When Pat Buchanan and Michael Savage agree with the left-wing of the democrat party you know something is up. Savage has been railing against CAFTA for quite sometime and he has lots of liberal company. Here is Nancy Pelosi's take:
"...most Democrats are opposed to CAFTA on the grounds that its labor provisions are not strong enough. House Minority Leader Nancy Pelosi, a California Democrat, said on Thursday that 90 percent of party members in the House could vote against the pact." From the Washington Post.
Savage always say when the dems & repubs agree the people are getting screwed, well the same could be said about this. There is no reason to shut out Central America from the rest of the world. Free-trade agreements allow countries to begin implenting international rule sets for trade and start intergrating their economies. This can only be a good thing. Outsourcing is a fact of capitalism, it is not a bad thing.
It must suck to lose a nice paying job to someone in another country but other people need jobs too. Many complain about giving so much in foreign aid every year, well foreign direct investment is private money and is superior to the US giving welfare to the poor nations. Historically companies have tended to invest in North America, Europe and South Asia. The poor regions, Central America, Africa, the Middle East and Central Asia have had a much lower investment levels. Now thanks to these free trade agreements Central America can begin to enjoy more investment and hopefully a better future. We should hope that these poor countries can lift themselves out of the global gutter and begin to fully support themselves.To end the welfare payments we need to help bring these other nations into the WTO and begin allowing them to compete in the world market.
The problems these poor nations face is the same as the problems poor people face, that is coming up with money to use in order to create proper infrastructure and proper security to support economic growth. At the end of the 90's foreing direct investments had outpaced official developmental aid by $4-$1. This means the most efficient ways to get poor regions such as Central America is through foreing direct investments.
I am not so naive to believe that CAFTA alone is going to solve the problems of Central America, just as NAFTA did not turn Mexico into a thriving economic power. That being said this the first positive step in the right direction. Undeveloped nations need to become more connected with the rest of the world not less. The WTO is a great place to start the connection.
Once the US was the cheap labor capital of the world, soon China will be outsourcing, if we play are cards right hopefully to a more intergrated Africa and Latin America. Only then will the inequality in the world begin to shrink.
2 comments:
You make a lot of assumptions about CAFTA - namely, that it actually is a free trade agreement, and that it will be a boon to the average Central American. I think both assumptions are questionable at best.
CAFTA is actually highly protectionist - that is, it protects the rights of the transnational corporations who basically wrote it, to the detriment of local democracy. For example, CAFTA seeks to protect the pharmaceutical industry from competition by legal generic brands . Guatemala, for example, was forced to repeal its law allowing generic medications in order to come into compliance with the corporate protectionist provisions of CAFTA - http://www.washingtonpost.com/wp-dyn/articles/A11310-2005Mar29.html
How does protecting big pharma from competition promote the ideals of "free trade" and free market capitalism?
Among other corporate give-aways granted under CAFTA are "investor" protections which allow corporations to sue local governments over estimates of *future* lost profits. As you can imagine, this opens the door wide open for all kinds of frivolous law suits. For example, waiting eagerly for the passage of CAFTA is Harken Energy, which has a lawsuit pending against the government of Costa Rica. Harken's proposal to drill for oil Costa Rica's rich marine eco-systems spectacularly flunked environmental review by the democratically elected government of Costa Rica. So Harken has a lawsuit against Costa Rica for $57 billion - that's right, *billion* - dollars. This is to cover the $12 million Harken already invested in the venture, as well as what it estimates are its lost future profits. The entire GDP of Costa Rica is only $37 billion!
http://www.alternet.org/story/18258
Here's what happens under the terms of the "future lost profits" scheme: corporations propose extraction of resources from the most environmentally sensitive areas they can think of with the express purpose of triggering a rejection by local governments on environmental grounds. They are then able to bring law suits for whatever they estimate are their future lost profits. Normally, exctraction of petroleum is a risky venture - but in this case, the corporations get to have their profits risk-free. Taking on risk is an essential part of free market capitalism. How does this sort of risk-free coddling of corporate interests support the ideals of the free market?
But such concerns are not limited to developing countries. Here in California, for example, a law was passed banning the use of the gasoline additive MTBE, a carcinogen that has contaminated most of the state's drinking water. A Canadian company that produces MTBE is now suing California for nearly $1 billion under the terms of NAFTA. It seems that the voters' wishes to not drink carcinogenic substances constitute an illegal trade barrier.
NAFTA in fact provides a substantial rebuttal to your basic assumptions regarding the supposed economic benefits of CAFTA. For example, the promise of NAFTA was that greater access to the markets of Mexico and Canada would boost US exports. The reality: the US trade suprplus with Canada and Mexico has turned into a skyrocketing trade deficit since NAFTA. http://www.afsc.org/trade-matters/trade-agreements/NAFTA.htm
*The NAFTA promise: access to US markets would be a boon to agricultural production in Mexico. The reality: while some specialized export sectors have seen a boost, more than 1.5 million Mexican subsistence farmers have been forced off their land, primarily due to the dumping of highly subsidized US corn. This in turn has swelled the pool of reserve labor, further depressing wages across all sectors.
http://www.organicconsumers.org/chiapas/nafta040504.cfm
* The promise: increased manufacturing production by trans-nationals in Mexico would boost wages there, which in turn would decrease illegal immigration to the US. The reality: while GDP has increased, overall wages and employment have fallen in Mexico, and illegal border crossings have skyrocketed.
http://www.corpwatch.org/article.php?id=661
* The promise: higher exports of consumer durables would lead to an increase in manufacturing jobs in the US. The reality: the US has suffered approximately 800,000 NAFTA-related job losses in the manufacturing sector.
Not all of these trends can be exclusively blamed on NAFTA, but it is certainly fair to say that there is a significant gap between the promised benefits and what actually happened. We should carefully bear that in mind before merrily trundling off to enact CAFTA.
Again, free trade advocates have to look more closely at the actual provisions of CAFTA. Is this really a free trade agreement? As you noted, there are currently almost no tariffs and trade barriers between the US and Central America under the provisions of the Caribbean Basin Initiative. So what does the cause of free trade gain by enacting CAFTA? And how do provisions designed to protect corporate interests constitute a free market? If labor and environmental provisions constitute market distortions, then so don't coddling of corporate interests?
And how do such giveaways to corporations make US companies more competitive? Doesn't this sort of welfare - like the welfare given to poor individuals - in the long run actually make US companies less competitive and less innovative?
The reason quite a few Republicans and Free Traders are against CAFTA is that it is against the ideals of markets free of external interventions and distortions. Furthermore, it allows US companies to succumb to the "soft bigotry of low expectations".
wow thats somethin to think about
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