What is CAFTA?

CAFTA is a proposed agreement among the US, the Dominican Republic and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Its goal is to increase trade among the seven nations by eliminating “at the border” taxes on imports, called tariffs, and caps on quantities of imports, called quotas. Under CAFTA, the US will accept unlimited shipments of all agricultural products from the other six nations, except for sugar.

Like other “free trade” agreements, CAFTA is dangerous because it treats food like any other tradeable product that should be subject to market forces – as opposed to something necessary to sustain life. These agreements shred government policies that protect local farmers and maintain food sovereignty, calling them “protectionist” barriers to trade.

This type of trade, however, isn’t truly free. Every year, the US hands out tens of billions of dollars in subsidies to large-scale producers, enabling them to sell food at prices significantly lower than the cost to grow it. This unfair advantage to agribusiness has bankupted untold thousands of small-scale farms throughout the US and Latin America.
A resounding number of family farmers, human rights advocates, unions and environmentalists in all seven countries strongly oppose CAFTA, for fear it would eliminate jobs, wreck the environment, erode labor rights and increase wealth disparity.

NAFTA Redux

The text of CAFTA is almost identical to the North American Free Trade Agreement, which includes the US, Canada and Mexico. Since going into effect in 1994, NAFTA has destroyed jobs, the environment and ways of life throughout the continent.

NAFTA’s record gives a clear indication of the damage CAFTA could inflict. More than 38,000 small farms in the US have gone out of business since NAFTA took hold.  Fruit and vegetable growers were hit particularly hard by surging imports from Mexico, where produce can be grown year-round, and food safety, environmental and labor standards are not as strict. At the same time, most Mexican farmers haven’t benefitted from increased exports to the US, as production is concentrated in a few large farms in northern Mexico.  

Despite some restrictions in the last-minute “sugar deal” (thrown together to garner Congressional votes), CAFTA could spell devastation for U.S. sugar farmers. “This is literally a fight for our very survival,” said Louisiana sugarcane farmer John Gay. “It’s a fight for a way of life and for Louisiana’s 250-year-old sugarcane industry.”  

Who Loses in Central America?

For the two-thirds of the poor in Central America who live in rural areas and rely on agriculture for employment and food security, CAFTA could have a devastating impact. The treaty would require Central American nations to phase out tariffs on the basic staples of rice, beans, yellow corn and dairy products, on which the livelihoods of 5.5 million small- and medium-sized farmers depend.

One need only look at post-NAFTA Mexico to see the future of Central America. Mexico now imports more than four times as much corn as it did when NAFTA kicked in.  Nearly 2 million farmers have been forced off their land; 80 percent now live in poverty.  Those who continue to grow corn now earn half of what they once received for their crop.  Nor have Mexican consumers necessarily enjoyed savings at the market; the price of corn tortillas, for instance, has risen 50 percent or more.  

And the Winners Are…

Standing to benefit most from CAFTA are large corporations such as Cargill, Chiquita, Dole, Del Monte and Riviana Foods, which seek to exploit cheap land and labor in developing areas, and charge top dollar for their products in the US and other developed nations. Agribusiness giants already have disproportionate power to control market prices and the economic destiny of farmers.

What Now?

The fight over CAFTA is not over. Facing a growing majority of constituents opposed to the treaty, Central American legislators are hesistant to dismantle their own laws. In Costa Rica, where CAFTA has not even been voted on, debate over the treaty is a heated issue in the current presidential campaign.

A Different Way

If the people of Central America reject CAFTA, it would send a powerful signal that the emerging corporate-dominated trade regime will not be tolerated. Instead, global trade policies should value human life, dignity, sustainable development, public health and national sovereignty over the interests of a small elite.