsidized corn. About 1.5 million farmers lost their living hoods. Most of them sold their land and went to the cities; the result was that the wages was reduced with 13.4 % according to the International Monetary Fund. Free trade? The examples are numerous: US on cotton with Mali, powder milk with Jamaica(1980s)etc. If we go back to A. Smith, we find out that he said that a part of free trade is free float of labour, witch these agreements has nothing to do with. the conclusion I draw is that CAFTA is not a free trade agreement at all, it?s a investor rights agreement.

Is this agreement really good for workers as G. Bush said it? According to human rights watch:
?Women who become pregnant are routinely fired from jobs and shut out of employment in the Dominican Republic?s export-processing sector, Human Rights Watch said in a briefing paper released today. The proposed U.S.-Central America Free Trade Agreement (CAFTA), which ignores workplace discrimination, will allow these abuses to persist.? And that ?Its only enforceable labor rights provision requires countries to effectively implement existing labor laws. The regional trade pact?s definition of ?labor laws? excludes laws related to workplace discrimination, leaving the Dominican Republic free to ignore its own anti-discrimination labor laws while reaping the trade benefits of CAFTA.?
LaShawn R. Jefferson, executive director of Human Rights Watch?s Women?s Rights Division said that :
?CAFTA could have incorporated protections against sex discrimination, but instead the negotiators failed women miserably.? She went on and said ?CAFTA trade negotiators have willingly sacrificed equality? no country should be allowed to enjoy free trade with the United States while flouting women worker?s rights.?7

An other human rights report shows that there is ?Failure to Protect International Labor Rights Standards?, ?Failure to Protect Women Workers against Discrimination in Law or Practice?, ?Failure to Ensure Adequate Domestic Remedies?, ?Inadequate Incentives to Enforce Existing Labor Laws? and concludes that :? Under CAFTA as currently drafted, parties have little or no incentive to strengthen their deficient labor laws, ensure adequate remedy for workers? rights abuses, protect women workers from discrimination, or improve domestic labor law enforcement. CAFTA should include strong, enforceable labor rights protections to compel countries to take such steps and create a free trade area in which the rights of workers producing goods for export are upheld. It does not. The accord, therefore, should be renegotiated to include better protections for workers? human rights. If Congress is asked to approve this version of CAFTA, it should refuse, sending a strong message that it will withhold its support until the accord?s labor rights provisions are improved.?8

According to the ?trade fact? by the office of the united stated trade representative CAFTA has a ?Strong Protections for Worker Rights: Goes beyond Chile and Singapore FTAs to create a threepart strategy on worker rights that will ensure effective enforcement of domestic labor laws, establish a cooperative program to improve labor laws and enforcement, and build the capacity of Central
American nations to monitor and enforce labor rights.? 9 CAFTAs labour chapter does expand upon provision in the Chile and Singapore FTAs regarding procedural guaranties. The CAFTA language is drawn directly from articles 5 and 7 of NAFTAs labour side agreement , NAALC. This new language that USTR included is completely unenforceable. The provisions are excluded from dispute resolution, allowing a country to refuse to provide even the most basic procedural guarantees in the new provisions with impunity. 10

The Oxfam America trade policy adviser Stephanie Weinberg says that ? the US ?central America free trade agreement will bring devastating changes upon Central Americas poor.? And that ?requiring liberalized trade in agriculture, deregulated investment and decreased access to intellectual property will reduce central American governments abilities to make trade work for developments goals. OXFAM America says no to Cafta and calls on governments to uphold the rights and interests of all their citizens to make trade fair for central America? 11 I agree with Oxfam, human rights watch, workers unions and the huge people (pueblo) of the Central American courtiers that oppose these kind of agreements, the agreement should be dismantled and a new agreement to integrate these economies should be based on the principles of the ALBA trade agreement (Venezuela/Cuba), equality solidarity and fair trade.


fotnotes:
1 http://www.nytimes.com/2005/07/16/business...and&emc=rss

2
http://www.heritage.org/Research/TradeandF...gnAid/hl884.cfm

3 for reports on Nafta see:
http://www.publiccitizen.org/trade/nafta/


4
http://www.cepr.net/columns/weisbrot/mark_..._2005_04_18.htm

5
the full quote is :?what we wanted to do was to have a terror campaign ? (on Guatemala)
Howard Hunt, head of CIA operation in Guatemala.
The full interview with Hunt can bee seen in ?century of self?, BBC, Adam Curtis, 2004. For further reading on the US interventions see James Dunkerly, ?the long war, dictatorship and revolution in El Salvador?, 1981, Junction books. Eduardo Galeano ? Las venas abiertas de America Latina? chapter 4 and 5. Noam Chomsky , ?Hegemony or survival?, 2003, metropolitan books chapter 4. Forrest D Colburn, ?post revolutionary Nicaragua? 1986, university of California press. Omar Cabezas, La Montana es algo mas que una inmensa estapa verde?, 1982.
The International Court of Justice also condemned the US for ?unlawful use of force? , backed by 2 UN resolutions: http://www.un.org/documents/ga/res/41/a41r031.htm
http://en.wikipedia.org/wiki/Nicaragua_v._United_States

6
http://www.democracyuprising.com/articles/...quiet_death.php
see also : http://www.citizen.org/documents/DataExclusivityMay04.pdf
7
http://hrw.org/english/docs/2004/04/21/domini8474.htm

8
http://hrw.org/english/docs/2004/03/09/usint8099.htm

9
the office of the united stated trade representative, ?trade fact.
Free Trade With Central America?, Washington, DC 20508

10
http://www.citizen.org/documents/CAFTAandL...es(AFL-CIO).pdf

11
http://www.andrew.cmu.edu/~mtoups/cafta_br...final_dec03.pdf
see page 23.

(english is my second language so plz forgive my many mistakes)

Personally, I oppose CAFTA for many of the same reasons I opposed NAFTA. I don't believe in government sanctioning of worker exploitation, abuse and environmental degradation. I likewise opposed and still oppose MFNS for trade with China (we've seen how much that's benefitted American workers). How does a American compete with countries that subsidize wages (maybe 5 dollars a week in wages at that), have no worker safety or labor laws, no worker protection against work related injuries, no environmental regulations etc...Where's the level playing field in this treaty? To me it just spells more government sanctioned job exportation. Given how little these workers make, where's the upside for us? What can people making 5 bucks a week afford to buy from us?

Do you have any economic reasoning to defend your opinion? 200 years of economic writing and history proves free trade benefits everyone. While there may be some problems with CAFTA, it is a step in the right direction. From an economic point of view, free trade agreements are a no brainier, but protectionism always fights against economic progress. I believe President Clinton’s greatest achievement was NAFTA and GATT.

I wasn't aware I needed to "defend my opinion" in the first place. I believe that's why they're called opinions but if you insist.

http://www.epinet.org/content.cfm/briefingpapers_bp147



Also our import/export numbers are deceptive in 2002 for example:

http://www.vdare.com/roberts/no_think.htm


So we counted them as exports when in fact they went to Mexico, had value added to them, were reimported and sold here .

As For my comments on MFN status with China the trade deficit speaks loudly to that. What we export to them is mostly raw materials, which they in turn produce goods out of then resell to us as finished products...Yes the products are cheap but then they would be given that China subsidizes workers wages and wages are very low to begin with...Cheap products are a wonderful thing until you factor in how they got so cheap. I'd rather pay more for goods made HERE than continue to finance the demise of our own manufacturing base, which is the price of these labor cheap/duty free imports. As manufacturing in the US dwindles (along with the decent wages they provided) Americans have little choice but to buy these cheap imports as they move from higher paying manufacturing jobs into lower paying service jobs.

US exports to China: 795,000,000,000
US imports from China: 1,476,000,000,000

How much of what were are importing now from China used to be made here?

http://www.gobob.org/wto-nafta.htm


I can attest to that fact, I live in Michigan and I've watched once vibrant, thriving cities die here. When manufacturing leaves, it takes a whole host of other local companies down with it from suppliers to the local stores, eateries etc...



Yes Sandion should have posted his source perhaps s/he wasn't aware that they needed to do that...In any case, how about addressing the information s/he posted as well as lecturing the poster for not citing the source? As to whether it helps his/her case or not, is a matter for debate. Using someone elses material to make your case does not invalidate the information offered.

Your first citation comes from a liberal economic think-tank so I can take that with a grain of salt. BTW this is so there is nothing wrong with asking for some sources of your opinion, especially when it goes against the writings of Adam Smith.

As for all your information about a trade agreement that is hardly 10 years old, it is too early to decide "it's bad." The US' economic future is not in manufacturing. I am from North Carolina and manufacturing has been decimated, but that state also has one of the fastest growing economies in the country. It’s terrible when people lose jobs, but there are other jobs out there. Just like the US moved from agriculture to manufacturing, the US is moving towards a service and information economy.



Well, George Monbiot is not exactly an economist. He studied zoology and is an environmentalist. I would put his opinions of economics matters on a par with Pat Buchanan (while on the opposite political spectrum). Monbiot is not exactly Dan Griswold.

That is your perrogative to dismiss as you see fit, I likewise maintain that option for sites I deem as right-wing think-tanks...So pass the salt please!



You asked me to "defend my position" so I did. Personally, I don't need another 10 years to add 1+1 to discover it equals 2. The first 10 years have been illuminating enough thanks. As for "other jobs" the real question for displaced manufacturing workers is what do these "other jobs" pay ? Many of those displaced workers are older, what do they do Nemov? Go to college at 40-45 years old so they can spend the rest of their working life paying back student loans? Take a job at Walmart? That's the ugly reality here all too often. For older workers it's a lose/lose proposition. For younger workers coming from low income and lower-middle class income it's a mixed bag. They are young enough where college can make a difference but can they afford to go and even at that, it's a crapshoot. How many people lost their tech sector jobs to firms in India? How many college grads are working in low paying service jobs because the bottom fell out of whatever career area that went to school for? Personally I know at least 3 such people myself running cash registers at the grocery store or working at Kmart.

First off, welcome. I appreciate you taking the time to express these concerns. Protecting patents is fundamental in encouraging further research and development. Do you want to stymie the development of new drugs?


What sort of protectionism are you speaking of? Are there some forms of giveaways to US industry that seem unfair or is the US just protecting it’s intellectual property rights?


I agree that labor and environmental policies need to improve. Without this agreement, do you think that working conditions in Central America improve though?


While this would be ideal, do you really think that the Central American countries would have agreed to an agreement such as ALBA? Something is better than nothing in my opinion. CAFTA will help Central America and the US become closer partners in the global economy. I think this is a good thing.


I’m with you on China. The playing field is skewed severely in that case. In terms of CAFTA, the playing field is more level now than it was before IMO. If over 75% of Central American goods already entered the US tariff free, isn’t it a good idea to have their countries open their borders to our goods? Again, something is better than nothing and this is an improvement. Do you suggest that we close our borders to Central America even though they can be invaluable partners should the US and China have a falling out?

As for the upside for us: there is one. I understand your thinking in that the average worker in Central America is not going to all of sudden start buying new Ford Trucks. What about the businesses in Central America though? We saw large increases in the purchasing of capital equipment and raw materials from US companies when NAFTA passed. We expect to see the same here.

Since we are using "personal observations" now I can speak for myself. I graduated 2 years ago after paying my way through college and moved to Florida and have a great job. I am still paying for student loans, but with common sense they are manageable. I was the first person in my family to graduate college. My great grandparents were farmers, my grandparents sold cattle, my father had a series of different jobs and is doing quite well without a college education.

Like I said before, the US' was an agricultural economy before it was a manufacturing economy. I am sure when that change was coming there were people like yourself complaining about agriculture jobs, but it did not stop the change. With increases in technology and robotics manufacturing as we know it will become a smaller part of the economy, following the same model as agriculture.

This is all happening and unemployment is at a very low 5.0%, and average weekly earnings by factory-line workers and non-managers in the services sectors has gone up 12.46% the past four years. I do not mean to trivialize anyone that has recently lost jobs, but the economy is changing.



Just look at the wikipedia's entries on both groups.

Economic Policy Institute

Cato Institute

One of these groups is much more accepted by economists.

I'd agree something is better than nothing. Would I close the border, no. I was looking at the agreement a few minutes ago and I did see that there is more protections built in for workers than there was in NAFTA (which was totally non existent). My overall concern in all trade agreements is to not cut off our noses to spite our faces. Too many of our past agreements have done that very thing. This one appears a bit better than some of the past ones. Yes opening trade to OUR goods will in the longrun benefit the US, IF down the road these countries can afford to purchase our products.




I'll agree with you on the capital equipment but raw materials don't produce many jobs here and that is my primary concern. We sell alot of raw materials to China and then we basically buy it back and them some when they turn that raw material into goods, so where did we gain? We're basically buying it back with a hefty markup as the raw material isn't nearly worth what the finished products bring in in cash and jobs. You'll have to pardon my wariness when it comes to these agreement I guess NAFTA and MFN status for China has left a bad taste in my mouth regarding them.



It is where you are, where I am and in places like Ohio, it's another story entirely. The company I work for (as an example) has given 30 cent raises every year and we are actually losing ground. Why? Because the cost of everything here as risen drastically (and some of those rises are across the country increases) not just regional. That 30 cent raise the past 2 years have been offset by increases in employee healthcare contributions, higher copays on prescriptions, office calls and decreases in how much of larger hospital bills are covered. It's been offset by climbing housing costs, home and auto insurance, utility bills, higher fees on just about anything you can think of here in Michigan and gas prices. So while our wages rose, the prices of so many other essentials have outpaced them. My main concern is for all the older workers that our caught in the transition and for the younger workers I see that have loans to pay and haven't found work. As always, Michigan gets hit first and usually hardest and is the last to recover. So I hope what you are seeing there will translate to places like here.