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Trade: CAFTA and the Legacy of Free Trade
Posted by: JackRasmus on Tuesday, July 26, 2005 - 10:22 PM Print article Printer-friendly page Email to a friend Send this story to someone
From Jack Rasmus
“CAFTA and The Legacy of Free Trade�
by Jack Rasmus
“Z� Magazine, July 2005

The Corporate forces driving CAFTA and their real strategic objectives. This past April debate began in Congress on the Central American Free Trade Agreement, or CAFTA. Currently pro-Free Trade forces, notably Bush and his large multinational corporate backers, are locked in an intense legislative battle with opponents concerned about opening yet another major front which may lead to yet a further exportation of U.S. jobs. The outcome of that Congressional debate will determine the future direction of Free Trade policies in America, and with it the prospect of millions of American jobs in the years immediately ahead.

CAFTA represents the Bush administration’s effort to resurrect its stalled plans for a Free Trade zone encompassing the entire western hemisphere, called the Free Trade Agreement for the Americas, or FTAA. FTAA is the Bush-Corporate plan to extend the North American Free Trade Agreement, NAFTA, passed a decade ago in 1994 that established a free trade zone between Canada, the U.S. and Mexico. NAFTA has already cost American workers the loss of more than a million jobs.

CAFTA is thus the strategic nexus, the transition between NAFTA and Bush future plans for a western hemisphere-wide version of NAFTA involving 34 nations, a FTAA. But passage of CAFTA itself is not guaranteed. Not because of massive public opposition to the further huge loss of U.S. jobs to trade that would result should CAFTA and FTAA pass. But because of splits within the U.S. corporate elite itself over the proper pace and focus of free trade.

U.S. agribusiness is uneasy about the CAFTA deal, especially the politically powerful sugar industry. Textiles and apparel, and other U.S. light manufacturing industries are also opposed. With average factory wages of 90 cents an hour in the CAFTA region, CAFTA will almost certainly result in significant losses due to imports for these U.S. corporations, which are already being hammered by even lower cost imports from China producing similar factory goods for 64 cents an hour. From their perspective, they don’t need another ‘China on their doorstep’ to compete with.

Aligned against this group are corporations strongly pushing for CAFTA and a further expansion of Free Trade in the western hemisphere. This group constitutes a long list of ‘who’s who’ among U.S. multinational corporations. With only $33 billion in U.S. annual trade with Central America today, these corporate forces dominating U.S. trade policy for the past two decades are not concerned about exports vs. imports. The value of current U.S. trade with the small ‘city-state’ of Singapore, for example, exceeds U.S. trade with all the CAFTA nations. U.S. multinationals’ interest in the CAFTA deal is not about trading products with Central America. It is about opening U.S. corporate foreign direct investment into that region, and then extending it beyond to all of Latin America. For them CAFTA is not really about trade but about exporting their factories (and U.S. jobs) to the region to take advantage of lower labor costs, looser environmental regulations, and lower taxes in particular. As others have noted, CAFTA is not a trade agreement but a U.S. multinational corporation ‘outsourcing’ agreement.

Lined up on behalf of this latter corporate faction are the ‘big guns’ of the corporate lobbying worldâ€â€