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CAFTA-DR hits constitutional snags

By CATHY ROEMER, For Lee Agri-Media
Thursday, January 19, 2006 10:05 AM CST

TWIN FALLS, Idaho - The Central American Free Trade Agreement-Dominican Republic is struggling to get on its feet after six Central American countries, including the Dominican Republic, failed to meet a Jan. 1 preliminary start-up date.

All CAFTA countries have ratified the agreement with the exception of Costa Rica, El Salvador being the first in December 2004 and Nicaragua the most recent in September 2005.



“All countries recognized the Jan.1 date was an ambitious goal and that they might not have completed their implementation process by that time,� said Stephen Norton, spokesman for the U.S. Trade Representative office.

At issue are the “technical changes� the nations must make in customs procedures and regulations regarding intellectual property rights, telecommunications and procurement.

Portman said countries will come on line under a “rolling process� when they have completed the implementation process to USTR satisfaction, including a presidential proclamation from each nation.

CAFTA-DR's troubles have invigorated hope among opponents that the trade agreement could be derailed.



But Burke Stansbury, executive director for the Committee in Solidarity with the People of El Salvador, a U.S.-based group opposing CAFTA-DR, said it's unlikely the agreement will fall apart but “we are not giving up.�

“From day one the Bush administration has been trying to ram CAFTA down people's throats, with little substantive debate and despite voices of tremendous opposition,� he said. “In Costa Rica they have failed, and in other countries it took repression and dirty tactics to ratify CAFTA.�

Stansbury likened CAFTA-DR to an “investors' and corporate� rights agreement for the United States and U.S. corporations.

“U.S. corporations want strict fines and penalties in place before they set up their businesses there,� he said. “The USTR is demanding each nation to come up with a whole list of reforms that align with CAFTA.�

That amounts to constitutional or domestic law rewrites for each country involved, said Tom Rickert, co-director of the Quioxte Center, a Maryland-based group opposing CAFTA-DR.

“The problems associated with implementing CAFTA demonstrates what we've been saying all along: This agreement goes beyond trade in requiring dramatic changes in domestic laws that grant new rights to transnational corporations at the expense of working people,� he said.

Ricker also said CAFTA was being used as a mechanism to “re-energize the Free Trade Area of the Americas agreement.�

The FTAA intends to bring every country in the Western Hemisphere under one free-trade umbrella - possibly to the point of a common currency, the Amero, similar to the European Union's Euro.

Norton supported the idea of CAFTA-DR being a forerunner to FTAA when he said “Successful CAFTA-DR implementation is critical to the broader U.S. policy goals for the Americas of strengthening democratic governance, expanding economic opportunity, and investing in people.�

Stansbury said, too, CAFTA-DR goes beyond other free-trade agreements in that it prohibits countries from discriminating against “trade in-services� or “basic social services being managed by a foreign country.�

“It opens the way for foreign industry to manage services that have been traditionally managed by the state,� he said.

When asked if that stipulation means a Central American national could become a local fire chief or police chief in the United States, Stansbury said, “It is possible.�

CAFTA-DR funding United States

The United States' Trade Capacity Building policy gives financial aid to countries to align them with free trade agreements. USAID is another agency used to appropriate U.S. funds to bolster a nation's trade capabilities.

A partial listing of money being funneled into CAFTA countries include:

€ Honduras - $215 million

€ Nicaragua - $175 million

€ Potential for similar amounts in 2006 for other CAFTA countries is provided by the Millennium Challenge Corporation appropriating U.S. funds - Condoleeza Rice, chairman

€ President's FY2006 Budget Request: approximately $200 million for the region in development and capacity-building.

Inter American Development Bank (United States is a member) in a 2005-2009 loan pipeline for trade capacity building:

€ Costa Rica - $417 million

€ El Salvador - $375 million

€ Dominican Republic - $285 million

€ Guatemala - $281 million

€ Honduras - $142 million

€ Nicaragua - $103 million

World Bank (United States is a member)

€ Over $1.14 billion in already approved loans in support of CAFTA's reform agenda. Loans include financing for roads, ports, electricity, customs modernization, reductions in costs of doing business, rural development, strengthening governance and institutions.

(Source: Office of the United States Trade Representative.)