CAFTA: Another Free Trade Disaster


Last week the House of Representatives, following the action of the Senate, and using a variety of arm-twisting and brow-beating tactics, passed yet another free trade package that promises to be a boom to the U.S. economy. CAFTA, or Central American Free Trade Agreement, would open the American market to six Latin American nations – Costa Rica, Honduras, Guatemala, El Salvador, Nicaragua, and the Dominican Republic. In essence this is an extension of NAFTA, which has been far more damaging to our economy than advertised and this new deal will be no different.

President Bush has been behind this effort for years. At first he wanted a Free Trade Area of the Americas (FTAA), a NAFTA-style pact that would stretch from the Arctic to Argentina, but that did not have much of a chance of passage so he convinced enough numbskulls in Congress to go along with this scaled-down version. It seems as if the free trade fools are going to attempt to put it in piecemeal. And now they have another piece of their destructive puzzle in place. With three million manufacturing jobs lost under the Bush administration, you would think they might have learned something by now.

But like his father, Bush is convinced that free trade is the path to American prosperity. He has not learned, or has not wanted to learn, that NAFTA, which his father pushed but Clinton enacted, did not achieve it and will never achieve it. Regardless of what one thinks about Ross Perot, and his giant sucking sound analogy, he was exactly right about free trade with Mexico, where we saw a trade surplus disappear almost overnight and millions of jobs shipped south of the border. This trend has continued under GATT and will only get worse under CAFTA. Free trade might look wonderful on paper but can never work in the real world and the realities of political economics, where the nation, and not just the consumer, is taken into consideration.

Yet we get the same drivel from the administration every single time a deal like this is put forward. As Bush declared in a statement on CAFTA’s passage, “CAFTA helps ensure that free trade is fair trade.” How can it Mr. President, when our workers here in this country are put in direct competition with workers making a fraction of American wages; where there are no environmental and safety standards and regulations; and where American production can so easily be undercut. The agreement, continued Bush, “will level the playing field and help American workers, farmers and small businesses.” Yeah, just like NAFTA! The only help this agreement will give is to the many large corporations, a major portion of GOP campaign cash I might add, who are standing by ready to uproot more factories and move them to Latin America. This, coupled with millions of immigrants, both legal and illegal, pouring into the country to take more American jobs, its no wonder our wages are stagnant and have seen no real rise in decades. American workers lose again!

But the administration assures us that the markets of these six nations will be wide open for consumption of American goods duty free, products such as agriculture crops and even manufactures like tractors from Illinois, we are told. Yet the standard of living in these nations is very low. How many tractors, or Dell computers, or Ford automobiles, for that matter, can the folks in the Dominican Republic really buy? Not many! Most of them don’t have two dollars to rub together at any one time. Pitiful situations to be sure, but not our mission to resolve, as some have argued.

But to make matters worse, as well as more irritating to a nationalist, many so-called conservatives, in and out of Congress and the White House, have been pushing for this agreement for months and using arguments that border on economic treason. Take for example Charles Krauthammer. His column on June 24 of this year argued that the United States needed to enter into a free trade pact with Latin America, not to help us but because of the low living standards and the “widespread poverty” in the Central American region! “If we have learned anything from the last 25 years,” he writes, “it is that open markets and free trade are the keys to pulling millions, indeed hundreds of millions of people, out of poverty. The Central American Free Trade Agreement (CAFTA) is a chance to do the same for desperately poor near-neighbors.” Mr. Krauthammer, what about our people? It is not the responsibility of the United States of America to pull the world out of poverty. Many nations around the world are in that situation because of their own stupidity and we should not throw open our markets to cheap imports that will cost us important jobs!

So you see the hypocrisy of free traders: on the one hand they argue that these foreign markets will be open to American goods but then on the other hand try to argue that free trade deals will help these impoverished regions. How can they buy our goods if they are so poor?

 But Mr. Krauthammer is not done. No, he continues his argument, not by citing great American leaders of years past, but a foreign one! Krauthammer cites British economist David Ricardo in attempting to prove that trade between two nations “based on relative efficiency of production is always beneficial to both countries.” But Mr. Krauthammer does not bother to tell us how it will benefit the U.S. economy, just like no one could tell us how NAFTA would be a benefit, except by useless generalizations.
Our Founding Fathers well understood the importance of economic nationalism and self-sufficiency. Beginning with Washington and our great economic architect Hamilton, and later with Jefferson, Clay, Lincoln, and TR, our nation placed its own economic interests first and would have never signed onto an agreement like CAFTA that would hurt the American economy and its workers to the benefit of the Third World. America maintained a policy of economic nationalism for well over 150 years and built the greatest economic machine the world has ever known; a financial and industrial giant that single-handedly fought a two-front war in the 1940’s to bring down Fascism and later Communism. It was not free trade that paid for these victories but that now-dirty word – protectionism. Mr. Krauthammer stands with the British and David Ricardo. I’ll stand with America and Alexander Hamilton.

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