CAFTA


"CAFTA is worse than NAFTA... a sweeping protection program for global corporate investors that wil (1) give foreign corporations greater legal rights than we citizens have in our own country; (2) allow multinational corporations to override our laws (national, state and local) whenever U.S. law conflicts with their profit expectations; and (3) usurp the Constitutional authority of U.S. courts by unilaterally transferring jurisdiction over these corporate-state conflicts out of our judicial system into super-judicial, supranational, corporate-friendly, global-trade tribunals which operate in secrecy and are even authorized to overrule U.S. Supreme Court decisions...

"...Bush's assault is buried in the arcane, corporate-written language of the latest "free trade" scam, called CAFTA -- the Central American Free Trade Agreement...

"Not only does it extend all of the job-busting, farm-killing, environment-exploiting provisions of NAFTA to six more countries (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua), but it also expands the ability of foreign corporations to assert their profit interests over the people's interests, both in the U.S. and in the six Latino nations.

"The Bushites have declared that CAFTA is their number-one trade priority...

"NAFTA... as we've learned the hard way, they lied. Far from generating a surging trade surplus and a flood of new jobs, as promised, that deal has eliminated more than two million US jobs and turned our $1.7 billion trade surplus with Mexico into a $45 billion deficit. Meanwhile, in Mexico, the availability of stable, full-time jobs has shrunk, and the pay and working conditions of most Mexican workers has deteriorated...

"...our people's sovereignty [is] already being stealthily swallowed up by NAFTA--a vacuuming up that CAFTA would switch to high gear...

"...chapter 11... of NAFTA... gives foreign corporations radical power... to use a private enforcement mechanism to impose their profit interests over all other interests.

"For example, if a Mexican or Canadian corporation doesn't like one of our environmental restrictions, it can file a Chapter 11 action demanding that either the restriction be eliminated or that our federal government make a huge cash payment as compensation...

"NAFTA has elevated this (and any) self-serving corporation to the level of a sovereign nation, on a par with the government of the United States of American...

"So far, 42 corporations have filed NAFTA cases against laws and regulations set by supposedly sovereign governments in the U.S., Canada, and Mexico...

"But CAFTA goes where even NAFTA did not dare to tread. It would expand the scope of corporate protectionism through two provisions. One declares that the corporate investments to be protected from public actions include not only real property, but also the owners' "assumption of risk" and their "expectation of gain or profit." Hello. This officially sanctions corporate socialism, making the tas-payers liable for corporate business risks and responsible for the profits its owners "expected" to make.

"Second, a little technicality in Article 10.12 of CAFTA broadens the corpoirate reach dramatically. Under NAFTA, a U.S. corporation cannot file a case with these tribunals against our own national, state, or local laws. But CAFTA rips a multibillion-dollar loophole into that prohibition. It would allow the foreign subsidiaries of U.S. corporations to file such cases against national, state, or local government actions here at home. Unlike smaller businesses, global corporations have subsidiaries everywhere, so this gives them a right that our hometown companies don't have. Phillip Morris, for example, could use a Central American subsidiary to challenge U.S. tobacco laws in a CAFTA tribunal...

"Article 11 [of CAFTA]... local government services (such as education, energy, and health care)... if a local government function in the U.S. or the other six nations is in competition with private firms that provide such services, then the government must allow all corporations... to bid on privatizing that public service...

"Article 11.8(2)... allows the secretive trade tribunals to render judement on whether any particular government regulation in the service sector is "necessary." Requirements to protect the privacy of our personal information, for example, could be subject to challenge by foreign corporations under this proviso, allowing a CAFTA tribunal to decide if such a requirement is necessary, regardless of the fact that We the People had already decided through our legislative process that it is necessary...

""Free trade" is now a bitter epithet in Latino countries--a euphemism for corporate exploitation, expropriation and domination...

"In Honduras, when the congress rushed through the ratification of CAFTA, more than a thousand angry demonstrators surrounded the capital building, causing the terrified legislators to flee... voted to scrap Congress's ratification...

"Likewise, opposition in Costa Rica is so intense that the country's president now says that he won't even submit the pact for ratification" (Jim Hightower and Phillip Frazer. "A Corporate Plan to Trump Our Laws and the Constitution." Hightower Lowdown, June 2005).


"...in terms of every promise made by its proponents, NAFTA has failed: An estimated 879,000 jobs have been lost in the US; manufacturing wages have fallen on both sides of the border; nearly 2 million Mexican farmers have been displaced by US-subsidized food imports; already-abysmal environmental conditions have even worsened along the border; and a modest US trade surplus with Mexico has turned into a $45 billion deficit. NAFTA-style "free trade" has amounted to merely exporting US factories and jobs to low-wage Mexico and importing finished products, with most Mexicans getting poorer and seeing US-made consumer goods move further out of reach...

""Free Trade agreements have been described as tools to open up new markets for American-made goods," Spotts notes, a proposition readily swallowed by free-market fundamentalists in both parties and the media corps. This notion is highly dubious, given that Central America's combined population of 37 million has far less buying power than the three million people of Kansas...

"...the "free trade" model is based on short-term plunder, untroubled by concerns about developing local purchasing power. It entails simply providing elaborate investor protections for corporations temporarily setting up shop in low-wage nations to maximize their profits. So don't bother with paying for clean water, sewers, or safe streets for your workers in places like Juarez, Mexico, which boasts the biggest concentration of US-owned maquiladora plants, typically paying 60 cents to $1 an hour.

"And when an even lower-wage opportunity crops up in, for example, China, where pay may run as low as 20 to 30 cents an hour, just relocate your operation there. While Mexico gained 900,000 low-paying manufacturing jobs between 1993 and 2000, it has since lost about 250,000 of these jobs. US-based and other transnational corporations are now bypassing Mexico in favor of China, which offers a regimented, well-trained workforce at rock-bottom wages" (Roger Bybee. "CAFTA a bomb for working Americans." Progressive Populist, June 1, 2005: 11).


"Is there a real solution to the problem of losing jobs overseas? It does not make sense to focus our anger at the Chinese worker: You can't blame somebody for wanting a better job. We should not blame business leaders, either; outsourcing and offshoring are often the rational and necessary choice to compete under our current system of subsidies and trade laws. These people take advantage of outsourcing for the simplest of reasons: because they can...

"One intelligent response to outsourcing would be to stop passing the same trade agreements over and over...

"By end of 2005, it is projected that more than 830,000 American tech jobs will have moved to low-wage countries like India and China...

"Put simply, if your job uses a phone, a computer or a welding torch, outsourcing trade policies will affect you. If you can telecommute, your job can likely be outsourced...

"CAFTA--NAFTA's big brother... we can expect the same results of more lost jobs. And we should ban the billions in public subsidies that go to government contractors who move jobs overseas" (Andy Gussert. "Shoring up trade laws." Progressive Populist, May 1, 2005: 9).


"From The Washington Post: "With the Central American Free Trade Agreement (CAFTA) in serious trouble, a prominent business leader recently laid it on the line: Business groups are prepared to cut off campaign contributions to House members who oppose the pact. 'If you are going to vote against it, it's going to cost you,' " said Thomas J. Donahue, president and CEO of the US Chamber of Commerce" ("Costly CAFTA Votes." The Progressive, August, 2005: 11).


Colby Glass, MLIS