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  1. Negotiations

US-DR-CAFTA

The US-Central America Free Trade Agreement, commonly referred to as “CAFTA,” was signed in December 2003 after twelve short months of negotiation. The negotiations involved the US, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica at first refused to join the agreement, then changed its position in late January 2004. The US separately negotiated a bilateral treaty with the Dominican Republic, with a view to folding the deal, and the country itself, into the US-CAFTA scheme.

The US-CAFTA was signed late May 2004, and the Dominican Republic became an additional party to it in August 2004. Since then, the accord has been officially renamed the “United States-Dominican Republic-Central America Free Trade Agreement” or US-DR-CAFTA. But the overall agreement — which a lot of people continue calling just “CAFTA” — still needs ratification by all parties to go into force.

CAFTA is a wide-ranging agreement covering many areas: agriculture, telecommunications, investment, trade in services (from water distribution to gambling), intellectual property, the environment, etc. It essentially serves US business interests by giving them a concrete and high-level set of rights to operate in Central America. Some US sectors, such as sugar producers, feel threatened by the treaty. But by and large, the threats are mainly against the Central American countries which signed on, as it opens the depths of their economies — public and private — to the interests and power of US companies.

In July 2005, US Congress approved the DR-CAFTA and Bush signed it into law in early August. The Central American parliaments eventually also approved it. For the Dominican Republic, the treaty took effect in 2006.

Costa Rica was the Central American country with the strongest resistance to DR-CAFTA. There were large public demonstrations and information campaigns, and a broad grouping of civil society organizations, from trade unions to small farm organizations, signed on. This coalition successfully pushed for a referendum on ratification, which was held on 7 October 2007. The result: 51.62% in favour and 48.38% opposed. The result was considered binding since more than 40% of the electorate voted. In view of these results, CAFTA was ratified.

On December 23, President Bush issued a proclamation to implement the DR-CAFTA for Costa Rica as of 1 January 2009.

last update: May 2012
Photo: Public Citizen

Nicaraguan parliament postpones approval of FTA
5-May-2005
Nicaragua’s National Assembly has delayed the approval of the free trade agreement (FTA) between Central America and the United States, on grounds that its population will not benefit from the deal.
Central America lags on labor rights for trade deal
5-May-2005
Sitting in a dark room beneath photographs of union leaders slain in the 1980s, workers at a Guatemalan factory say they have been punched, threatened and followed by cars with darkened windows since forming a union in 2003.
Costa Rica balks at free-trade pact
4-May-2005 WSJ
With President Bush’s plan to bind Central America and the US in a free-trade pact already facing tough opposition in Congress, an obstacle has surfaced that further threatens the pact’s chances of passage.
Sound CAFTA alarm bells
26-Apr-2005 Bangor News
International trade agreements are boring. Mention the North American Free Trade Agreement (NAFTA) or the Central American Free Trade Agreement (CAFTA) in most social settings and people’s eyes glaze over. The pros and cons of NAFTA, and now CAFTA, debate trade-offs between tariffs, consumer prices and job growth or loss. Since most of us are not economists, these discussions seem tedious and complicated.
AIDS patients see life, death issues in trade pact
23-Apr-2005 LA Times
Public health experts fear that hope might fade for thousands of the region’s chronically ill if the Dominican Republic-Central American Free Trade Agreement, known as CAFTA, is approved this year.
Statement of Farabundo Martí National Liberation Party
22-Apr-2005 House and Ways Committee
The FMLN rejects the mercantilist logic of the “free trade” agreements. A critical analysis of the CAFTA texts reveals the many negative impacts of the agreement, which would have on the daily life of the people and ecosystems of our countries—especially on women and impoverished families—as national sovereignty is eroded, legal frameworks are corrupted, and the neo-liberal nature of public policy is reinforced.
Senators voice concerns over CAFTA
19-Apr-2005
The Bush administration’s proposed free trade agreement with Central American nations was met with a barrage of objections from senators Wednesday, signaling a hard road ahead.
Bush to woo Hispanic support for CAFTA trade pact
19-Apr-2005
President Bush is expected to step up pressure for Congress to quickly pass a new free trade agreement with Central America, beginning with a speech this week to a Hispanic business group, industry officials said on Monday.
US lawmakers express skepticism about Central American trade pact
14-Apr-2005 Knight Ridder
For the first time since Congress fought fiercely over the North American Free Trade Agreement 11 years ago, a US president’s proposed trade deal faces major resistance on Capitol Hill.
CAFTA passage by US Congress far from certain
5-Apr-2005
Supporters of the proposed Central American Free Trade Agreement (CAFTA) have attempted to create the impression that the United States Congress is likely to ratify CAFTA in the coming session. This is a concentrated effort to spread disinformation about the true nature of the situation in Washington.