CAFTA Negotiations Come to a Close, Despite Absence of Costa Rica

Costa Rican delegates walked out of the talks on Tuesday afternoon after refusing to go along with US demands to open its country’s telecommunications and insurance industries to foreign investment. The move was a setback for US Trade Representative Robert Zoellick, who took control of CAFTA negotiations during the ninth and final round. For now at least, the region’s largest and most developed economy is out of the deal.

Costa Rica’s move nearly snowballed into a bigger defeat for the US when intense, late-night talks remained stalled early Wednesday morning. But just when it appeared that talks would not conclude as scheduled due to disputes over sugar tariffs and textiles, Zoellick called for one last meeting to pressure Central American leaders into agreeing to a deal. Its unknown what was discussed, but when the parties emerged, Zoellick was able to claim victory: the defiance of Costa Rica was not in fact contagious, as the other governments apparently caved in to a US ultimatum. Clearly Zoellick used the US’s significant economic leverage to bully El Salvador, Nicaragua, Honduras, and Guatemala into dropping demands that could have benefited their own agriculture and textile sectors. In an ominous signal earlier in the week, the US announced that it would delay debt relief that had been promised to Nicaragua; the implication may have been that such relief would never come if that country’s negotiators refused to go along with Zoellick’s terms. Similar tactics were likely used to break down the resolve of the other three countries.

Still, the governments themselves deserve some of the blame for going ahead with CAFTA despite continued popular resistance to "free" trade in the region. Though some Central American representatives conferred with protesters outside the talks, and thanked them for their presence, in the end they signed off on an agreement that would prove devastating for the poor majority in their countries. The exclusion of unions, farmer associations, and other popular sectors from the negotiating process has been evident since talks began in January of 2003; yet in the end, even large business associations like the Central America Counsel on Textiles was angry with what one leader called betrayal and "subservience to foreign interests." Of course, much of this was related to the US strategy of "divide and conquer", which effectively broke down any regional consensus and solidarity between the five countries. In the days leading up to the final agreement, Zoellick met in private with each country individually, demanding concessions based on bilateral relations. Therefore, the text will be highly unfavorable for the Central American countries, a result that could lead to legislative rejection in some of the region’s parliaments.

Bilateral negotiations between Costa Rica and the US will continue in January, and could complicate the final agreement reached yesterday. The US also hopes to bring the Dominican Republic into the deal following expedited bilateral talks early next year, meaning that the formal CAFTA text would be presented to Congress sometime in March or early April. A vote in the US Congress would likely arrive in July, after the 90-day period mandated by Trade Promotion Authority. By all accounts, it will be a very close vote: labor unions led by the AFL-CIO have pledged to fight CAFTA in Congress, while influential textile and sugar industry lobbies will wage a protectionist battle against the free trade agreement. Many Representatives in Congress have already announced their opposition, including candidate for the Democratic presidential nomination Dick Gephardt – who said that CAFTA would accelerate the "race to the bottom" – and Congressman Sander Levin, who predicted that CAFTA would lose in the House next year.

The constant protests outside of the final round of negotiations in Washington DC were a sign of the growing public opposition to the deal, and together with local actions in cities like Los Angeles, Houston, Boston and Portland, helped raise awareness about the potential consequences of CAFTA for people in Central America and the US. After building a strong campaign against the agreement for more than a year, the anti-CAFTA movement must focus its attention on Congress, as the decision will come down to a handful of swing votes in the House of Representatives. Our job will be to impliment grassroots lobbying and pressure campaigns that will ultimately induce those key representatives to vote NO on CAFTA. Meanwhile, support for social movements fighting CAFTA in Central America will also be paramount, with the possibility of the pact being rejected in one or more of the region’s parliaments. The polemical presidential elections in El Salvador will make the issue especially strategic for parties in the legislative assembly, and a victory by the FMLN would hurt CAFTA's chances both in El Salvador and the US. CISPES and other grassroots solidarity organizations will be mapping out a six-month plan of action in early January that promises to bring opposition and anti-CAFTA mobilization to a frenzied pitch by June of 2004. The battle against CAFTA is ours to win!
http://www.cispes.org/english/Updates_and_Analysis/caftafinal.html