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The Centrist Case for CAFTAEd Lorenzen
Strengthening U.S. Foreign Policy Interests Improving Labor Standards and Economic Conditions An Opportunity for Centrist Democrats
The debate on CAFTA has in many ways become a proxy for the broader concerns about the global trade environment. The truth about trade is that there always are successes and failures, winners and losers. There are legitimate concerns about flaws in the text or enforcement of previous trade agreements. But as Charlie Stenholm noted in a recent article, the best - and perhaps only -- way to address the shortcomings in international trade is through negotiations that level the playing field. Ratification of the CAFTA-DR will strengthen the U.S. agenda in all other trade negotiations, especially the World Trade Organization Doha round. The best way for us to maximize our success in negotiations is to go into the negotiations with a unified voice and a partnership between Congress and the executive branch. Why would our trade partners make politically difficult concessions to the Bush administration if the administration is unable to get trade agreements through Congress? Defeat of CAFTA would send a worrisome signal that the United States has abandoned the goal of expanded trade and is not committed to the world trade agenda. Rejecting an agreement that will offer tremendous economic benefits for Central American nations would also further damage the United States’ standing in the third world on trade issues. Achieving many of the key objectives for the United States in the Doha round, particularly in the agricultural arena, will require cooperation with developing countries in Latin America and elsewhere. Approval of CAFTA would represent a positive step toward establishing constructive relationships with developing countries going into the Doha round. By contrast, rejection of CAFTA would strengthen the position of those in developing nations who are taking a more confrontational posture toward the United States.
Expanding trade with developing nations is the most powerful development tool we have. CAFTA offers the best chance of improving living standards, creating jobs and spreading the democratizing effects of trade in Central America. Expanded trade is a powerful tool for America to export our values, practices and democracy along with our products. Although they still face severe economic challenges, the CAFTA-DR countries have made enormous social, economic and political progress in the last two decades. To remain stable, they must offer their people jobs and opportunities. It is very much in the interests of the United States to be part of the solution. CAFTA could do much to consolidate Central America’s hard won start at democracy and political stability. Former President Jimmy Carter wrote in a recent letter supporting CAFTA, “Our own national security and hemispheric influences will be enhanced with improved stability, democracy and development in our poor, fragile neighbors in central America and the Caribbean….If the U.S. Congress were to turn its back on CAFTA, it would undercut these fragile democracies, compel them to retreat to protectionism, and make it harder for them to cooperate with the United State.” Implementation of CAFTA will reinforce democratic processes and rule of law in Central America, because its implementation depends on greater transparency and accountability in governance. In fact, the CAFTA talks have led each of the democratically elected governments of Central America to enhance its labor laws. We need to approve CAFTA to send a signal that the United States is committed to these domestic reforms that improve the lives of Central Americans and to providing economic opportunities that are important to preserve stability in the region. CAFTA is not a panacea for the social and economic problems in Central America. A great deal of work remains beyond expanding trade and investment must be done to improve social conditions in Central America. However, passage of the trade agreement, though not the entire answer, will improve those conditions beyond where they would be in the absence of the agreement.. In releasing a study on the potential impact of CAFTA, World Band President James D. Wolfensohn stated that the agreement “offers opportunities for increasing trade and investment that will boost long-term growth and reduce poverty in Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua."
The primary substantive objection to CAFTA relates to labor standards and economic conditions in CAFTA-DR countries. The concerns about the labor protections in the agreement are less about the actual text of the agreement – which contains labor protections as strong or stronger than previous trade agreements – and more about doubts about how aggressively the administration will enforce these provisions. As Ambassador Portman has acknowledged, labor laws in the Central American countries and the Dominican Republic (CAFTA-DR countries) are generally good but are not adequately enforced. Respect for human and workers' rights has improved dramatically, but there is still considerable room for improvement, and gross income inequality remains. The judicial and regulatory systems need to be modernized and reformed to increase transparency. Several Centrist Democrats have made constructive improvements to address the concerns that have been raised about the agreement. Specifically, centrist Democrats have worked to add language to CAFTA implementing legislation providing greater monitoring of the efforts of CAFTA countries to improve labor standards and obtain commitments for additional funding for capacity building. During the Ways and Means “Mock Up” Congressman William Jefferson negotiated an agreement adding language to the CAFTA implementing legislation which requires the President to report to Congress on the progress of DR-CAFTA countries with regard to improving labor conditions and meet the commitments in the White Paper. The language negotiated by Congressman Jefferson would identify steps that the United States can take to improve labor conditions. Senator Jeff Bingaman built upon these provisions by securing a commitment from the administration for enhanced funding for capacity building. The administration agreed to set aside $40 million in each of the next four years for labor and environmental capacity building assistance designed to strengthen processes and institutions to monitor and enforce commitments to core labor standards, such as child labor, the right to organize, and the right to bargain collectively. The administration also agreed to Senator Bingaman’s proposal to set aside $3 million a year would be set aside annually for the International Labor Organization to monitor and report every six months on progress and problems with worker rights. Senator Bingaman also secured a commitment of $30 million per year for four years for rural development in CAFTA countries. In short, centrist Democrats successfully worked to put teeth in the promises about improved labor and environmental conditions in Central America by establishing a mechanism to monitor progress toward meeting those promises and securing the funding that will be necessary to turn those promises into reality.
Links: CentristPolicyNetwork.Org CAFTA – A Solid Day’s Work Advancing America’s Economic and Security Interests (July 26, 2005) Former President Jimmy Carter’s letter supporting CAFTA (June 8, 2005) The World Bank Group (co-authored by World Bank economists Carlos Felipe Jaramillo and Daniel Lederman) DR-CAFTA: Challenges and Opportunities for Central America White Paper Summary of Report: The Labor Dimension in Central America and the Dominican Republic – Building on Progress: Strengthening Compliance and Enhancing Capacity (April 5, 2005) |
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