CAFTA Could Cause 1000s of Farmers to Lose Jobs

CAFTA Could Cause 1000s of Farmers to Lose Jobs

CAFTA Would Likely Cause Thousands of Central American Farmers to Lose Their Jobs as Highly Subsidized U.S. Agricultural Goods Flood Their Markets

The countries of Central America — with predominantly agricultural economies — stand to gain little trade benefits from the proposed Central American Free Trade Agreement (CAFTA), as most of their exports already enter the U.S. duty free under the Reagan-era Caribbean Basin Initiative (CBI).

- CAFTA will not lead to job creation within the United States, but is almost certain to accelerate the continuation of manufacturing job loss.

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Agriculture has been the Mexican economic sector most damaged by the implementation of NAFTA, and Central American countries would stand to be even more wounded, as agriculture is one of the region’s major industries, employing approximately one half of its population and accounting for over 30 percent of Nicaragua’s gross domestic product (GDP) and 22.6 percent of that of Guatemala. Despite Central America’s far lower wages than their U.S. counterparts, rural farmers still cannot compete against U.S. farmers who receive an average of $21,000 annually in U.S. government subsidies. The Bush administration, although claiming to promote trade liberalization, recently guaranteed $170 billion in agricultural subsidies to U.S. farmers over the next ten years. If CAFTA were approved, these subsidies would automatically afflict upon Central American farmers a built-in disadvantage for at least a decade.

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Telecommunications liberalization is an issue that is particularly sensitive for Costa Rica. The country’s current telecommunications are run by a state-owned monopoly, which the government argues would require a constitutional amendment in order to liberalize. It is questionable whether Costa Rican President Abel Pacheco could muster enough votes to force through such an amendment. The many country-by-country obstacles that still remain in finalizing CAFTA pose the question whether it is feasible to believe that all of the remaining negotiations can possibly be completed by the December deadline.

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http://www.scoop.co.nz/mason/stories/WO0312/S00034.htm