Last night (27 July), the US House of Representatives narrowly passed the Central American Free Trade Agreement which aims to reduce trade barriers between the US and six Central American countries.
The agreement was passed by only two votes with 217 in favour and 215 against. Several senior White House aides, including Vice President Dick Cheney and Secretary of State Condolezza Rice, were drafted in shortly before the vote to help shore-up support in the Republican-controlled House of Representatives.
The bill will now go to President Bush for his signature before becoming law.
There were hopes amongst activists in the US that the agreement would be defeated, and obvious disappointment that it was passed.
Free Trade under fire
However the closeness of the vote despite intense pressure from the Bush administration reveals a growing challenge to the view that “free trade” will bring about prosperity and an end to poverty.
The experience of more than ten years of the North American Free Trade Agreement signed between the US, Mexico and Canada has revealed the hollowness of promises that it would create prosperity with falling wages and labour conditions and increased environmental damage in Mexico and loss of jobs in the United States.
Lori Wallach of Public Citizen, one of the many groups campaigning against CAFTA in the USA commented:
"The CAFTA debate makes clear that a dramatic shift in U.S. trade politics has occurred and the NAFTA trade model is dead.
"That CAFTA … a trade deal of small economic significance, barely passed the House of Representatives shows that any economically significant attempts to expand the NAFTA model, such as the proposed Free Trade Agreement of the America, would be dead on arrival."
To be finally passed, the treaty still needs to be approved by Parliaments in Costa Rica, Nicaragua and the Dominican Republic. In all of these countries, there are strong campaigns from farmers groups, trade unions, women’s organizations and other community groups to CAFTA. They have vowed to continue the fight against the treaty.
Impact on Andean Free Trade Agreement
The CAFTA vote is also a disappointment to those fighting against the Tratado del Libre Comercio (TLC), the Andean Free Trade Agreement currently being negotiated between the US, Colombia, Peru and Ecuador. Bolivia is currently an observer to the talks. A defeat of CAFTA would have put this treaty in serious doubt.
However, the negotiations for TLC are not going well. There continues to be a stalemate in discussions especially around agriculture and intellectual property. Moreover, social movements in all of the Andean countries are increasingly mobilizing against the deal and have expressed their determination to stop a treaty that would exacerbate poverty and environmental degradation.
Elyzabeth Peredo, a representative of the Bolivian Movement Against TLC and ALCA said: “It is sad that a law which will affect the lives of many workers in Central America and the US was passed, despite the millions of voices who have spoken out warning of the dangers of a deal that will put business interests and profits before human rights, working conditions and the environment.”
“This agreement will not bring about peace, prosperity or democracy. It will instead deepen the profound inequalities, the vulnerability of the poor, the lack of transparency and participation that is a reality in the daily life of our countries.”
However she went onto say: “We reaffirm our commitment to give voice to the women, young people and men from factories, farms and cities who are determined to resist the Andean Free Trade treaty, ALCA and WTO agreements that threaten our sovereignty and democracy.”