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REGION HAS SQUANDERED ITS BALANCE OF TRADE UNDER CAFTA, SAYS REPORT; COSTA RICA HAS DONE BETTER WITHOUT THE TREATY.

Article Excerpt
The countries that signed on to the Central America Free Trade Agreement (CAFTA) have, in the last year, all lost their favorable trade balances with the US, says a report from the Red Regional de Monitoreo de los Impactos del TLC en Centroamerica. The Red is a group of more than 15 organizations from the CAFTA countries, including the Confederacion Guatemalteca de Federaciones de Cooperativas (CONFECOOP), the Centro de Estudios en Inversion y Comercio de El Salvador (CEICOM), the Coalicion Hondurena de Accion Ciudadana (CHAAC), the Movimiento Social Nicaraguense, and the Comision Nacional de Enlace de Costa Rica. The report is published in English as DR-CAFTA Year Two: Trends and Impacts.

The organizations, as well as the Red itself, which is called the Stop CAFTA Coalition in English, are unabashedly and fervently anti-CAFTA. Nevertheless, figures and calculations used in the report are those of the US and the respective regional government agencies.

Exports ebbed as imports flowed to the region; the massive influx of companies, jobs, and investments has not materialized, and the figures cited in the report point to a general deterioration of living standards for those whom CAFTA promoters promised so much more.

"In short," says the report, "the parties to the agreement are experiencing an overall worsened trade balance with the US. Imports of US agricultural products to the region have outpaced exports, Central American and Dominican producers fail to compete against subsidized US agricultural goods."

The influx of these agricultural goods has created a condition whereby, as noncompetitive producers go under, the region is losing its ability to feed itself and is squandering its food security as it grows increasingly dependent on US imports. The emergence of the biofuels industry is amplifying the negative effects, particularly for a region where corn is the major dietary staple. As local producers scale back and large producers sell more and more into the biofuels market, prices for corn and corn products spiral out of consumers' reach (see NotiCen 2007-04-12, 2007-05-03 and 2007-08-16 and SourceMex,...