May 6, 2005

NAFTA vs. CAFTA

By Katia Lopez-Hodoyan

More than ten years have passed since NAFTA (North American Free Trade Agreement) was implemented in Canada, Mexico and the United States on January 1, 1994. Along with the passing of this multifaceted accord came mixed feelings on the benefits or repercussions that could come about with this agreement. Eleven years later, those feelings are still mixed and the main economic beneficiary is still debated. Amidst this examination however, rises a new set of concerns regarding CAFTA (Central American Free Trade Agreement). An accord with a different name, time frame that’s geared toward different countries. Yet despite these changes, many fear that CAFTA will be a replica of the controversial NAFTA which benefits have been questioned for so long.

CAFTA attempts to create a free trade accord among the United States and Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador and the Dominican Republic. The 31 million inhabitants that populate these countries are mainly employed by the agricultural sector in their nation, thus the majority of the businesses would involve direct trade of these goods from Central America to the U.S. The creation of foreign investment companies or ‘maquiladoras’ overseas would also be one of the main focal points of this trade agreement. Nonetheless, because of the plummeted job rate that took place in the U.S and Mexico during the execution of NAFTA, many fear that CAFTA will be formula for economic disaster for both the less privileged and participating nations as a whole.

Lourdes Lujan who heads an environmental labor group in Tijuana, has worked in a local ‘maquiladora’ for over a decade. Her main concern on NAFTA deals with the high increase of toxins left over by foreign companies who disregard environmental laws when overseas. In addition, her hometown of Chilpancingo in Tijuana has seen an augmentation of diseases caused by the inhalations of toxic substances. She fears CAFTA will do the same for Central America.

“I know foreign investors come in because of the cheap labor,” said Lujan. “But for years now people have been exchanging cheap labor for our health.”

It will be in mid May when congress votes on whether of not to pass CAFTA. According to members of the Environmental Health Coalition based in National City, both Republicans and Democrats are split amongst their own political parties on how to vote for this free trade agreement. This is also seen at a local level, where Congresswoman, Susan Davis who represents the 53rd congressional district has not yet voiced how she will vote on this measure. Because of this, nearly 100 non-profit political groups gathered outside her office this week to protest her indecisiveness on CAFTA. With chants that echoed “Come on Down,” and “We’ll be back” the group circled Davis’ office entrance hoping to trigger a “no” vote on this free trade agreement.

“We are not asking for international trade to be abolished,” said Magdalena Cerda from the EHC. “ What we want is for CAFTA to be made into a fair agreement. As of now, it’s the same thing as NAFTA which brought nothing good to our border zone.”

In addition, many are weary that powerful North American companies will set up their business in foreign soil only for a limited amount of time. After their gains have been gathered, some companies pack their belongings in a few days and never return back, leaving payments, wages and state implemented fines unattended.

“Some companies come down. Gain profits and then declare bankruptcy so that they don’t have to pay anything outstanding,” said Cerda. “It’s been known to happen quite often. We call them swallow industries. They are here one minute and gone the next.”

Perhaps the effects of NAFTA are best seen within the Tijuana/San Diego border region where trade of both products and employees takes place on a daily basis. Some believe that NAFTA is an outstanding agreement, which created a surplus of employment that would have otherwise never existed. Others on a different side of the spectrum though, believe that massive trade harmed the independence and profits gained by farm workers who had to compete with powerful industries. Nevertheless, the current issue seems to lie on whether or not CAFTA will be passed by congress this month. If so, it seems inevitable that the economic and social changes that took place in the border region will duplicate themselves in sectors of Central America. Only time will tell.

To voice his concerns, comments and siding with CAFTA, the president of the Republic of El Salvador, Elias Antonio Saca will visit San Diego in a free event sponsored by the United States Chamber of Commerce and the Institute of the Americas. The forum will focus on the business opportunities that can arise from CAFTA in the state of California. The event will take place in UCSD’s Great Hall room on Monday May 9 from 12:00pm to 1:30pm. RSVP is required and will be accepted on a first come, first serve basis.

Return to the Frontpage