CAFTA—More False Promises
By John J. Sweeney

Increasing jobs. Raising the standard of living. Spreading the wealth.

Read more from President Sweeney

That’s what America’s workers are being promised with the latest trade boondoggle now in Congress, the Dominican Republic-Central AmericanFree Trade Agreement (CAFTA).

But we’ve heard those promises before. In 1993, America’s workers were promised that passage of the North American Free Trade Agreement (NAFTA) would stimulate the economy through new jobs, more opportunities, better options.

Instead, nearly 900,000 U.S. jobs have been lost or not created because of skyrocketing deficits under NAFTA, and real wages in Mexico have fallen, according to the Economic Policy Institute (EPI).

Now, Big Business-backed members of Congress and the president are at it again. But no elected official who cares about the well-being of working people can vote for CAFTA.

Because CAFTA is so similar to NAFTA, we know what it won’t do: It won’t create more jobs or provide vast new trade opportunities. Here’s what this flawed trade deal will do:

• Eliminate U.S. jobs. CAFTA supporters say the pact will open markets and create more U.S. jobs—but the Central American market is tiny, and not likely to absorb significant increases in U.S. exports. American agriculture already controls 99 percent of the CAFTA nation’s corn import market, 98 percent for rice and 85 percent for wheat. In fact, the Bush administration’s own studies on CAFTA, prepared by the International Trade Commission, conclude CAFTA will actually increase our trade deficit with Central America slightly—not spur job growth.
• Increase poverty in Central America. Despite overwhelming evidence that Central America’s labor laws and practice allow employers to routinely abuse workers, CAFTA utterly fails to address this problem. CAFTA’s one enforceable workers’ rights provision requires only that countries enforce their own labor laws—laws that even the U.S. State Department has documented as failing to meet international standards. And CAFTA would allow countries to further weaken or gut their labor laws at any time, with no penalties possible.
• Give Big Business a big payoff. CAFTA includes excessive protections for multinational corporations that will undermine the ability of governments to protect public health and the environment. To comply with CAFTA, the U.S. Trade Representative and pharmaceutical companies forced Guatemala to pass data protections that could impose an additional five-year waiting period on generic drugs. Humanitarian organizations, such as Doctors Without Borders, have objected that these provisions in CAFTA will make newer medicines harder to afford.

The Bush administration has refused to include meaningful and enforceable workers’ rights protections in CAFTA—and has gone so far as to suppress a report commissioned by the administration’s own Department of Labor thathighlighted labor abuses in nations that would become part of CAFTA. The Labor Department ordered the contractor, the International Labor Rights Fund, to remove the report from its website, demanded that paper copies be retrieved and instructed the contractor not to discuss the results of the report.

Such censorship seeks to hide the fact that CAFTA’s rules on workers’ rights are actually weaker than the current labor conditions that apply to Central American countries under our unilateral trade preference programs, the Generalized System of Preferences (GSP) and the Caribbean Basin Initiative (CBI). CAFTA’s section on labor actually backtracks from the labor standards in GSP and CBI, which require countries to take steps to afford internationally recognized workers’ rights or lose trade benefits.

These preference programs have been the impetus for improving workers’ rights in Central America: Nearly every labor law reform that has taken place in Central America over the past 15 years has been the direct result of a threat to withdraw benefits under our preference programs.

Working families support free trade. But free trade also must be fair: To workers, to the communities and to the environment. CAFTA is none of these.

We aren’t buying false promises.