Multinational Monitor

APR 2004
VOL 25 No. 4


Competition or Massacre? Central American Farmers’ Dismal Prospects Under CAFTA
by Tom Ricker

Dying for Drugs: How CAFTA Will Undermine Access to Essential Medicines
by Robert Weissman

DeLay, Inc. On the Brink: Prosecutors Probe the Legality of Tom DeLay’s Texas Republican Majority
by Andrew Wheat

The Political Economy of Wild Rice: Indigenous Heritage and University Research
by Winona LaDuke


An Invitation to Disaster: Corporate Power and Central America’s Environmental Future Under CAFTA
an interview with Ricardo Navarro

Generic Pesticides and CAFTA’s Other Assault on Small Farmers
an interview with Román Macaya


Behind the Lines

Leave Central America Alone

The Front
Plea in Boeing Scandal - Sri Lanka Labor Struggle

The Lawrence Summers Memorial Award

Names In the News



Leave Central America Alone

Poor Central America.

Finally emerging from the U.S.-backed wars of the 1980s, Central Americans had reason to hope for a brightening future.

With the winding down of military violence that killed tens of thousands in Guatemala, El Salvador and Nicaragua, there seemed an opportunity for the region to rebuild and flourish.

But it was not to be.

Governed by right-wing administrations that in any case have been constrained in economic policymaking by the demands of the International Monetary Fund and World Bank, the region's economies (with the exception of Central America) have failed.

Now comes the United States offering the lure of a free trade agreement.

Central American governmental leaders and economic elites are embracing the U.S.-Central America Free Trade Agreement (CAFTA), but the agreement promises in virtually every respect to deepen rather than repair the region's problems.

CAFTA, essentially an effort to extend the North American Free Trade Agreement (NAFTA) to the tiny, impoverished nations of Central America, is little more than an initiative for de facto recolonization of the region.

As Tom Ricker reports in this issue, the agreement promises to devastate the small farmers of the region, who will be forced into a hopeless competition with the U.S. agribusiness giants. The outcome of such a competition is not only preordained, it has been precisely modeled in Mexico, where NAFTA has forced more than a million Mexican farmers off the land. The Central American countries remain heavily rural - with about a third of the workforce engaged in farming - so massively disrupting their agricultural sectors will send tremors throughout the region , as tens of thousands of farmers lose their means of support and migrate to capital cities, Costa Rica or the United States.

As "Dying for Drugs" in this issue explains, CAFTA's patent and intellectual property provisions will exacerbate existing health problems in the region. The agreement will enhance the power of Big Pharma, delay the introduction of generic competition for pharmaceuticals, and bleed patients - or deny them access to medicines altogether.

As Ricardo Navarro highlights in this issue's interview, CAFTA also contains an investment chapter that gives foreign companies the right to sue governments directly for many environmental, health, consumer, labor and development regulations that interfere with their profitability. Because an analogous provision in NAFTA is generating increasing controversy - as corporations use the chapter to overturn or deter environmental rules, health regulations and even judicial decisions - U.S. trade negotiators included language in CAFTA to modify the investor rights created by NAFTA. But they left the core provisions untouched - and so the fundamental problems remain.

In exchange for these and other hardships, CAFTA offers to Central America's elite - besides the right for the countries' presidents to have their pictures taken with George W. Bush in a signing ceremony - the prospect of increased exports to the United States of plantation agricultural products, plus low value-added, labor-intensive products (like clothing).

But neither of these is a benefit to the nations' populace. Plantation agriculture presents the familiar problems of land concentration, heavy agrochemical use, and abuse and impoverishment of the workforce. The relatively few jobs plantations provide cannot begin to offset the displacement of farmers from CAFTA.

Increases in clothing and other exports - to the extent they occur, no means a certainty as the world's textile quota system is lifted as early as 2005 and China and other super - cheap producers flood the market - will exacerbate the labor exploitation, especially of women, that is already the bane of Central America.

As the AFL-CIO points out, El Salvador and Nicaragua do not give workers fired for union organizing the right to be reinstated. Throughout the region, fines for labor rights violations are so minimal (and rarely enforced) as to be meaningless. Even Costa Rica permits company unions. (Of course, it is not as if the United States is advanced on these matters, but the situation is qualitatively worse in Central America.)

Rather than seek to remedy these problems, CAFTA promises to deepen them. CAFTA "fails to require compliance with even the most basic internationally recognized labor rights norms and specifically fails to protect women workers against discrimination," concludes Human Rights Watch in a March briefing paper. "While the accord calls on countries to uphold their own labor laws, which may or may not be consistent with international standards, it provides a weak enforcement mechanism for that limited commitment."

But while it is a certainty that CAFTA will be a disaster if adopted, it is by no means a certainty that the agreement will come into force. The U.S. Congressional vote on CAFTA will be tightly contested - so much so that it will likely be delayed until after the November elections, when Members of Congress are more willing to support unpopular legislation - and the agreement is eminently beatable.

Defeat of CAFTA would be a tremendous expression of solidarity by the people of the United States with the people of Central America. It would have broader impacts, too, throwing a roadblock in front of the U.S. strategy of driving countries around the planet into bilateral and mini-regional trade agreements that permanently pry open national economies to the multinational corporate colonizers.


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