Working Poor & Life Chances
Critics Worry that CAFTA will Follow the Footsteps of NAFTA
By Jessica Robertson
Nov 4, 2005, 14:33

Congress's approval of the seven-nation Central Free Trade Agreement has Houston-area Latinos debating its potential to improve immigrant working conditions and recalling the inadequacies of the North American Free Trade Agreement.

Opponents of CAFTA contend that another free trade agreement from more than a decade ago failed to stimulate the U.S. job market and deliver on its promises to Mexico.

"Mexico is such an economic mess," Director of the Center for Mexican American Studies at University of Houston Tatcho Mindiola said."I really think it's an indictment of Mexico and its relationship to the United States that people are so desperate for work that they'll take all these chances--crowd into trailers, die in trailers, cross hazardous mountains and walk across the desert--to come over here to work. I think that's a major indictment of Mexico's inability to employ its population at a standard of living which allows them to remain at home."

The U.S. Senate voted to approve CAFTA in June, and it passed in the House of Representatives in July by a two-vote margin. The agreement eases trade barriers between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. Two countries, Panama and Belize, are in Central America but are not part of the deal.

In the months leading to CAFTA's approval, Houston area groups protested the agreement. In late 2003, 10 activists argued for Central American farmers'rights. The group dressed in black and carried a coffin decorated with anti-CAFTA messages in English and Spanish in a mock funeral procession up Hilcroft Ave. to the El Salvadorian consulate.

When they reached the consulate, they spilled bags of corn at the doorway and chanted "campesinos tengan fe; digan no a la t.l.c." or "farmers have faith; say no to the free trade agreement."

At least 26 Houston area firms have offices in the CAFTA countries and 1,158 Houston firms trade with Central America, the Greater Houston Partnership says. More than 1,200 Houston companies trade goods and services with the countries of CAFTA. The CAFTA partner countries combined economies of $66 billion include approximately $20 billion in imports and exports to the United States.

A report for Congress concluded that CAFTA may expand U.S. trade at the margin but only at a small macro-economic level. The dollar value of U.S. trade with Central America represents less than 1 percent of U.S. foreign commerce.

Critics to CAFTA say the trade measure will cost the United States jobs in the sugar and textile industries and have only a modest impact on the U.S. economy.

Low-skilled workers often lose their jobs under free trade agreements because manufacturers are free to use profits and capital accumulated from U.S. consumers to move factories to CAFTA countries where labor is cheaper and laws prevent unions.

NAFTA was approved under President Clinton's administration 12 years ago as a continental trade pact between the United States, Canada and Mexico.

Opponents of NAFTA included former presidential candidate Ross Perot, who predicted that Americans would hear a "giant sucking sound" of jobs headed south.

The agreement promised economic gains for U.S. Hispanics and more than 200,000 jobs in the treaty's first two years. Labor and environmental standards were supposed to improve on both sides of the border. Substantial funds were also promised for U.S.-Mexico border clean-up efforts.

In reality, more than a million U.S. jobs were displaced after NAFTA was signed. The trade balance for agricultural and food products with Mexico has not changed. A major study concluded that Mexico's agricultural sector has lost more than 1.3 million jobs.

Gabriela D. Lemus, director of policy and legislation for the League of United Latin American Citizens, denounced LULAC's support of NAFTA in September and said CAFTA will hurt Hispanics in the United States.

If the broken promises of NAFTA are any indication, this pain will come in the form of disappearing jobs, rising undocumented immigration and immigrant exploitation.

Mindiola said immigrant workers in lower paying jobs face two kinds of exploitation at the hands of employers.

"Exploitation can be both official and unofficial," Mindiola said. "Official exploitation would be immigrants who work for companies who follow the rules and deduct Social Security, which undocumented immigrants will never be able to collect. They're exploited in that sense. (As for unofficial exploitation,) the stuff that I've read says many companies, of course, do not pay them the standard rates for their skills. Many of them are paid in cash."

American manufacturers benefited from immigrant workers displaced because of NAFTA. U.S. manufacturers facing Asian competition flocked to Mexico to take advantage of wages that were a tenth of wages paid in the United States. In 12 years, Mexican exports grew threefold, to $161 billion from $52 billion. Mexico's per capita income rose 24 percent, to just over $4,000.

Chair of the department of sociology at the University of Houston Nestor Rodriguez said that beyond a minimal level of effort, the Bush administration is failing to protect immigrant workers.

"There's not enough done to protect immigrant workers," Rodriguez said. "Those who are here legally get the protections that they're entitled to under law. There are substantial protections--minimum wage and the Fair Labor Standards Act. Those who are here as undocumented, the government does not see the need to protect those workers beyond a very minimal level because they see it as 'Well, they shouldn't be here. They're trespassers.' The focus of the government should be on how to apprehend them and deport them--that's the government's perspective. The government is in no big hurry to protect those workers."

Rodriguez said the administration must redirect the focus of free trade agreements from economic development to civil rights protection.

"What needs to be done is to go beyond the original plan, which was really how do we invest capital in Mexico and get cheap commodities in the U.S. to how do we use NAFTA and CAFTA to create a migration policy so Mexican workers who are coming here are not coming as undocumented workers but with visas to work, temporary or otherwise," Rodriguez said.


CAFTA and Houston
More than 1,200 Houston companies trade goods and services with the countries of CAFTA.

HOUSTON’S BUSINESS TIES WITH CAFTA COUNTRIES
Country	Houston Companies with Subsidiaries in Country	Foreign-Owned Companies with Offices in Houston
Costa Rica	12	0
Dominican Republic	3	0
El Salvador	5	1
Guatemala	4	1
Honduras	1	0
Nicaragua	1	0
Source: International Houston: 2004-05 International Business Directory, Greater Houston Partnership.

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