Leave Central America Alone

Multinational Monitor, April 2004 | Go to article overview

Leave Central America Alone


Poor Central America. Finally emerging from the U.S.-backed wars of the 1980s, Central Americans had reason to hope for a brightening future.

With the winding down of military violence that killed tens of thousands in Guatemala, El Salvador and Nicaragua, there seemed an opportunity for the region to rebuild and flourish.

But it was not to be.

Governed by right-wing administrations that in any case have been constrained in economic policymaking by the demands of the International Monetary Fund and World Bank, the region's economies (with the exception of Central America) have failed.

Now comes the United States offering the lure of a free trade agreement.

Central American governmental leaders and economic elites are embracing the U.S.-Central America Free Trade Agreement (CAFTA), but the agreement promises in virtually every respect to deepen rather than repair the region's problems.

CAFTA, essentially an effort to extend the North American Free Trade Agreement (NAFTA) to the tiny, impoverished nations of Central America, is little more than an initiative for de facto recolonization of the region.

As Tom Ricker reports in this issue, the agreement promises to devastate the small farmers of the region, who will be forced into a hopeless competition with the U.S. agribusiness giants. The outcome of such a competition is not only preordained, it has been precisely modeled in Mexico, where NAFTA has forced more than a million Mexican farmers off the land. The Central American countries remain heavily rural--with about a third of the workforce engaged in farming--so massively disrupting their agricultural sectors will send tremors throughout the region, as tens of thousands of farmers lose their means of support and migrate to capital cities, Costa Rica or the United States.

As "Dying for Drugs" in this issue explains, CAFTA's patent and intellectual property provisions will exacerbate existing health problems in the region. The agreement will enhance the power of Big Pharma, delay the introduction of generic competition for pharmaceuticals, and bleed patients --or deny them access to medicines altogether.

As Ricardo Navarro highlights in this issue's interview, CAFTA also contains an investment chapter that gives foreign companies the right to sue governments directly for many environmental, health, consumer, labor and development regulations that interfere with their profitability. Because an analogous provision in NAFTA is generating increasing controversy--as corporations use the chapter to overturn or deter environmental rules, health regulations and even judicial decisions--U.S. trade negotiators included language in CAFTA to modify the investor rights created by NAFTA. But they left the core provisions untouched--and so the fundamental problems remain.

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