USTR - How important is CAFTA, really?
Office of the United States Trade Representative

 

How important is CAFTA, really?
By: Gregory Walters, Director of Small Business Affairs, Office of the U.S. Trade Representative 05/04/2005


If you were to look at a newspaper twenty years ago and read the headlines describing Central America, you would have read about communist insurrections, civil wars, and instability.  Popular perception would have one believe the regions largest growth industries probably consisted of arms dealing and mercenary services.

Things have change.  When we talk about Central America, today, we are talking about nascent democracies.  Through hard work and struggle the governments of Central America strive to provide the stability and market economies that promote prosperity for their citizens.  Credit needs to be given for the incredible amount of progress the region has made in roughly twenty years.  These are countries that are working to trade goods over there borders, not guns.  They want to replace the chaos of the pass with the commerce of the future. 

To foster the roots of democracy and free markets, the U.S. congress passed unilateral trade preference acts like the Caribbean Basin Initiative and its successors throughout the late 1980s and 1990s.  These one way preference agreements gave duty free access to Central American goods, services, and agricultural products.  By opening the U.S. market to these goods, Central American’s began to see benefits and began developing free market economies.  To further their development, they approached their neighbor, the United States, and asked for a free trade agreement.  An FTA would cement the benefits of the unilateral preferences and push needed reforms to further growth and stability.  Knowing the political difficulties they would have to face internally to incorporate the high environmental, labor, and intellectual property rights standards the U.S. would demand, the six democratically elected leaders of the CAFTA countries agreed to and completed negotiations of a state of the art free trade agreement.  They saw, and see, this agreement as a way to make fundamental reforms in their countries.  They want to insure workers rights, improve conditions for their citizens, and continue the path of democracy.

I admit that it is highly unusual to talk about the “Foreign Policy” ramifications of a free trade agreement in this column, but in the case of CAFTA, it is essential.  Many arguments against CAFTA are masks for not wanting trade with poor countries.  These countries may be relatively poor today, but then again the U.S. was relatively poor when compared to most Western European countries in the 18th century.  If the U.S. doesn’t pursue opening up developing markets, American businesses suffer.  The competition for clients in the developing world is intense.  It is the government’s responsibility to help to provide the best atmosphere for U.S. businesses to compete and win.  CAFTA does just that.

It is important that the United States not turn its back on its neighbors.  The CAFTA countries stand with us in the fight on terrorism. They are working to build vibrant economies so their populations have jobs at home and do not wish to illegally immigrate to the north to find work.  It is in our best interest to support these democracies and pass CAFTA.

More information on CAFTA, U.S. small business trade policy and other items on the trade agenda can be found at www.ustr.gov.

 
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