June 10, 2005 | Page 3

A PROPOSAL to extend NAFTA southward has triggered mass opposition in Central America--and could even be in trouble in the U.S. Congress as well.

Organized labor has been lobbying against the Central American Free Trade Agreement (CAFTA), which includes Honduras, Guatemala, El Salvador, Costa Rica, Nicaragua and the Dominican Republic. Yet with unions consumed in an internal struggle over control of the AFL-CIO, some of the biggest resistance to CAFTA has come from politicians on the payroll of the sugar lobby, which benefits from agricultural subsidies that would be cut under the deal.

Most of big business, however, is closing ranks in support the deal--though not so much because the treaty itself is critical to the U.S. economy. The New York Times--which supports the pact--sneered that the agreement includes "six Central American countries that altogether have a combined economy smaller than Connecticut's."

But CAFTA is important because the U.S. has lost momentum in advancing Corporate America's interests in the World Trade Organization and in forming the Free Trade Area of the Americas (FTAA)--and it faces a backlash to free-market, neoliberal policies across Latin America. If CAFTA fails, George W. Bush will head into November's Summit of the Americas meeting in Buenos Aires with a weak hand as he tries to revive the flagging FTAA.

Besides, there is money on the line for U.S. agribusiness--the sugar bosses notwithstanding. U.S. agricultural exports to Central America would double, according to government predictions. Oxfam estimates that U.S. exports of corn to CAFTA countries would increase 10,000 percent in one year.

This threatens a repeat of the experience of NAFTA in Mexico, where U.S. imports drove 1.7 million farmers off their land over the decade following the trade deal's implementation.

What's more, CAFTA is a complement to another initiative, Plan Puebla Panama, which aims to build up the infrastructure of southern Mexico and Central America. The plan's aim is twofold: integrate the region militarily on the pretext of supporting the U.S. "war on drugs," and support corporate exploitation of Central America's natural resources, which constitute the greatest biodiversity in the world after the Amazon.

The big pharmaceutical companies want control of those resources. CAFTA would give them leverage because the trade deal includes the "investor-state" provisions of NAFTA, which allow companies to sue to overturn laws that impact their profits.

The poor, debt-burdened countries of Central America--still ravaged by Washington's dirty wars in Nicaragua and El Salvador in the 1980s--were expected to be easy pickings for U.S. free traders. Instead, the advance of CAFTA has sparked a revival of social struggle across the region.

In Guatemala, some 30,000 protesters blockaded parliament last spring when CAFTA came up for a vote--and the government unleashed savage repression reminiscent of the 1980s military dictatorship. There were similar protests in Honduras, which has seen a series of protests against free trade since 2002, despite a campaign of violence against indigenous and peasant activists.

Nicaragua has seen mobilizations against the deal amid an overall revival of the left, and even Costa Rica--long the most stable country in Central America--experienced major protests following the legislature's approval of the deal. On June 1, marchers throughout El Salvador protested the conservative rule of President Antonio Saca, who is pushing CAFTA even as the country teeters on the edge of economic collapse.

And in Panama--not part of CAFTA, but long dominated by the U.S.--a general strike was set for June 8 to protest the government's plan to raise the retirement age and lengthen years of service to qualify for a pension.

Another blow to the U.S. came in South America in April, when mass protests forced the resignation of Ecuador's President Lucio Gutiérrez before he could complete a separate free-trade deal that Washington hoped would give a boost to CAFTA. Washington is also worried about Mexico City Mayor Ándrés Manuel López Obrador, now the frontrunner for the 2006 Mexican presidential election, who has criticized the devastating impact of NAFTA on Mexico.

Activists in the U.S. need to join in solidarity with their sisters and brothers in Central America in challenging CAFTA--and opposing Corporate America's free-trade, free-market agenda at home and abroad.

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