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CAFTA Is a Broken Trade Agreement that Duplicates NAFTA’s Failures, Says New AFL-CIO Report

The proposed Central American Free Trade Agreement (CAFTA) fails to address the needs of Central America’s workers and may put workers at even greater risk, a new AFL-CIO report says. Currently, 40 percent of Central America’s workers earn less than two dollars a day, and workers’ rights are routinely abused. There are deep flaws in Central American labor laws and enforcement -- flaws that have been severely and repeatedly criticized by the U.S. State Department, the International Labor Organization, and independent human rights organizations. Instead of fixing broken labor laws, CAFTA weakens them.

CAFTA’s rules on labor rights are so poor that they backtrack from existing U.S. laws that require Central American governments and employers to respect workers’ rights in exchange for unilateral trade preferences, the report says. CAFTA’s labor chapter lowers the standard on labor rights that countries are currently required to meet under the Generalized System of Preferences (GSP) and the Caribbean Basin Initiative, and the agreement eliminates enforcement tools currently available in the unilateral programs.

“The Real Record on Workers’ Rights in Central America explains why working families in the U.S. and Central America oppose CAFTA. They know that it is another flawed trade deal that will sell out America’s jobs -- and CAFTA will not do anything to pull people out of poverty in Central America,” said Linda Chavez-Thompson, AFL-CIO Executive Vice-President. “CAFTA represents a flawed model of free trade without protections for workers’ rights, just like the NAFTA. NAFTA has not delivered the promised reductions in poverty and inequality in Mexico, and the U.S. lost close to 900,000 jobs and job opportunities due to NAFTA trade deficits,” said Chavez-Thompson.

NAFTA created broad new rights for multinational corporations trading and investing in the U.S., Mexico, and Canada, but the agreement failed to include similarly strong protections for workers’ rights. As a result, 11 years after the agreement was implemented, trade and investment among the NAFTA countries has increased, but workers have not benefited. In Mexico, basic workers’ rights continue to be denied, real wages have fallen, and poverty is on the rise.

The report finds that under CAFTA, Central America’s workers will continue to face insurmountable obstacles to exercise their most basic rights. They will be unable to bargain with their employers for a decent share of the wealth they create and thus remain trapped in poverty. Workers in the U.S. will be pitted against their fellow workers in Central America, causing downward pressure on U.S. wages, increasing the leverage of employers to squelch union organizing drives and destroying good jobs.

Contact:  Sarah Massey (202) 637-5018

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