When the Guatemalan government ratified the Central American Free Trade Agreement (CAFTA) on March 10, the wheels of globalization took a big turn forward. With Guatemala becoming the third country, after El Salvador and Honduras, to approve the agreement, the stage is now set for a ratification battle in the U.S. Congress.
Ignoring protests by thousands of unionists, farmers and students that temporarily shut down Guatemala City and its own initial promise to put the issue to a national referendum, Guatemala’s Congress dashed hopes that it might hold out against pressure from the U.S. by signing the agreement. Following the ratification, President Oscar Berger cracked down harshly on protests, deploying 500 soldiers with water cannons, tear gas and truncheons. Two people were killed and many more injured when government troops opened fire on demonstrators in the provincial capitol of Hoehuetenago.
Like its big brother the North American Free Trade Agreement (NAFTA), CAFTA removes tariffs and other “trade barriers” between the seven signatory countries – Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. Proponents of the agreement argue that the accord will boost exports and productivity, create jobs, and open up new markets.
Factory owners in Guatemala hope the agreement will stem the tide of textile jobs moving to China. However, unions in both North and Central America, well aware of what has happened in Mexico under NAFTA, argue that the competitiveness factory owners seek will come at workers’ expense. They “see NAFTA as a warning,” says Chris Slevin of Public Citizen’s Global Trade Watch, and fear that CAFTA will likewise “displace farmers, exploit workers, allow corporations to undermine laws and regulations, and end efforts to improve them.”
The Guatemalan government is already reaping CAFTA’s rewards. On March 24, Secretary of Defense Donald Rumsfeld announced that the U.S. would resume military aid to Guatemala, which had been halted in 1990 when it was learned that Guatemalan soldiers were involved in the death of a U.S. citizen.
Evidence of the greater power corporations will wield over the lives of people under CAFTA has also already surfaced. In early March, before ratifying CAFTA, the Guatemalan government passed trade rules that superseded those it had enacted in December, which had allowed more production of generic drugs. The Bush administration was concerned that the pharmaceutical industry would not support CAFTA, if the provision had remained in place.
CAFTA’s supporters in Washington hope to bring it before Congress for a vote by Memorial Day. However, with opposition coming from not only Congressional representatives concerned about environmental and labor protections, but those whose constituencies will be directly threatened by increased competition in sugar and textiles as well, currently it seems that there are not enough votes to ratify, says Burke Stansbury of the Committee in Solidarity With the People of El Salvador. “They won’t bring it to a vote until they think they can win. Our objective is to keep it from coming to a vote.”
In anticipation of a drawn-out battle, Bush asked Congress on March 30 for a two-year extension of his authority to negotiate trade agreements under the “fast-track” approval process. Under this protocol Congress is not allowed to amend a trade agreement; it must accept or reject it as-is. The current provision granting him this power expires on July 1.
Congressional hearings on the agreement are scheduled for April 6. Slevin says,” It’s our job to make sure members of Congress know what’s going on, and that the Bush administration’s line – that CAFTA is wanted by Central American countries – is not accurate. The key moment is when a bill is introduced that would implement CAFTA, that’s when the clock starts ticking.”