Another Economic Dead-End

Jerry Ortiz y Pino
5 min read
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The president of El Salvador, Tony Saca, was in town last week, pumping hard for support for the Central American Free Trade Agreement (CAFTA). His audience at a breakfast at the Hispanic Cultural Center was the Greater Albuquerque Chamber of Commerce, one in a two-week cavalcade of infomercials and pep rallies across the country.

Saca, before he got into office, was a radio disk jockey. That'll turn out to be a useful preparation for this trip, as it will take all the gung-ho barkering that deejays specialize in for his mission to the U.S. to meet with any success.

El Salvador is one of three Central American countries to have ratified CAFTA. Three others and the Dominican Republic are cautiously observing the process; reluctant to jump in but afraid to be left out. President Bush is strongly supportive of it and wants Congress to act by Memorial Day, which is why Saca was brought in to rouse the Republican supporters among America's small business community.

Like so many Bush initiatives, CAFTA (“free trade”) sounds a whole lot better as a bumper sticker than it turns out to be as real world policy. One thinks immediately of other examples: “Clear Skies” programs that permit air pollution; “Healthy Forest” undertakings that wipe out trees and “No Child Left Behind” laws that actually leave a lot of kids uneducated.

Similarly, “Central American Free Trade,” upon closer examination, has a few problems with it—enough to actually mean it would probably lead to greater, not reduced, poverty in that part of the world.

First, the cornerstone of the agreement would be the elimination of tariffs on products moving in and out of the countries which join the treaty. While this sounds like a good thing, the experience of the past dozen years under NAFTA (a similar “free trade” agreement among Canada, Mexico and the United States) shows that it is most likely to accelerate the process of the industrialization of agriculture in the region.

In Mexico, over a million small farmers have been driven off the land during the NAFTA years, unable to compete with giant agribusinesses which establish links to U.S. markets, transportation providers, pesticide companies and fertilizer suppliers. In essence, the expansion of enormous corporate farming enterprises has flourished under NAFTA and would be likely to do the same under CAFTA.

The ability of small-scale subsistence farmers to resist pressure from large agri-corporations is not likely to be greater in Central America than it has been in the U.S. If so, the number of landless peasants in those countries will grow, and their only options for supporting their families will be emigration to the U.S. (for the men) or employment in the textile factories (maquiladoras) for the women.

Second, CAFTA is, if anything, even worse than NAFTA in its disregard for environmental protections. Individual states which sign the treaty will find that they have hamstrung their ability to maintain clean air and clean water rules. It is another race to the bottom, with Mother Earth (and her poorest children) as the losers.

The treaty stacks the deck in favor of corporate operations, clearly placing investor profit ahead of sustainable citizen lifestyles. As with so many of the decisions that get made with the bottom-line in mind, CAFTA would put all the emphasis on short-term profits and none on long-term consequences. It is a script that has produced many of the globe's catastrophic environmental disasters.

Finally, the clincher is that CAFTA, no matter which countries in Central America sign it, will not be signed by China. And there is precious little that can be manufactured in this hemisphere, regardless of tariff elimination, that can't be manufactured in China for half the cost. The sad reality is that we in the U.S. produce very little that Central Americans can afford, and that Central Americans produce very little that we can't get faster, cheaper, better (even factoring in shipping costs) from China.

Tony Saca hinted at this pitiful state of affairs during his comments to the press here in Albuquerque, when he noted that one of the items he hoped to export from El Salvador if CAFTA passes (unable to compete for coffee, sugar or tropical fruit markets) was gourmet iguana meat, considered a delicacy by many in Asia and Latin America (but not, unless I missed it, in Peoria).

The pace of globalization has far out-stripped the ability of the world's trade diplomats to act responsibly. Wal-Mart controls what we consume in this country, not the U.S. Department of Commerce. And China controls what we export from this country, not the Bush administration or the World Bank. Let's not forget, it's also China we are borrowing billions of dollars from in order to sustain our federal spending in these times of sprawling deficits.

We are fast becoming the enormous sow lolling in the world's shady backyard, our function limited to consuming whatever we are fed. Our appetites are how we are defined and they spell, in sum, c-o-n-s-u-m-p-t-i-o-n.

It's too bad that for Central Americans CAFTA won't do anything to change that. Maybe they should be negotiating with Wal-Mart and the Chinese, instead of with our government.

The opinions expressed are solely those of the writer. Send comments to; email the author at

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