Organic Consumers Association

Background Information on Central America Free Trade Agreement (CAFTA)

From the Committee in Solidarity with the People of El Salvador
Posted 02/27/2003

Introduction: Information on the Fast in El Salvador:

Two U.S. Citizens Begin 7 day Water-Only Fast and Vigil in front of U.S. Embassy in El Salvador

At 9:00 a.m. on Saturday February 22nd, 2003 two U.S: citizens, Matthew Eisen and Thomas Meyer, will begin a 7 day water-only fast and vigil in front of the U.S. Embassy in El Salvador protesting United States trade policies.

The fasters are Catholic Missionaries from Cincinnati, Ohio protesting the 2nd round of negotiations of the Central American Free Trade Agreement (CAFTA) to be held in Cincinnati from Monday February 24th through Friday the 28th. The action is aimed at drawing attention to what the fasters call the economic war against the poor of Central America. The fasters site concerns that NAFTA (North American Free Trade Agreement between Mexico, Canda and the United States signed in 1994) has reaked havoc on the poor of Mexico and their environment and CAFTA will do the same to Honduras, Guatemala, El Salvador, Costa Rica and Nicaragua.

Salvadoran Govermental Human Rights officials (Procuraduria de los Derechos Humanos) will be present to observe that the Salvadoran National Police, protecting the embassy compound, will respect the constitutional rights of the U.S. citizen´s as they begin their protest.

"CAFTA is being run through on a fast track denying participation of the Central American labor, human rights and environmental movements, for this reason, we oppose CAFTA and ask U.S. Trade Representatives to stop negotiations as they are currently modeled," stated Matthew Eisen, 31 of Delhi Township.

"We demand negotiations that promote FAIR trade, not FREE trade! NAFTA has been a disaster for the Mexican poor and their environment, we will not stay silent as U.S. economic policies destroy the poor and environment of El Salvador!" added Thomas Meyer, 25 of Harrison.

Throughout the week the fasters and their supporters will be holding daily 9:00 a.m. press conferences with Salvadoran leaders from the women´s, labor and environmental movements.

Central America Is Not For Sale!

What is the U.S.- Central American Free Trade Agreement (CAFTA) and why
should we oppose it:

The U.S.-Central American Free Trade Agreement (CAFTA) is a free trade
agreement between the U.S. and the five Central American nations of
Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. Official
negotiations for CAFTA open between trade ministers of the six governments
on January 27th in Costa Rica and will continue once a month until December
of 2003. The U.S. and Central American governments hope to have the treaty
finished and ready for approval by the national legislatures of the six
countries by the end of 2003.

CAFTA is a continuation of the same policies put forward in the North
American Free Trade Agreement (NAFTA), this time between the U.S. and the 5
Central American countries. The implementation of CAFTA is seen key by the
Bush administration and multinational corporations in obtaining the Free
Trade Area of the Americas (FTAA), which would cover all the countries in
the Western Hemisphere except Cuba. CAFTA is closely linked to the Plan
Puebla Panama (PPP), a 10-year long, multi billion dollar mega development
project that will construct physical and industrial infrastructure
throughout the region. Civil society groups in Mexico and Central America
see the PPP as paving the way for CAFTA and FTAA. These groups have
protested the PPP because of the devastating impact that it will have on the
environment, indigenous communities, and local economies.

Since President Bush announced his intention to implement CAFTA in January
of 2002, very little public information has been released. The U.S. has
released its objectives for the negotiations, but not its official
negotiating positions. Public hearings were held in November of last year
and a Congressional Oversight Group for CAFTA, FTAA, and other free trade
agreements has been set up, but genuine input and participation in the
negotiations by civil society groups in the U.S. and the five Central
American countries is non-existent. At the same time, the U.S. Business
Roundtable and financial elites in Central America have constant access to
their government negotiation teams and trade ministers. The nine rounds of
CAFTA negotiations will held in secret.

If adopted CAFTA would have the following consequences:

Privatization of Public Services:

A key component of free trade agreements is the privatization of public
services. The logic of neoliberalism (corporate globalization) that drives
these agreements sees government subsidies and support of public services
such as water, education and healthcare as unfair "barriers" to trade and
competition. However, privatization benefits only a tiny political and
economic elite at the expense of the general public. Privatization has meant
higher prices, poorer service, union busting, and worsened working
conditions. Under CAFTA the state run health care, education, electrical
generation, and water systems could be privatized and sold off to
multinational corporations.

Increased Corporate Power, Erosion of Democracy, and Lack of Transparency:

Working hand-in-hand with privatization, free trade agreements like CAFTA
would weaken regulatory measures and open the way for increased corporate
exploitation in Central America and the U.S. The examples of Enron and
WorldCom show how corporations in the United States use the deregulated
"free" market to destroy lives in the name of profit. It is no coincidence
that Enron – facing scandal in the US - is setting up shop in Nicaragua and
other countries in the Global South. CAFTA would give companies free reign
in Central America, obliterating the democratic process by robbing citizens
of the power to shape their own destinies.

Additionally, CAFTA will most likely contain the Chapter 11 investor rights
provision of NAFTA. This would allow foreign corporations to sue national
governments for laws or regulations that were shown to have caused a loss in
actual or even potential future profits. A secret tribunal whose members
would be unknown to the public would hear such cases. Their rulings could
not be appealed and would overrule existing local, state, and federal laws
and international agreements on labor and human rights. Such elements of
CAFTA would erode democracy and allow for decisions to be made behind closed
doors that would affect the lives and well being of millions people. The
U.S. is pushing NAFTA like investor state dispute mechanisms in the FTAA, so
we can also anticipate them in CAFTA.

Destruction of agriculture and small farmers:

CAFTA would remove all tariff barriers the 5 Central American countries now
have on imported agricultural products. This would allow cheaply grown and
heavily subsidized U.S. corn and other basic grains to flood local markets.
Small farmers in Central America, already devastated by the importation of
cheaply grown U.S. basic grains, years of drought, and the massive fall of
coffee prices on the world market, would face the extinction of their
livelihoods. Under CAFTA millions would be forced to migrate to large urban
areas to work in the informal sector or maquilas (sweatshops), or they would
risk their lives in dangerous journey north to seek work in the U.S., facing
a harsh anti-immigrant climate.

Weakening of laws protecting workers rights and the environment:

Laws protecting labor and human rights and the environment would be greatly
weakened. The past few months have seen large-scale governmental assaults on
public sector unions in El Salvador trying to stop the privatization of the
electrical generating and public health care systems. Workers have been
violently attacked by riot police and their rights under the Salvadoran
labor code and constitution trampled upon in an attempt to bust their
unions. In Guatemala union members, peasant organizers, and human rights
activists face an increasing climate of government repression, including
murder and kidnapping. Social movements and unions are also under attack in
Honduras and Nicaragua.

If implemented, CAFTA could overturn laws in the 5 Central American
countries protecting labor and human rights. Claims by the U.S. and Central
American governments that workers rights will be respected and protected
under CAFTA seem farcical given the current repression now occurring in the

Central America is one of the most biologically diverse areas in the world,
containing thousands of diverse and unique species of plants and animals.
Laws protecting the environment could be gutted, declared as an impediment
to the potential profits earned by foreign corporations. The corporations
could then sue national governments under Chapter 11 provisions. The
following example shows what could very well happen under CAFTA. After the
implementation of NAFTA in 1994, residents in the Mexican state of San Luis
Potosi refused to accept a toxic waste site that the U.S. corporation
Metalclad wished to located in their communities. Metalclad then sued the
Mexican Federal government using Chapter 11 provisions and won a judgement
of $16 million.

Social movements resist CAFTA:

Throughout Central America labor unions, peasant organizations, indigenous
and women’s groups, and other social organizations are actively resisting
CAFTA. On October 12, 2002 at least 40,000 people organized coordinated
protests through the region, blocking key points of the Pan American highway
and border crossings. Since October there have been 4 massive marches of at
least 100,000 people each by social organizations in El Salvador protesting
the attempt to privatize the public health care system. A Central American
wide coalition of trade unions, peasant and indigenous organizations, women’
s and environmental groups, and non-governmental organizations have joined
together to fight CAFTA. They are struggling for their self-determination
and to defend alternative models of social and economic development
benefiting the majority of people in their countries and not multinational


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