News & Politics

Yes to Democracy, No to Free Trade

If the U.S. wants to be received as a partner in the Americas, we could start by developing a trade policy that benefits not just U.S. corporate interests, but the vast majority of poor workers and farmers in Latin America.
U.S. Secretary of State Condoleezza Rice recently toured Latin America to promote the "twin pillars of democracy and free trade." Latin Americans, on the other hand, have recently demonstrated that their commitment to democracy is not synonymous with a belief in the so-called benefits of globalization. After two decades of "free trade" economic policies that have failed to eradicate poverty in Latin America, citizens are instead electing governments that advocate for the needs of the majority for health care, education, good jobs, and social security.

During the 1960's and 70's, Latin Americans experienced an average 80% gain in income per person. Not so with the following two decades, when per capita income grew by only 11%. For the last 25 years, Latin American governments employed economic policies mandated by the Washington-dominated International Monetary Fund and the World Bank. After 25 years of privatization of essential public services, de-regulation of industry, and opening up borders to foreign investors, the majority of Latin Americans have less economic opportunity than their parents.

The cure offered by the U.S. to this economic malaise seems to be more of the same. May 28 marked the one-year anniversary of the signing of CAFTA, the Central America-Dominican Republic-United States Free Trade Agreement. Supporters hoped that the deal would have been approved by Congress long ago. But Republicans aren't likely to send legislation to the Congressional floor that they aren't sure they'll win. So far, most estimates give CAFTA opposition -- which now includes many Republicans -- a significant lead. Even pro-free trade Democrats have come out to oppose the deal, and this week the Hispanic Caucus voted 14-1 against it. That means that CAFTA will likely be a huge political defeat for the Republicans.

The Bush Administration has pulled out all the stops in attempting to convince the U.S. public that Central Americans want CAFTA, sending Central American Ambassadors, then Trade Ministers, and recently even their Presidents across the U.S. on pro-CAFTA tours. But anyone with an ear to the ground in Central America knows the opposite; these deals are fiercely opposed by Central American farmers, workers, women, environmentalists, people of faith, youth, and more -- pretty much every group except for the elite business sector.

Even the existence of CAFTA is a manifestation of the diminishing popularity of so-called "free trade" and the erosion of U.S. influence in the area. For the last ten years, the U.S. had negotiated a Free Trade Area of the Americas with 34 countries in the region. But negotiations faltered as many South American nations, including Brazil, Venezuela, and Argentina, resisted the U.S. demands that they hand over their public services, investment, and other key sectors while the U.S. maintains unfair agricultural subsidies that block market access for their exports. When FTAA talks broke down in 2003, the U.S. launched a "divide-and-conquer" strategy, hoping to secure agreements with the weaker countries of Central America and the Andean nations (currently under negotiation). So CAFTA is supposed to be a stepping-stone to the FTAA, but it is one that is likely to crumble under our feet.

Central Americans oppose CAFTA because they've actually reviewed the record of the failed experiment of NAFTA, the model for CAFTA. Just about every promise made about the supposed benefits of NAFTA to Mexico, the U.S., and Canada has proven false. In particular, about 1.5 million Mexican farmers have been pushed off their land due to cheap U.S. corn dumping, devastating rural communities across the country. Families are torn apart as breadwinners migrate to cities, or to the U.S., in search of jobs to feed their children. For farmers, CAFTA is a life or death issue; this March 15, Juan Lopez, a poor farmer in Guatemala, was shot to death by security forces while voicing his opposition to CAFTA.

But it's not just agriculture. Over 250,000 Salvadorans mobilized last year against the privatization of health care that would be mandated by CAFTA. Costa Ricans have fought hard to prevent the privatization of their telecommunications industry. Their current president is afraid to schedule a vote on CAFTA during his mandate, and hopes to leave it until after the next presidential elections. Nicaraguans have mobilized thousands to the streets to prevent privatization of public water that CAFTA would bring. And Guatemalans have resisted the increased patent restrictions included in CAFTA that would leave thousands of people with HIV and other life-threatening illness without access to essential medicines that could save their lives.

Meanwhile, in the U.S., the AFL-CIO, Public Citizen, the Citizen's Trade Campaign, and just about every other human rights, labor, environmental, family farm, and development organization opposes CAFTA. Even the major Latino civil rights groups, many of whom had favored NAFTA ten years ago, oppose CAFTA. It seems that the only sector advocating for its passage is big business.

Bush had tried to sell CAFTA on the grounds that it will help build democracy in Central America, and help in the fight against terror. But the biggest threat to hemispheric security -- the leading cause of death in the region -- isn't terrorism, it's poverty; lack of access to clean water, enough food, and affordable medicine. So Latin Americans find it hard to believe that the privatization of public services like health care and water distribution, or opening up their industries to foreign investment, will make them more secure. That is especially true at a time when the U.S. government has -- with breathtaking hypocrisy -- refused to extradite Posada Carriles, the most notorious convicted terrorist in the hemisphere.

Democratic governance must be combined with sensible national economic policies, so that the poor could hope for a better future. If the U.S. wants to be received as a partner in the Americas, we could start by developing a trade policy that benefits not just U.S. corporate interests, but the vast majority of poor workers and farmers in Latin America.
Deborah James is the Global Economy Director at Global Exchange, an international human rights organization.