| Submit your comments on this article |
| Caribbean-Latin America |
| Trade, not Aid: Why it's Crucial to Approve CAFTA This Week |
| 2005-07-25 |
| This is a big issue. If you don't like what's happening with Chavez in Venezuela, Lula in Brazil, pending revolution in other Latin American countries, get on on the horn to your congress critters and get this thing passed. It's crunch time - up or down this week. If President Bush fails to pass the U.S. free trade deal with five Central American countries and the Dominican Republic, he might as well cancel his upcoming trip to Latin America and say ''adios'' to the region. Judging from what I heard from several Latin American officials last week, a ''no'' vote by the U.S. Congress on the Central American and Dominican Republic Free Trade Agreement (CAFTA-DR) -- predicted by some congressional head counters -- would be the U.S. equivalent to the recent French and Dutch ''no'' vote against the proposed European Union Constitution. It would amount to a virtual death sentence to the already troubled U.S. effort to create a 34-country, hemisphere-wide Free Trade Area of the Americas, as well as to U.S. sub-regional trade negotiations with the Andean nations bloc -- Colombia, Peru, Ecuador and Bolivia -- as well as with Panama, they say. If the U.S. Congress doesn't approve an agreement with a group of friendly Central American neighbors that together amount to only 1.9 percent of U.S. worldwide trade, the argument goes, it would be unrealistic to hope that it would sign much larger trade deals with the Andean bloc, or with Latin America as a whole. Last month, the Senate passed CAFTA-DR by a narrow margin. But Democratic Party legislators in the House -- pressed by protectionist labor unions and big sugar -- are nearly unanimously against it, which could kill the treaty. For U.S. foreign policy in Latin America, that would be a disaster, among other things because free trade has long been -- both under Democratic and Republican administrations -- the cornerstone of U.S. cooperation plans with the region. `TRADE, NOT AID' For at least two decades, Washington's message to Latin America has been, ``Trade, not aid.'' A major blow to the U.S. free trade campaign would effectively kill the only carrot in the U.S. foreign policy agenda toward the region. Without free trade, all the United States would have left to offer to the region would be ''negative agenda'' issues such as U.S. demands to curb illegal immigration, drug trafficking and security threats. ''It would send a terrible signal to Latin America,'' Peru's Foreign Trade Minister Alfredo Ferrero told me in an interview. ``The United States already has an image problem in Latin America: It's not seen as a partner. If they can't pass CAFTA, it would make things much worse.'' Andean countries are especially worried. Their current trade preferences under an anti-drug deal with the United States expire at the end of next year, and failure to renew it or sign a free trade deal could cripple their exports. ''We face the collapse of 25 percent of our total exports,'' Ecuador's Foreign Trade Minister Oswaldo Molestina told me. It's not that Latin American countries lack a Plan B. Venezuela's self-proclaimed revolutionary President Hugo Chávez is more active than ever promoting his ''anti-imperialist'' Bolivarian Alternative for the Americas (ALBA). With huge oil profits in hand, and Brazil's regional leadership dampened by its ruling party's corruption scandals, Chávez is drawing the biggest headlines ever in Latin America. POVERTY, OIL UP In recent weeks, despite the fact that Venezuela's National Statistics Institute reported an 11 percent rise in the country's poverty during Chavez's first four years in office, Chávez has signed deals to create three regional oil companies -- Petrosur, Petrocaribe and Petroandina -- through which Venezuela will subsidize oil production and exports. In addition, Chávez has recently vowed to purchase $500 million of Ecuador's foreign debt. He made similar promises to Argentina, Brazil and Bolivia. Many of these deals come with strings attached. Venezuela's June 29 energy cooperation agreement with 12 Caribbean Community countries stipulates that its ''fundamental objective'' is to promote economic development ``based entirely on the principles for integration referred to as the Bolivarian Alternative for the Americas (ALBA).'' NO CAFTA, NO VISIT My conclusion: If CAFTA-DR doesn't pass, Bush would be well advised to reconsider his Nov. 4 trip to Argentina for the 34-country Summit of the Americas. He would not only be stepping into hostile territory -- the mayor of the host city, Mar del Plata, has already been quoted as declaring him ''the world's most disagreeable person'' -- but would arrive with nothing but ''negative agenda'' issues for the region. He may do better canceling the trip, and saying bye-bye to Latin America. |
| Posted by:too true |
| #9 There are far more good reasons to have CAFTA than not. The eventual creation of a hemispheric trading bloc, associated with a really boring-sounding term, "managerial efficiency", would be the economic equivalent of what Bush is doing politically in the Middle East. Take Brazil, for example, which has proven itself capable of generating vast amounts of capital; transcended only by their ability to squander that capital. If their economies' management was blended with that of the US, such disasters wouldn't happen--too many American businessmen with interests in Brazil would intervene to keep it from happening--and the Brazilians would profit immeasureably by it. I mean intervene in the broadest of terms--across the spectrum of their nation there would be a foreign pool of good management always pressing for better standards. "Don't build a new capital (Brazilia) in the middle of a desert on top of a mesa. That is stupid." Sage advise from people dedicated to making money, not pissing it away. |
| Posted by: Anonymoose 2005-07-25 14:25 |
| #8 LOL |
| Posted by: Frank G 2005-07-25 12:55 |
| #7 saying F*uck You to the UN won't work Maybe not, but some things are worth the economic cost. By the way, the asterisk is superfluous. |
| Posted by: Matt 2005-07-25 12:50 |
| #6 If it'll do something about the US sugar rip-off Im for it. |
| Posted by: Shipman 2005-07-25 12:46 |
| #5 Without strong intellectual property protections, Latin American countries will not get permission to produce, say, generic versions of patented drugs. Yes, there are UN-sponsored agreements under WIPO, but they are rigid and in some cases work against the recipient countries. Regional agreements are more likely to be win-win for all sides. We should care, for several reasons. WIPO/GATT allows countries to demand that a drug be sold at an acceptable price ... if not, they can bypass the patents. Or do that on any other patented or copyrighted product. In other words, if we don't engage in regional agreements we WILL find ourselves hemmed in by UN-sponsored ones. And saying F*uck You to the UN won't work - companies need markets. Now from the CAFTA side, what the Latin countries get is access to markets for their products, yes, but also a legal framework within which it becomes much more attractive for multinational corporations to do business there, set up regional firms, do tech transfer etc. Win-win. |
| Posted by: rkb 2005-07-25 12:41 |
| #4 I would rather see this than extending most favored nation status to a country like say China. Over all I really don't think this will have that much impact on the US economy. But I think if this lowers barriers between the Central and South American countries themselves and increase trade in the region itself it can only help matters. Personally I think most of the regions econmic problems are more related the the cultural baggage they aqquired from the era of Spains dominance than anything that the US did. And the US did do somethings that IMO were wrong. Using the Marines as a police force to help the United Fruit Company wasn't a high point in US foreign policy. Just my $.02 |
| Posted by: Cheaderhead 2005-07-25 12:37 |
| #3 The more you learn about CAFTA the less you might think central america would want it. It is kind of stacked in our favor. They stand to gain very little as is the traditional slant on central american trade policies. We are basically throwing them a bone. They will consume very little of our expensive goods, and they don't really know what to do with our foodstuffs. It may lower prices a little on agricultural products for american consumers. As with most trade policies 700-800 people will make all the money and the rest of us will see little change. So unless your a democrat and don't want to see anyone make a buck, who cares? |
| Posted by: Bigjim-ky 2005-07-25 11:55 |
| #2 While I am tempted to say, "Fuck you and so long, assholes" to Central and South America, the risk of them falling into revolution and providing the same environment as Afganistan is just too great, IMHO. Now some CIA sponsered coups, assasinations and some democratic reform might be just what the doctor ordered for that area of the world. |
| Posted by: mmurray821 2005-07-25 10:24 |
| #1 At the risk of stating the blindlingly obvious. The upside of saying bye-bye to Latin America for the USA would appear to be far more than the downside. Take care what you wish for. |
| Posted by: phil_b 2005-07-25 09:10 |