CAFTA: Labor Pains and Environmental Flaws

Labor Pains

The Steelworkers report that harmful labor effects of CAFTA include:

• Working conditions in CAFTA countries are often dismal and generally do not meet the most basic standards for workers. Filthy air, undrinkable water, below-poverty wages, grueling hours and abuse on the job are common.

• There are no bans on child labor or forced labor in CAFTA.

• Without incorporating labor standards that can lift workers in CAFTA countries from poverty, the agreement does nothing to create consumers for US-made goods. Like NAFTA, this agreement will create hundreds of thousands of jobs where the workers cannot afford to purchase the products they make. According to Sierra Club’s Pope, CAFTA will “expand the privileges of global corporations at the expense of the environment, working families and communities.”

“The American people want trade, but trade that is safe, clean and fair,” said Pope. USW’s Gerard agrees, calling the trade pact “nothing more than NAFTA on steroids.”

“It entrenches the rights of international corporations,” he told United Press International. “It would lower labor, environmental and living standards internationally.”

Environmental Flaws

The Sierra Club says CAFTA would put communities at risk by setting sharp limits on governments’ authority to protect public health and the environment. Examples of negative environmental impacts include:

• global corporations could sue US taxpayers for cash damages if they feel that, for example, environmental or public health laws and regulations interfere with their profits. Under NAFTA’s similar provisions, several cases have been brought by corporations challenging environmental protections. A Canadian mining company recently sued U.S. taxpayers for $50 million to avoid compliance with a California law protecting indigenous communities and requiring future clean up of the company’s mine site.

• “green procurement” policies could be challenged. If a domestic law requires recycled content, fuel or energy efficiency or renewable energy, such mandates might be challenged as illegal trade barriers.

• Environmental enforcement provisions are weak, giving governments too much discretion to regulate, investigate and comply with their own laws. Making matters worse, existing laws are so weak that environmental damage is inevitable. Both Guatemala and Honduras lack even basic environmental laws. In the four other countries, while there are laws in place, studies show these

laws are not properly implemented or enforced.

SPECIAL INTEREST

With President Bush’s proposed Central America Free Trade Agreement (CAFTA) in trouble, the U.S. Chamber of Commerce launched a public relations campaign in May, funded by such companies and associations as Citigroup, Proctor & Gamble, the U.S. Dairy Export Council and PriceSmart.

The PR campaign featured a barn-storming tour of the US by Presidents of the six CAFTA countries—El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic. Bankrolled by corporations, they fanned out from San Diego to Tampa to tout corporate-managed trade in meetings with governors, newspaper editorial boards and members of Congress. Their message included a list of lies recycled from the Chamber’s earlier effort to enact NAFTA.

Meantime, Public Citizen has exposed a bogus study released by the Chamber in early 2005 projecting wildly inflated gains to the United States and to several state economies from CAFTA. In an eerie repeat of NAFTA promises from a decade earlier, the Chamber study claimed that, if implemented, CAFTA would create more than 100,000 U.S. jobs, generate more than $17 billion in increased sales and provide $3.5 billion in increased earnings for employees in all industries during its first nine years.

RHYMES WITH NAFTA

Since CAFTA would extend NAFTA to six additional countries – including expansion of NAFTA’s foreign investment provisions that create incentives for relocation of US production to low-wage countries – the notion that CAFTA would create jobs or economic gains in the US is dubious.

“Here’s the same special interest source using the same fraudulent methodology to try to get us to buy the same old rotten NAFTA wine poured into new CAFTA bottles,” said Lori Wallach, Director of Public Citizen’s Global Trade Watch.

To read a statement by Wallach on the growing opposition to CAFTA, go to http://www.citizen.org/pressroom/release.cfm?ID=1956.