CAFTA Isnt the Answer

Opinion: The Central American Free Trade Agreement won't really help American tech workers.

In a refreshing bit of global discontent, those folks chanting, "Down, down, U.S.A." in Tegucigalpa, Honduras, recently werent angry about war in the Middle East. They were upset about MCI, Nortel, Sprint, Dell and the Business Software Alliance.

Not to mention rice, beans, sugar and sweatshops.

While garnering little attention here at home, Congress march toward acceptance of the Central American Free Trade Agreement is a full-on spectator sport in Honduras, Guatemala, Costa Rica, Nicaragua, El Salvador and the Dominican Republic. If CAFTA is about bringing the hemisphere together to compete globally with the likes of China, a fair bit of Central America is coming along kicking and screaming.

The tech industry supports CAFTA, the bastard son of NAFTA, for its ability to open untapped foreign markets while tech at home is stagnant. Urging Congress to ratify CAFTA, the BSAs Robert Holleyman said, "CAFTA promotes strong intellectual property rights protection, barrier-free e-commerce, full liberalization of trade in information technology services with and among our trading partners in the region, and fair and open government procurement."

Hes right, assuming youre an American industrialist and not an employee of Instituto Costarricense de Electricidad. According to the BSA, NAFTA did wonders for reducing piracy of U.S.-made software in Mexico, though a reciprocal bump in Mexicos tech segment is hard to find.

CAFTA is loosely based on the concept of competitive advantage, which urges getting folks out of the businesses they are currently engaged in and into more profitable, specialized endeavors. Once tariffs fall as a result of CAFTA, cheap U.S. beans, rice and cell phone service will likely flood Central America. The displaced farmers, along with employees of government-run telecommunications monopolies such as Costa Ricas ICE, are supposed to, in turn, grow sugar. As any 16th-century conquering European explorer could tell you, thats what these places are really good for. Thats their competitive advantage.

If U.S. lawmakers learned anything from NAFTA, its the value of a one-way street. The big sugar lobby in the United States has all but gutted any provisions in the draft legislation that would allow other CAFTA members significant access to our markets. The folks burning our flag in Colotenango, Guatemala, well understand which end of the stick they are getting when Telecommunications Industry Association President Matthew Flanigan says: "This agreement is good for the telecommunications industry as well as the whole U.S. economy, and we are excited about the prospect of moving forward toward final passage very quickly."

Think globally; lobby locally.

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Similar "considerations" in draft CAFTA language ensure that efforts to improve working conditions in Central America actually result in the relaxing of labor regulations abroad. It takes a lot of Hondurans to stitch American fabric into shirts that can compete with the Chinese textile industry.

But good global citizenship may not even be the best reason to oppose CAFTA. The raw truth is that the agreement is more about protecting corporate property rights than it is about free trade; it will be more harmful than helpful to American tech workers. The Communications Workers of America, the Society of Professional Engineering Employees in Aerospace and the American Ingenuity Alliance have spent two months trying to show Congress that opening up markets that account for less than 2 percent of the worlds IT sales is hardly worth the risk to American tech jobs. We already sell more to Belgium than to all the CAFTA countries that would be made duty-free combined.

Among the provisions opponents find most disturbing is that CAFTA doesnt simply call for member nations to drop tariffs. It makes the Central American members participants in the World Trade Organizations Information Technology Agreement, opening whatever IT market these countries will support equally to all 63 ITA nations. If you guessed that includes China, youd be right.

Thus, IT representatives solidarity with farmers in Central America. For U.S. tech workers, it may be time for a little marching and chanting of their own.

Executive Editor/News Chris Gonsalves can be contacted at

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