CAFTA Failing The Poorest
Submitted by Pete on Sun, 2006/10/22 - 06:55.
AFTER SIX MONTHS, CAFTA FAILING THE POOREST, BENEFITING THE RICHEST
CAFTA has been in effect for six months in Nicaragua and El Salvador, and data show that the results are in line with what both supporters and opponents of the agreement expected; the strong players are benefiting, the weak are not (see NotiCen, 2004-11-18). In El Salvador, first of Central America's countries to implement the treaty, the many thousands of promised jobs have failed to materialize, and, said economist Raul Moreno, only big businesses, importers mainly, have seen gains. In Nicaragua, says William Rodriguez of the Centro de Estudios Internacionales, "CAFTA has sown the seeds for unfair trade. Nicaragua is a small country that can hardly compete with the US."
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From: AFTER SIX MONTHS, CAFTA FAILING THE POOREST, BENEFITING THE RICHEST.
Source: NotiCen: Central American & Caribbean Affairs, October 19, 2006.
Via: 
HighBeam™ Research
COPYRIGHT 2006 Latin American Data Base/Latin American Institute
It has been
Extremely beneficial to us and to thousands of small producers as well despite all the B.S being said about CAFTA.
We are small and poor compared to the big giants in the tobacco industry, despite that it has benefited us in a very positive way, so have the thousands of small agriculture folks,from rice tomatoes and repollo.
Once again you have to be in the exporter's shoes to yap about something you only read about, unless you are exporting goods to the U.S.A, the B.S yall are saying about CAFTA, has No Base. , I have said the same thing about the B.S talkers on the Nicaraguan war of the early 80's.
FAP
But, do the people benefit?
What I see in CAFTA is a lot of rules that restrict what can be sold to the US (in particular) with a lot of concessions on the part of the other countries. Mexico was the big victim of NAFTA and CAFTA seems to be the same.
While CAFTA may give your business a better chance at the US market than some bigger companies (your statement--I don't know), the real issue is how the average person in Nicaragua benefits. On the production side, I don't know. That is, I don't know if there is move net income ending up in the hands of Nicaraguan workers as a result.
On the expense side there are a lot of very nasty (for non-US) requirements. Increased drug costs I have already mentioned. Another is legislating companies such as Motorola to "compete" in the Central American market by giving their a non-competitive advantage over suppliers not based in the US.
Again, if CAFTA had anything to do with free (as in liberty) I could get more interested. But it really is a very detailed selective trade policy. For those who want to see what CAFTA really says, you can get the final text here. There is also a lot of analysis by Public Citizen.
CAFTA
This is from your article Pete:
"Nicaragua's Ministry of Development, Industry, and Commerce (Ministerio de Fomento Industria y Comercio, MIFIC) said that, since the treaty came into effect, exports to the US have increased by 38%. Increases in exports of coffee, raw sugar, beef, and gold, which account for 98% of exports to the US, saw the biggest gains. Some of these commodities have seen substantial increases in world prices, irrespective of the treaty. MIFIC reported that the country has also seen broader diversification of exports, adding 171 products to its list of products for export. Since CAFTA's onset, Nicaragua's sugar exports have risen, but only 37 of the country's 339 sugar companies have exported more than US$400,000, and they account for 90.8% of the total exports.
Where 10% of the companies reap 90% of the business, that is evidence that the sugar business is controlled by small groups and economic monopolies, says Rodriguez. By far the largest profit went to a single company, Nicaragua Sugar State Limited."
Nicaragua exports have risen and the fact that some of the companies are doing better than others would be true with or without CAFTA.
If Nicaragua had not joined they would be worse off and all that mortgage money would not be available either.
I see that the Dominican Republic is finally joining. That just leaves Costa Rica.
http://www.businessweek.com/ap/financialnews/D8KTAHK80.htm
Thanks
What would I have done if you hadn't re-printed this part. I obviously didn't read it.
"If Nicaragua had not joined they would be worse off and all that mortgage money would not be available either."
Mortgages have a ways of crippling small countries and are often used as tools of manipulation. It's not always in the best intrest of the recipient. The long term effect of multinational corporations only helps a country in the short term. The money is actualy flowing out of the hosts economy and into the hands of overseas stockholders and the small percentage of wealthy Nicaraguans.
Fyl and I agree on this
CAFTA is not about freedom.
Truly free trade would have benefitted the poor. CAFTA only puts up road blocks to trade.
CAFTA..another interational ..until we get caught scheme
Enough...time to stop being so naive...or intellectual...or all knowing. ok ..lookat how much benefit the Mexica border towns received from the wonderful agreements...and now..what is happening....border patrols by private militia on US side. Ok.....The competition...internationaly to provide the cheapest labor is on the rise. Nicaragua is is so poor...it is wide open to exploitation. Hundreds of desperate people wanting (NEEDING) to work...and hundreds more waiting...so you can exploit workers...They get hurt...so what...throw em out. They protest conditions......no problem...hundreds waiting for a few dollars..... For what ? to provide the country of my birth with inexpensive clothing...that is throwed out.... away out of style a few months after bought ? Yeah.....sick. The waste because of corporate greed is sickening.....and....my answer..I did not buy into it with my three teenage girls...THEY HATED ME !!!! Did stories of children burning to death in locked factories stop consumption ? NO......th4 news went unnoticed...not headline...and died along with those who lost their lives becaue of horrid inhumane conditions. Now...to make a profit...is no big deal in Nicaragua...but these corporations want it all...more than they need. Why Nicaragua cannot say....OK...come here..trade...BUT...you must do this and this and this...I have no clue Bigger than I can manage to think. You make a factory....hire my people...but you will not help their health.... prevet ijury and abuse them.us them...etc. You would think the international debt forgiveness would include something of this sort !!!The USA has OSHA and workers protection...but the USA ALL0WS THIS SORT OF ABUSE ? aND DOESN'T GIVE "CREDITS" FOR PROTECTING WORKERS ? OK...enough of my "little" protest. As a health care professional...I get hot about abuse..injuries..lack of health care..etc. When someone is fired because the have been injured...because of company neglect...in Nicaragua...they will get away with that. If the rest of the world said..NO...I will not buy the porduct...i wouold stop. That is the only way to fight abuse. Willow
Your Information
"lookat how much benefit the Mexica border towns received from the wonderful agreements"
Where do you get your information? Lets take Juarez mexico for example. One could argue drugs and not NAFTA has caused the all out war in these border towns. You cant show me though where these towns benifited from NAFTA to make a claim like this.
fairly free
should it not be about fair trade instead of "free" trade. jalaluyah
Life is not fair
But in my mind, free is fair.
i agree with john......
and will add that capitalists tend to move toward monopolies. and therefore, we need antitrust laws to protect us from them. am not an economist. therefor, cannot comment on cafta.
If anyone doubts this axiom
Just look at the internet.
Absense of government interference has given us freedom and a degree of fairness. We have to put up with spam, spyware, worms, viruses, pictures of frogs on towels, pictures of bombs on forklifts, and such, but that same freedom has produced its own checks and balances.
The upside is anyone in the world with an internet connection can tune in and learn what it's like to live in Nicaragua.
And...
take a shower in Nicaragua.
I Agree
with you John. especially grateful for this N.L. Site. I have had a tremendous window on Nicaragua that is unique, and I am full of anticipation for my first visit in November. I have to tone down my expectations though, you never know until you experience a place first hand.
I disagree John
One will and can get Some Riliable info at thesame token you can find a bunch of erroneous B.S,from people that have never lived there and have no clue, in short, Nothing comes even close to actually living there and seeing things first hand.
That's why a few of us always advise to come visit and spend time before you take the plunge.
FAP
Don't worry, Felix
It's easy enough for a total stranger to figure out what's accurate and what's someone's BS fantasy.
I'm glad CAFTA has benefitted you. It's new, and we've only had theory to go on, so your positive experience with it is a valuable lesson.
true John
I know 4 small growers in Sebaco and 2 in Asturias whom with help from Pymes in understanding the CAFTA procedures in Exportation has benefited tremendously,thou it is true the bigger exporters benefits more, WE all Exporters benefits from CAFTA.
FAP
Poor People
CAFTA is not about freedom and that is true enough. But there is no reason to assume or thinks that truly free trade would benefit the poors people. Poor people have only one thing to really trade and that is their labor and there is no reason to think free trade or any ther kind of trades would necessarily or automatically be beneficial to poors people - especially on a global market, with many import and export regulations (fiar or otherswise).
The down-side
This is very true. Unfortunately, there is another down-side for the poor. CAFTA contains regulations that will likely increase the cost of prescription medicines. Before CAFTA was passed this was a common subject being covered on TV in Costa Rica.
The big problem I have with CAFTA is the marketing of the word free. CAFTA creates a lot more regulations limiting trade than it eliminates. Unfortunately, most people don't realize this.
The down side upside view
Very true, Phil... but if only one could expect the big guy (?>) to play by those rules. Anyone who has followed the Softwood Lumber dispute between Canada/USA knows the appalling truth: USA lost (thus far.. some still litigating) five consecutive cases of dispute resolution by a multi-partite panel.. and ignored each and every ruling.. illegally collecting over $5 BILLION in 'duties' , only recently returning about 80% of this (why not 100?) as part of a 'renewed' agreement (sort of) allowing once again the importation of softwood lumber desperately needed in the rebuilding of the Gulf Coast area.
If Unca can bully their largest (by about 8 times) trading partner with a commodity he desperately needs (in order to allow domestic producers to price gouge).. what can a third world country with very little bargaining power expect?? Besides higher drug prices, that is. As a sometime resident of Costa Rica.. and one who has spent most of my life in USA and abroad.. I am concerned about the REAL effects of TLC and about how well/not well prepared the target economies are for the many changes all the new rules, (which Phil so rightly refers to) will visit upon these fragile little markets.
When you stop to realize that the entire trade value represented by the CAFTA is a bit smaller than the state of Connecticut, it becomes pretty obvious that the real motive of 'free trade' has little to do with 'free' and nothing to do with 'trade'..
again, its gonna be the littlest,weakest among us who suffer most.. just mi dos cordobas Jay W>>
Downside-upside
There are a lot of positives to free-trade and fair trade if everyone sticks by the rules, the major downside, as in the E.U. is the Huge Administration and bureaucracy that feeds itself, this really affects the little guy or small business, imagine if for years and years you have grown and produced excellent coffee(Ad Inf) and now you have to comply, not to mention, complete tons of Paperwork to satisfy some bureacrat many miles away, just to get your product to market. obviously Larger Corporations are set up for this AND in some cases create the regulations. sometimes with persistant Lobbying.
The real problem...
Is though the programs from the right are often beset with small flaws, the left has no original or optional alternatives...they only criticize...they never solve.
ALl the original and effective creativity of cinvilization and democracy on the planet comes form the Christian Judeo right minded side...connected to universal law and mind. All others just copoy and criticize the original CREATIONS...and call it EVOLUTIONARY! haaa
CAFTA
The behavior of the US with regard to trade agreements has been fairly consistent (see Canadian Softwood above). Though they are given friendly-sounding names, such agreements are typically designed so that the US may exploit its trading partners. If CAFTA truly created WIN-WIN scenario, Costa Rica would sign it in a second. Costa Rica happens to have a politically astute voting public (and perhaps a more truthful media than the US) who would hold their representatives accountable at the voting booth for signing a lop-sided agreement. CR and Nicaragua have made numerous deals with the devil in the past and suffer for them now. Two examples are: Colon devaluation against a devaluating US dollar. United Fruit Company Hijinx.
Truthful?? CR media; CAFTA
I have to get out of here or I would add my (the correct interpretation) opinion on the subject. Why am I still sitting here? Its my birthday today. Maybe I'll supply the answers tomorrow if I don't end up with a DOI before I get home tonight.
Happy Birthday Jack
After all this brujaja on the subject, it occured to me; who ever said CAFTA was supposed to help "The Poorest"?
Happy Belated B-day JD
and many more!
me too.
happy b-day!