The Spitfire's Grill
Regular Rants from a Pragmatic Liberal
Friday, May 27, 2005
 
Topic of the Day: CAFTA
Just started work this week, so this is a TGIF-inspired short post. Although, I feel, I'm giving an important topic a healthy dose of injustice.

Today's Topic of the Day was inspired by this Financial Times article, which is short but worth reading nonetheless.

CAFTA

The Central American Free Trade Agreement is half-travesty, half-wonder. My primary thought on it is that if the White House was really concerned about free trade, they would have done a better job with CAFTA, instead they sold out to business interests and just went with an all-out CAFTA, quite nasty really.

US business organisations and the administration have launched a final drive to win approval for the Central American Free Trade Agreement (Cafta) as Congress moves towards a vote on the pact.

Thomas Donohue, president of the US Chamber of Commerce, warned that those members who stood in the way of a deal could jeopardise their financialsupport from business.

When did it become the business lobby's job to enforce free trade? CAFTA has its many merits, of which include:

1. Free Trade - I can't convince you anti-free trade people to come to the dark side in just one blog post, especially when I'm as worn out as I am right now, so I won't try. Free trade is a hallmark of the American Way, without it our quality of life would pale in comparison to how we live today.

2. Helping these countries - these Latin American nations are disgustingly poor. CAFTA will create a significant number of jobs in those countries, jobs that normal Americans for the most part won't take anyway.

3. Foreign Policy - certainly when these extremely poor Latin American countries are helped out of their slumps on the US's shoulders, it will do much to foster a positive reputation in a region that has anything but positive things to say about the United States.

But what is wrong with CAFTA as it stands? As I said, its a sell-out to the business lobby. If free trade is introduced too quickly, you get a two-class system like what exists now in China. I haven't seen any, but I'd love to see charts of the income distribution in China compared with the US and Europe. I believe they would be greatly distorted. Only now are Chinese citizens, normal citizens, building up the political power to perhaps one day change things.

A slower, smarter phase in plan that would allow the quality of life of all the citizens in these countries to grow is the right way. Otherwise, you'll have millionaire factory owners and still-dirt-poor factory workers who, instead of working in the fields, work for not much more pay in unsafe working conditions. Not the way to go.

Free Trade is good for the US and for Central America. But there's a better way to do CAFTA, and this ain't it.


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