http://www.vheadline.com/readnews.asp?id=42244


Published: Tuesday, July 19, 2005
Bylined to: Arthur Shaw

Under CAFTA, the peasants may do better than the middle classes

VHeadline.com guest commentarist Arthur Shaw writes: Oxfam America ... the anti-famine organization ... cites Honduras as a case study for the likely regional result of CAFTA, the "free" trade swindle between US imperialism and Central America/Dominican Republic.

In Honduras in the '90s the issue was rice, but the economics of the Honduran rice problem applies to CAFTA agriculture as a whole.

Stephanie Weinberg, a representative of Oxfam, made the statement on behalf of her organization before the Committee of Ways & Means of the US House of Representatives which held hearings on the proposed CAFTA theft.

"In fact, the experience of the rice sector in Honduras in the 1990s offers a case study of the likely impact on small farmers in the region."

In 1991, the Honduran government cut tariffs on rice imports to make up for a shortage due to drought, and a flood of imports at harvest time equivalent to the country's annual consumption left local producers without a market. Rice prices fell by more than 28 percent in one year and, as a result, areas under rice cultivation decreased by 35 percent the following year. Over a decade, the number of rice producers dropped from 25,000 to fewer than 2,000, and the jobs generated from rice production fell from 150,000 to 11,200. As a result, rice production was reduced by 86 percent between 1991 and 2002, and the amount of foreign exchange spent on rice imports increased 20-fold (from $1 million in 1989 to $20 million in 2003). At the same time, the price of rice to consumers rose 140 percent in nominal terms, or 12% in dollar terms, over the decade."

These seem to be the steps in the economic process.

First, tariffs are cut between heavily subsidized agricultural producers of the big capitalist countries and the unsubsidized and impoverished producers of a third world country.

Second, the subsidized imports pour into the third world country, causing a temporary rise in supply and prices fall.


Third, The subsidized imports from the big capitalist countries capture of the third world market.

Fourth, the third world farmers or producers unable to compete against the subsidized imports lose their land, causing a drop in supply and a jump in price.

Fifth, the third world country blows its foreign exchange on additional subsidized imports of food sold at inflated prices, until it currency reserves are exhausted.

Sixth, the third world countries borrows money and runs up the debt to finance its growing imports.

Seventh, the third world country is unable to pay the contrived debt, so it transfers its sovereignty, under a "free" trade agreement like CAFTA, to the US imperialists.

Eighth, the US imperialists shout "Gotcha!" The US imperialists plunder the oil and other minerals, paying nothing these resources, as well as the labor, paying wages that are so low that the employed sector of the third world country is reduced virtual and actual slavery.

The US imperialists, capitalist media, and the privileged layers of the imperialistically endowed Catholic Church (especially in Venezuela) call this economic process "democracy," "freedom," "free" trade, and "free" enterprise.

The middle classes the CAFTA countries, the disgusting tail of the local capitalists and of the imperialists and pompous high priests, can't quite figure what the fuss over CAFTA and other US-sponsored "free'" deals is all about.

It's really easy to figure...

The same process or the same economics, described above, that will hit (and that has hit) the peasants and small farmers of CAFTA will also hit the middle classes of CAFTA, except the "product" of the middle classes will not be rice as in Honduras, but professional services (like design, drafting, and administrative functions) that don't require geographical immediacy to render to consumer. These services will be "subsidized," not by the imperialist state in Washington, DC, but by the slave wages of the super-exploited workers in India, where the US imperialists are rapidly building all kinds of facilities to support these outsourced operations.

This is how the imperialists, using to be sure very polite lingo, express the idea of cutting the throats of the CAFTA middle classes "The Agreement will create new market opportunities in Central America and the Dominican Republic for a range of key US services suppliers and will lock in access in sectors where their services markets are already open. The Agreement includes a market-opening services framework based in substantial part on trade-liberalizing 'negative list' approach. This means that all services sectors are subject to the Agreement's rules unless a country has negotiated a specific exemption in that sector."

Rice or professional services. Peasants or the middle classes. There's not a dime worth of difference.

Arthur Shaw
belial4444@aol.com