Interview with a Nicaraguan Free Trade Zone Worker

By WfP Nicaragua Team

“What I would like and what I hope for (my country) is that in every Free Trade Zone there be a union and that workers would not be mistreated and would be paid a just salary. But that can’t be so one has to continue working like always because that can’t be.” -Free Trade Zone Worker, Nicaragua 

This quote comes from a meeting between a Witness for Peace delegation and a Nicaraguan Free Trade Zone worker, recorded (with interpretation). The delegation came to Nicaragua to learn about the Central American Free Trade Agreement (DR-CAFTA) and how it has affected the lives of our Nicaraguan partners. The speaker shared with the group the challenges she has faced working for many years in the Free Trade Zone textile factories that CAFTA helped to propagate. When she began working, she suffered a lot of verbal abuse at her job. She had bosses who screamed and threw things at her. She was obligated to work overtime and didn’t receive adequate medical care or sick leave. 

The most recent factory she worked at was quite different. Despite the owner's attempts to fire workers who were trying to form a union, workers were successful in gathering enough signatures so that is the factory had to recognize them. The union has made big changes in the factory. Our speaker had access to a medical clinic, better safety equipment, and a subsidy for food and transportation; she was not required to work overtime; and, most importantly, had someone to go to if she had any kind of problem.

Working in a factory with a union, she told the group, is not common in her region. Anyone who is found organizing a union will be fired and added to a list shared among all of the Free Trade Zones of people not to hire. Even her daughter who saw the benefits the unionized factory brought her mother is afraid to sign demands for a union in her factory for fear of getting caught. She needs the job.

Nicaragua is supposedly a CAFTA success story. Its GDP is rising steadily and the enforcement of the labor section of CAFTA has been celebrated. When talking to workers, however, we often hear a different story. Many of the workers, often single mothers, are grateful for the jobs created by these factories. The unfortunate truth is that in a development model such as that of CAFTA, where those at the negotiating table are the most powerful corporations, profits are given more value than just salaries and healthy work environments.

Witness for Peace has seen similar situations play out in the other countries in which we work. Since the signing of the bilateral trade agreement with Colombia, violence against union workers has increased making Colombia one of the most dangerous countries in the world for a union member. Mexican workers have seen a decrease in real wages since the signing of North American Free Trade Agreement (NAFTA.)

Today negotiations are happening behind closed doors for the biggest free trade agreement yet. The Transpacific Partnership (TPP) will include 12 nations and the consequences will be catastrophic for workers across the globe. We know what Free Trade Agreements have done to workers. While corporate profit trumps workers rights, these agreements will not benefit workers. Take action to demand that the TPP come out from behind from closed doors, and that workers have a seat at the negotiating table. Audio from the “Labor Radio” program from KBOO Radio in Portland.

Entrevista con una trabajadora de una Zona Franca en Nicaragua

Por Equipo de APP Nicaragua

" Lo que me gustaría y deseaba es que en todos la Zonas Francas tienen un sindicato donde no fueron maltratados y, si, pagan un salaria justo. Pero eso no se puede---siempre uno tiene que trabajar así porque eso no se puede.” Trabajadora de una Zona Franca

Esta cita viene de una reunión con una delegación de Acción Permanente por la Paz y una nicaragüense que trabaja en las Zonas Francas, grabada (con traducción) en el clip de audio. La delegación llegó a Nicaragua para aprender sobre el Tratado de Libre Comercio de Centroamérica (DR -CAFTA) y cómo ha afectado la vida para nuestros companerxs nicaragüenses. La trabajadora compartió con el grupo los retos que ha enfrentado en su trabajo durante muchos años en las fábricas textiles ‘Zona Franca,’ propagadas por CAFTA. Cuando ella comenzó a trabajar, sufrió mucho abuso verbal en su trabajo. Tenía jefes que le gritaban y le arrojaban cosas. Ella fue obligada a trabajar horas extras y no recibió ni atención médica adecuada ni días pagados de enfermedad.

La última fábrica donde ella trabajó era muy diferente. A pesar de los intentos de los propietarios a despedir a los trabajadores que intentaban formar un sindicato, los trabajadores lograron reunir suficientes firmas para que la fábrica tuviera que reconocerlos. El sindicato ha hecho grandes cambios en la fábrica. La trabajadora indicó que en esta fábrica tenía acceso a una clínica médica, un mejor equipo de seguridad, y un subsidio para la alimentación y el transporte; ella no fue obligada a trabajar horas extras; y, sobre todo, tenía dónde ir si tenía algún problema en el trabajo.

Trabajar en una fábrica con un sindicato, comentó al grupo, no es común en la región. Cualquiera que se encuentre organizando un sindicato, será despedido y su nombre será agregado a una lista compartida entre todas las Zonas Franca para que no se contrate a esta persona. Incluso su hija, quien vio los beneficios de la fábrica sindicalizada donde trabajaba su madre, tiene miedo de firmar demandas por un sindicato en su fábrica por miedo de que la descubran. Ella necesita el trabajo.

Nicaragua es supuestamente un ejemplo del éxito del CAFTA. Su PIB se está creciendo cada vez más, y la aplicación de la sección laboral del CAFTA ha sido celebrada. Sin embargo, al hablar con los trabajadores, muchas veces nos cuentan una historia diferente. Muchos de los trabajadores, en su mayoría madres solteras, están agradecidos por los puestos de trabajo creados por estas fábricas. La triste verdad es que en un modelo de desarrollo como el de CAFTA, en el cual los que están en la mesa de negociaciones son las corporaciones más poderosas, se valen más las ganancias que los salarios justos y las condiciones saludables de trabajo.

Acción Permanente por la Paz ha observado situaciones similares en los demás países donde trabajamos. Desde la firma del acuerdo bilateral de comercio con Colombia, la violencia contra los trabajadores sindicalizados se ha incrementado, tanto que Colombia es uno de los países más peligrosos del mundo para un miembro de un sindicato (enlace en inglés.) Los salarios reales de los trabajadores mexicanos se han disminuido desde la firma del Tratado de Libre Comercio de América del Norte ( NAFTA) (enlace en inglés.)

Hoy en día se está negociando detrás de puertas cerradas el acuerdo de libre comercio más grande que nunca. La Asociación Transpacífico (TPP ) incluirá 12 naciones y las consecuencias serán catastróficas para los trabajadores de todo el mundo (enlace en inglés.) Sabemos cómo los acuerdos de libre comercio han impactado a los trabajadores. Mientras las ganancias corporativas prevalecen sobre los derechos de los trabajadores, estos acuerdos no beneficiarán a los trabajadores. Tome acción ahora para exigir que el TPP salga de detrás de puertas cerradas y que los trabajadores tengan un lugar en la mesa de negociaciones (en ingles y español.)

Audio del programa “Labor Radio” del estación de KBOO en Portland

Ciudades Modelos: El nuevo experimento neoliberal en Latinoamérica

Por Elizabeth Perkins, Equipo de APP Honduras

La competición. Es un concepto inherente a la meritocracia estadounidense, la mentalidad que uno se puede zafar de cualquier situación difícil con suficiente determinación. La política económica del neoliberalismo promueve la competición como herramienta para promover el desarrollo económico. Se fundamenta en la suposición (hipótesis?) de que la competición incrementa la calidad y eficiencia. Para que un país ‘en desarrollo’ pueda crear trabajos desesperadamente necesitados, es necesario competir con otros países en atraer inversión extranjera. Esta ideología se manifiesta en los Programas de Ajustamiento Estructural (enlace en ingles), los tratados de libre comercio (enlace en ingles) como DR-CAFTA (enlace en ingles), y el establecimiento de zonas francas. Más recién, el proyecto de las Ciudades Modelos en Honduras ha capturado la imaginación de los economistas que promueven el libre comercio y la inversión extranjera como la forma de salir de la crisis económica del país.

Las promesas de desarrollo no son nuevas para Latinoamérica. Hace casi una década, DR-CAFTA consolidó políticas neoliberales que ya estuvieron puestas en práctica. Cuando CAFTA fue firmado en 2006, se le dijo al pueblo de Centroamérica que un incremento al comercio, a la inversión extranjera directa, a la disponibilidad del trabajo, y a la exportación provocaría un aumento de los ingresos y de la calidad de vida. En 2010, cuando Honduras decidió aumentar el salario mínimo 6.5%, 16 maquilas se mudaron a Nicaragua, donde el salario mínimo estaba a la mitad del de Honduras. Este es solo un ejemplo de la manera en que este tratado prioriza las corporaciones estadounidenses ante de los derechos de los trabajadores. Parece que el próximo paso en una progresión de políticas neoliberales impuestas en Centroamérica es la ley de ciudades modelos en Honduras, recientemente aprobada bajo el nombre: Zonas de Empleo y Desarrollo Económico (ZEDE).

Desde los finales de 2010, Honduras se encuentra debatiendo la cuestión de las ciudades modelos en su territorio. En su encarnación mas recién, las ciudades son definidas como divisiones administrativas del país, sujetas al gobierno central pero con autonomía en cuanto a los sistemas políticos, económicos y judiciales, con reglas claras del mercado que permiten un alto nivel de competición. Dicho en otras palabras, son regiones dentro de un país con poco control o regulación gubernamental. La meta es atraer inversión y generar empleo en regiones deshabitadas del país o en municipalidades solicitando la conversión por consulta popular.

Ha sido un debate intenso promovido principalmente por los representantes del Partido Nacional Porfirio Lobo Sosa (ex presidente ‘elegido’ después del golpe de 2009) y Juan Orlando Hernández (ex líder del Congreso Nacional y Presidente actual). Para que Honduras pudiera acomodar esta idea nueva, primero tuvieron que cambiar la constitución, y luego fue necesario aprobar la ley por un voto mayoritario por parte del Congreso. Aunque esencialmente igual, dicha ley ha pasado por varias encarnaciones. Nació como las ciudades modelos (enlace en inglés) de Paul Romer, luego se redactó como ley, la propuesta conocida como Regiones Especiales de Desarrollo (RED), y actualmente la ley se conoce bajo el nombre de las Zonas de Empleo y Desarrollo Económico (ZEDE). Al inicio, la Corte Suprema de Justicia declaró que la ley de las RED fue inconstitucional en octubre de 2012. Solo dos meses después en lo que ahora se conoce como un ‘mini-golpe,’ 4 del lxs 5 jueces que rechazaron la ley fueron destituidxs de sus puestos. La ley de las ZEDE fue aprobada el siguiente año. El mes pasado nombraron Choluteca como el primer sitio ZEDE.

“Ciudades modelos = Expulsión del pueblo Garífuna de Honduras.” Grupos de resistencia protestan las ciudades modelos frente el Congreso Nacional en Tegucigalpa en enero de 2013. Foto por Elizabeth Perkins
 

Los grupos de la resistencia hondureña citan “una enorme inequidad y brecha social, la cual se incrementó a partir del golpe de estado.” La desigualdad socioeconómica se hace cada vez más drástica, mientras el Congreso Nacional impone más y más leyes neoliberales, como la ley ZEDE. Representantes del FNRP presentaron argumentos en la Corte Suprema de Honduras en febrero pidiendo que lxs jueces declaren la ley ZEDE inconstitucional, como es básicamente la misma ley de RED declarada así en 2012.

Mark Klugmann (enlace en inglés), un norteamericano nombrado por Juan Orlando como el promotor de las ZEDE en el exterior, recientemente dio una entrevista al periódico hondureño El Tiempo. El mismo dijo: “Creo que CAFTA abrió nuevas posibilidades y Honduras, con las ZEDE, se convierte en el lugar más atractivo de la zona CAFTA. Estamos escuchando que personas que tienen empresas en los países vecinos y que están exportando bajo CAFTA, quieren trasladarse a Honduras.” Sostienen, que la ley de las ZEDE ayudará a disminuir la migración (enlace en inglés) porque ofrece varias oportunidades de trabajo.

La Organización Fraternal Negra de Honduras (OFRANEH) comentó en su blog, “La palabra empleo se ha convertido en el señuelo para capturar la imaginación de un pueblo pauperizado y sumido adrede, en la ignorancia y desinformación.” Uno de los problemas más grandes con este plan es que no hay un pedazo de tierra suficientemente grande para acomodar una ciudad de millones de personas. Comunidades campesinas e indígenas como OFRANEH, cuyas comunidades han sido nombradas como sitios posibles de ZEDE, están preocupadas.

Según OFRANEH, la Comisión para la Erradicación del Racismo y Discriminación (CERD) de las Naciones Unidas en su informe de febrero expresó preocupación sobre el impacto que va a tener esta ley ZEDE en grupos indígenas y afrodescendientes. El informe urge el gobierno hondureño a reevaluar la compatibilidad de la ley con tratados internacionales de derechos humanos cuya ratificación protegen a los grupos indígenas y afrodescendientes.

“El partido nacional desde su fundación se ha distinguido por una actitud paradójicamente antinacionalista, siendo en estos períodos donde han manejado las riendas del poder, que se han caracterizados en la entrega de territorio nacional y la subordinación a las compañías bananeras,” dice OFRANEH. Según los intereses de las grandes corporaciones, no los del pueblo, el gobierno hondureño sigue adelante con las ZEDE. Aunque el gobierno estadounidense no está directamente involucrado en este proyecto, promoverá intereses inversionistas de EE.UU., ampliando la brecha cada vez más grande entre los ricos y los pobres en Honduras y el mundo entero.

Charter Cities: The new neoliberal experiment in Latin America

By Elizabeth Perkins, WfP Honduras Team

Competition. It’s an inherent concept of U.S. meritocracy, the ‘pull yourself up by the bootstraps’ mentality. (That’s assuming everyone has boots in the first place). Neoliberal economic policy promotes competition as a tool for economic growth. It is based on the assumption that competition improves quality and efficiency. For a ‘developing’ country to create desperately needed jobs, it must compete with other countries to attract foreign investment. This ideology is manifested in Structural Adjustment Programs, free trade agreements like DR-CAFTA and the establishment of free trade zones. Most recently, Charter Cities in Honduras have captured the imagination of economists touting free trade and foreign investment as the country’s way out of financial crisis.

Promises of development aren’t new to Latin America. Nearly a decade ago, DR-CAFTA consolidated neoliberal policies that were already in place. When CAFTA was passed in 2006, Central Americans were told that increases in trade, foreign direct investment, job availability, and exports would raise incomes and standards of living. In 2010, when Honduras decided to raise its minimum wage 6.5%, 16 textile factories picked up and moved to Nicaragua, where minimum wage was half that of Honduras. This is just one example of how this agreement prioritizes U.S. corporations over the rights of workers. The next step in a progression of neoliberal policies being forced on Central America seems to be Charter Cities in Honduras, recently passed into law with the name Zones for Employment and Economic Development (ZEDE).

Since the end of 2010, Honduras has been debating the idea of charter cities in its territory. In the most recent incarnation, the cities are defined as administrative divisions of the country, subject to central government but given autonomy with political, economic, and judicial systems with clear market rules that allow high levels of competition. In other words, they are regions within a country with little governmental control and regulation. The goal is to attract investment and generate employment in uninhabited regions of the country or in municipalities applying for conversion by referendum.


It has been an intense debate pushed primarily by National Party representatives Porfirio Lobo Sosa (former president ‘elected’ after the 2009 coup) and Juan Orlando Hernandez (former leader of the National Congress, and current President). For Honduras to accommodate this new idea, first the constitution had to be changed, after which the law needed a majority vote in Congress. Though essentially the same, it has passed through different incarnations – born as Paul Romer’s charter cities, then drafted into law as Special Development Regions (RED), and most recently passed as the Special Economic Development Zones (ZEDE) law. The first time around, the Honduran Supreme Court of Justice declared RED’s unconstitutional in October 2012. Just two months later in what became known as a ‘mini-coup,’ 4 of the 5 justices who passed the ruling were removed from their posts. ZEDE’s were passed into law the following year. Last month Choluteca was declared as a site for the first ZEDE.

“Model Cities = Expulsion of Garífuna People of Honduras.” Resistance groups protest model cities outside National Congress in Tegucigalpa in January 2013. Photo by Elizabeth Perkins

Resistance groups cite “an enormous inequality and social divide, which has been increasing since the 2009 coup d’état.” Socioeconomic inequality is becoming more drastic, as the National Congress pumps out more and more neoliberal laws, like the ZEDE. National Front of Popular Resistance (FNRP) representatives presented arguments to the Honduran Supreme Court in February (link in Spanish) requesting the justices declare the ZEDE law unconstitutional, as it’s essentially the same RED law that was declared so in 2012.

Mark Klugmann, named by Juan Orlando as the North American representative to promote the ZEDE externally, was recently interviewed by Honduran newspaper El Tiempo (article in Spanish). He says, “CAFTA opened up new possibilities and Honduras becomes the most attractive place for investment with the ZEDE. Investors in neighboring countries are looking to relocate to Honduras.” He argues that the ZEDE will help slow migration because it will offer a variety of jobs.

The Black Fraternal Organization of Honduras (OFRANEH) commented on their blog (link in Spanish), “The word employment has become the lure to capture the imagination of a people made poor and intentionally sunk into ignorance and disinformation.” One of the biggest problems with this plan is that there is no piece of uninhabited land large enough for a city of several million people. Small farming communities and indigenous groups like OFRANEH, whose homes have been named as potential ZEDE sites, are worried.

According to OFRANEH, the United Nations Commission for the Eradication of Racism and Discrimination (CERD) in their report (in Spanish) last month expressed concern for the impact the ZEDE law will have on indigenous and afro-descendant groups. The report urges the Honduran government to reevaluate the compatibility of the law with international human rights treaties it has signed protecting these groups.

“The National Party, since it’s founding, has distinguished itself with a paradoxical anti-nationalist attitude, the periods in which they’ve been in power being characterized by the turning over of national territory and subordination to the banana companies,” states OFRANEH. In the interest of big business, not that of the people, the Honduran government is moving forward with the ZEDE law. Though the U.S. government is not directly involved in this project, it will serve to further U.S. investment interests, widening the ever-growing gap between rich and poor in Honduras and the rest of the world.

¿Qué hemos aprendido del DR-CAFTA en casi una década más tarde?: Comprendiendo la realidad nicaragüense

Por Ileana Valle, Equipo de APP Nicaragua

Según el Banco Mundial, Nicaragua fue capaz de mitigar la crisis económica global en 2008. De hecho, ha tenido un crecimiento económico impresionantemente estable durante la última década. En 2012, el crecimiento del PIB de Nicaragua fue del 5,2 %, ligeramente superior al crecimiento de 5,1 % observado en 2011. ¿Podría ser esta el Tratado de Libre Comercio entre la República Dominicana, Centroamérica, y los Estados Unidos llenando sus expectativas? Este ha sido el debate.

Volvamos a 2003, cuando la retórica en torno a este polémico acuerdo se centró principalmente en cómo el TLC no sólo impulsaría la economía de Estados Unidos, sino también, sin ayuda de nadie, iba a sacar Centro América y la República Dominicana de la pobreza.

Se completó el proceso de negociación inicial con Nicaragua en un tiempo récord - un año. Esto por sí solo creo una nube dudosa sobre las verdaderas intenciones detrás del acuerdo. Dentro de este marco de tiempo, sólo unos pocos estaban realmente presentes en la mesa de negociaciones. Mario Arana, miembra de la Fundación Nicaragüense para el Desarrollo Económico y Social (Funides), y Azucena Castillo, Gerente General de la Asociación de Productores y Exportadores de Nicaragua (APEN) fueron algunos de los representantes nicaragüenses nombrado por el entonces presidente Enrique Bolaños. ¿Pero qué paso con la inclusión de los pequeños productores? Desde el principio, en el lado nicaragüense, vimos la escala desplazándose hacia las grandes empresas en lugar de todas las partes involucradas. Como hemos aprendido del TLCAN, este tipo de acuerdos unilaterales afectan negativamente a los pequeños productores cuya subsistencia depende de su pequeña producción. Ellos luchan por competir con las corporaciones agrícolas masivas de los EE.UU. que cuentan con las políticas de subsidios. Así que sin duda, este acuerdo no es muy justo dependiendo de qué lado de la dinámica de poder se encuentre.

Aunque la evidencia concreta a favor o en desacuerdo del TLC aún no se ha encontrado, me reuni con un economista nicaragüense para poner todos los factores que contribuyen a esta realidad compleja, en perspectiva.

Industria de Res

En primer lugar, la carne de res de Nicaragua es conocida por ser una carne de calidad global superior y más saludable, que su contraparte norteamericana. Además, Nicaragua es el principal exportador de carne de res a Costa Rica y El Salvador, y el número 2 detrás de los EE.UU., a Guatemala (USMEF.org 2014). Ahora pro medio del TLC, la industria de la carne estadounidense ha comenzado a importar en Nicaragua, y el resto de Centro América, a un costo significativamente más bajo - más bajo que el costo de producción de carne local en Nicaragua. Además, la gigante cadena de tiendas depredador Wal-Mart, se ha beneficiado de forma cómoda y se ha convertido en un competidor directo no sólo con su venta de carne de res estadounidense, sino también con su dominio de supermercados en Nicaragua. Así que Wal-Mart se le facilita importar carne de res a Nicaragua con cargos de impuestos mínimos a través de las mismas cuotas establecidas entre Nicaragua y los EE.UU. En otras palabras, Wal-Mart puede aprovechar el menor costo para importar carne en Nicaragua y el resto de América Central con el fin de competir con carne de producción local y a la vez, compiten directamente con los supermercados locales.

¿Qué significa todo esto? Pues bien, teniendo en cuenta que Nicaragua ha sido exitosamente el principal exportador de carne en Centro América, y ahora está siendo amenazada la economía nicaragüense en general. Más importante aún, los productores locales no pueden competir de manera realista con estas exportaciones - así que ¿en dónde se estipula en el TLC medidas de protección a los pequeños productores? Además, ¿será que la economía nicaragüense se beneficia de los incrementos de ventas de Wal-Mart? Por supuesto que no. Estos ingresos vuelven a los EE.UU.

Entonces, ¿cómo podemos explicar el crecimiento económico del que Nicaragua ha podido gozar?

Diversificación de cultivos

La comunidad agrícola ha logrado mantenerse a flote gracias a sus esfuerzos de diversificación exitosos. Agricultores nicaragüenses cambian lo que cultivan de manera que vaya cambiando la demanda internacional. Como resultado, varían sus cultivos de año en año. Además, entre las mayores exportaciones de Nicaragua está el café – debido a su manera de cambiar sus cultivos, les permitió beneficiarse considerablemente de la sequía que ocurrió en Brasil, que hizo que el precio del café se disparara. Por último, el oro es otra de las mayores exportaciones de Nicaragua; por lo que es importante mencionar que tanto el café como el oro - cuyas ventas constituyen la mayor parte del PIB de Nicaragua - son industrias no reguladas por el TLC.

Nuevos mercados

Buscando nuevos mercados es probablemente uno de los factores más importantes en la dinámica económica de Nicaragua. Nicaragua ha exitosamente podido participar en nuevas oportunidades de mercado con la Alianza Bolivariana para los Pueblos de Nuestra América (ALBA). ALBA es una alternativa a los acuerdos de libre comercio del norte que fue iniciado por Venezuela y Cuba - liderados por Hugo Chávez y Fidel Castro, respectivamente.

A través de este acuerdo, Nicaragua es capaz de exportar el arroz que ya no puede competir con el arroz estadounidense que entra a Nicaragua, a Venezuela. Este es uno de otros granos básicos que han comenzado a exportar a Venezuela. Estas estrategias combinadas han aliviado los efectos del TLC, y han contribuido en gran medida al crecimiento continuo. Según el economista que consultamos, las cosas se pondrían feas si ALBA dejaría de existir.

Entonces, ¿se han cumplido las expectativas de DR -CAFTA? Lejos de eso. Creo que se ha creado un espacio difícil en donde la capacidad de recuperación del pueblo de Nicaragua, ha jugado papel importante. La dependencia en la diversificación, en las industrias que no están reguladas por el TLC, y su participación en nuevas oportunidades de mercado les ha permitido no sólo sobrevivir, sino también mantener un crecimiento continuo. Así que al final, ¿quién gana con el TLC? Es evidente que son los EE.UU. y algunas grandes corporaciones privadas nicaragüenses - definitivamente no los pequeños agricultores nicaragüenses. ¿Qué hemos aprendido? Nicaragua ha tenido que ir en contra de - en lugar de trabajar en conjunto - el poder económico masivo que es los EE.UU.

What have we learned from DR-CAFTA Nearly a Decade Later: Understanding the Nicaraguan reality

By Ileana Valle, WfP Nicaragua Team

According to the World Bank, Nicaragua was able to mitigate the global economic crisis in 2008. In fact, it’s had impressively stable economic growth during the past decade. In 2012, Nicaragua’s GDP growth was 5.2%, slightly higher than the 5.1% growth seen in 2011. Could this be the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) living up to its high expectations? This has been the ongoing discussion.

Let’s go back to 2003, when the rhetoric around this controversial agreement was mainly focused on how DR-CAFTA would not only boost the United States’ economy, but also, single-handedly catapult Central America and The Dominican Republic out of poverty.

The initial negotiation process with Nicaragua was completed in record time - one year. This alone casted a dubious cloud over the actual intentions behind the agreement. Within this timeframe, only a select few were actually present at the negotiating table. Mario Arana, member of the Nicaraguan Foundation for Economic and Social Development (In Spanish: Funides), and Azucena Castillo, General Manager of the Association of Producers and Exporters (In Spanish: APEN) were some of the Nicaraguan representatives present– appointed by then President Enrique Bolaños. But what about the small producers? From the very beginning, on the Nicaraguan side, we saw the scale shifting toward larger corporations instead of all parties involved. As we have learned from NAFTA, these types of unilateral agreements negatively affect small producers whose entire livelihood depends on small production. They struggle to compete with the massive agricultural corporations in the U.S. aided by subsidy policies. So arguably, this deal isn’t very fair depending which side of the power dynamic you may find yourself on.

Although concrete evidence to favor or condemn DR-CAFTA is yet to be found, I sat down with a Nicaraguan economist to put all the contributing factors of this complex reality, into perspective.

Beef Industry
First, Nicaraguan beef is known to be leaner and is a healthier, overall higher quality meat, than their North American counterpart. Further, Nicaragua is the leading beef exporter to Costa Rica, and El Salvador, and number 2 behind the U.S., to Guatemala (USMEF.org 2014). Now through DR-CAFTA, the beef industry in the U.S. is able to import into Nicaragua, and the rest of Central America, at a significantly lower cost - lower than the cost it requires for local Nicaraguans to produce their beef. Additionally, the gigantic retail predator Walmart has been conveniently benefiting and has become a direct competitor not only with their sale of U.S. beef, but also with their domination of the supermarket scene in Nicaragua. So Walmart is actually able to import beef into Nicaragua with tax breaks through the same quotas established between Nicaragua and the U.S. In other words, Walmart can take advantage of the lower cost to import beef into Nicaragua and the rest of Central America in order to compete with locally produced beef and, thus, directly competing with local supermarkets.

What does this all mean? Well, considering that Nicaragua has successfully been the leading exporter of beef in Central America, now the Nicaraguan economy as a whole is being threatened. Most importantly, local producers can’t realistically compete with these exports – so where in DR-CAFTA does it protect the livelihoods of small producers? Further, does the Nicaraguan economy relish in the increased sales of Walmart? Of course not. This revenue goes back to the U.S.

So how do we explain the economic growth that Nicaragua has still managed to experience?

Crop Diversification

The agriculture community has managed to stay afloat due to its successful diversification efforts. Nicaraguan farmers change what they grow depending on international demand. As a result, they vary what they grow from year to year. Additionally, among Nicaragua’s largest exports is coffee - so their being able to change what they grow allowed them to strongly benefit from the drought that happened in Brazil that caused the price of coffee to skyrocket. Finally, gold is another one of Nicaragua’s largest exports; so it’s worth mentioning that both coffee and gold -whose sales make up the majority of Nicaragua’s GDP - are industries not regulated by DR-CAFTA.

New Markets

Looking for new markets is probably one of the most important factors in the Nicaraguan economic dynamic. Nicaragua has been able to successfully engage in new opportunities with the Bolivarian Alliance for the Peoples of our America (ALBA). ALBA is an alternative to the free trade agreements of the north that was started by Venezuela and Cuba - led by Hugo Chavez and Fidel Castro, respectively.

Through this agreement, Nicaragua is able to export the rice that can no longer compete with U.S. rice coming into Nicaragua, to Venezuela. This is among other basic grains they’ve began exporting to Venezuela. These combined strategies have alleviated the effects of DR-CAFTA, and have greatly contributed to the continued growth. According to the economist we consulted, things would get ugly if ALBA would cease to exist.

So, have the expectations of DR-CAFTA been met? Far from that. I think it’s created a difficult space where the resilience of the Nicaraguan people has played an important role. Being able to diversify, depend on industries that aren’t regulated by DR-CAFTA, and engaging in new market opportunities has allowed them to not only survive, but continue to grow. So in the end, who gains with DR-CAFTA? Clearly the U.S. and few large private Nicaraguan corporations - definitely not the Nicaraguan farmers. What have we learned? Nicaragua has had to go up against - instead of working alongside - the massive economic power that is the U.S.

The Impact of the TPP, Part One / El Impacto del TPP, Primera Parte

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Josh Wise, Minnesota Fair Trade Coalition

For nearly five years now, government bureaucrats and lobbyists on both sides of the Pacific Ocean have been negotiating the Trans-Pacific Partnership (TPP) in secret. Despite claims from the United States Trade Representative (USTR), Michael Froman, that this is going to be a “high-level” agreement that will create lots of jobs, everything we've learned through leaks to the public (which essentially amount to negotiators committing treason just to tell us what our government is proposing) shows that the TPP is poised to become yet another extension of the same failed trade policy and negotiating process that gave us NAFTA, CAFTA and a whole host of other agreements that have accelerated the race to the bottom for labor, environmental and human rights standards. Only this time, it's on a much larger scale.

Free trade advocates point to David Ricardo's theory of comparative advantage as the basis for eliminating trade restrictions. The idea is that if we eliminate government protections for industries, then countries will have to focus on producing what they are most efficient at and everyone pays a lower price for goods while profits are higher because of the efficiency. The reality is that the agreements that have been negotiated so far have been far from free, or even specifically about trade. Instead, what they have amounted to is a host of deregulation, and protections for investors (otherwise known as multinational corporations), which have limited the ability of governments to act in their public interest, whether in terms of labor standards, the environment or public health. This has boosted corporate profits immensely, but has resulted in a race to the bottom for the rest of us in terms of global living standards.

Why is it this way?
Well, it's really inevitable given the way we do trade negotiations. USTR is technically a diplomat, and as such, can keep trade negotiations classified. However, if you lobby the executive branch, you can get appointed as a “cleared adviser” to the negotiations, meaning you can see and influence the proposals. The TPP has more than 600 cleared advisers, many of whom represent major corporations. International treaties, of course, override all conflicting federal and local laws. So what we're left with is a system of lawmaking in which the lobbyists write the laws behind closed doors. It's no surprise then, that the final agreements disproportionately benefit the very same multinational corporations who wrote them.

What are the results?
The North American Free Trade Agreement has been in effect for 20 years as of 2014, and therefore provides the most data to analyze. Since NAFTA was enacted, the US has lost more than 1 million jobs to low-wage labor. And it’s not just low-skilled work that’s going abroad. The auto industry, medical device and chemical manufacturing and even research and development jobs are crossing the border to maquiladoras, where the average manufacturing wage is $2.50 an hour, and labor and environmental regulations are either non-existent or not enforced. Many “low-skilled” jobs, such as those in the textile industry, have long since left, as subsequent World Trade Organization and bi-lateral agreements have sent that work where the wages are even lower, such as Central America and Southeast Asia. The TPP includes Vietnam, where independent unions are illegal, and $2.50 is the average daily wage. The job loss, however, hasn’t just affected the US. Subsidized grain exports have displaced more than 2 million Mexican farm workers (fueling immigration and the drug trade) and millions of acres of land have been expropriated for mining and extractive industries.

Part Two, to be published tomorrow, will delve more into the impact of the TPP and talk about what we as citizens can do to stop it.

El Impacto del TPP

Josh Wise, Coalición por el Comercio Justo de Minnesota

Las negociaciones secretas del Acuerdo Estrategico Trans-Pacifico de la Asociacion Economica o, Trans-Pacific Partnership (TPP) han seguido efectuándose por más de cuatro años. Según las afirmaciones dadas por el Representante Comercial de Estados Unidos (USTR), Michael Froman, el TPP sería un acuerdo “de alto nivel” dando pie a la creación de nuevos trabajos y por ende oportunidades laborales. Sin embargo, toda la información que hemos recibido mediante información que se ha filtrado al público (significando un acto de traición por parte de algunos participantes con el propósito de informarnos lo que propone nuestro propio gobierno) indica que el TPP está a punto de convertirse en otra extensión más del mismo proceso fallido de negociaciones de la política del comercio; los cuales han resultado en muchos otros acuerdos que han acelerado la “carrera hacia el abismo” en cuanto de las normas laborales, ambientales y de derechos humanos. Pero esta vez, en una escala mayor.

Los defensores del comercio libre utilizan la teoría de ventaja comparativa del economista David Ricardo como base teórica para la eliminación de las restricciones del comercio. La idea es que, si eliminamos la protección del estado para ciertas industrias, los países tendrían que enfocarse en la producción de artículos que resulten más eficaces, por consiguiente, todo el mundo pagaría precios más bajos para productos y las ganancias resultarían más grandes por la eficiencia. Sin embargo, la realidad es que los acuerdos actuales se alejan del ideal de “libertad comercial”, perdiendo los hilos conductores y yendo más allá del manejo del comercio. Al contrario, se ha introducido una gran cantidad de desregulación y protecciones para los inversionistas (la mayoría de éstos son corporaciones multinacionales), las cuales han limitado la capacidad de los gobiernos para actuar en favor de los intereses públicos en temas como normas laborales, medioambientales y de salud pública. Es cierto que han resultado en grandes ganancias corporativas, pero a la vez se ha venido generando ésta carrera hacia el abismo para los demás, sobretodo teniendo un impacto en el nivel de vida global.

Por qué es así?
En realidad, estos resultados son inevitables considerando como hacemos las negociaciones sobre el comercio. Según la definición oficial de su cargo, el USTR Froman es un diplomático, y, por esta razón puede mantener en secreto el contenido de las negociaciones sobre el comercio. Sin embargo, si alguien pide a la sección ejecutiva del gobierno, puede conseguir el título de “consejero autorizado” para las negociaciones, lo que significa que se puede ver y ejercer influencia sobre las propuestas. El TPP tiene más de 600 de estos “consejeros autorizados” y muchos de ellos representan corporaciones grandes. Además, los tratados internacionales se anteponen a todas las leyes nacionales y locales – dejándonos con un sistema de creación de leyes en el cual los grupos de presión (lobbyists) escriben las leyes detrás de puertas, por tanto, no deberían sorprender. Entonces, los acuerdos finales benefician desproporcionalmente a las mismas corporaciones multinacionales que los escriben.

Cuáles son los resultados?
El Tratado de Libre Comercio de América del Norte (TLCAN) cumplió 20 años de vigencia este año, y por ser el acuerdo con mayor longevidad, tiene la mayor cantidad de datos para analizar. Desde que se estableció el TLCAN, los EEUU han perdido más de 1 millón de puestos de trabajo a sitios extranjeros de salario bajo. Y el trabajo no especializado no es el único que va para el exterior. Trabajo de la industria automóvil, de fabricación medica y química, y hasta investigación y desarrollo sigue cruzando la frontera a las maquiladoras, donde el salario promedio es $2,50 por una hora, y las normas laborales y ambientales o no existen o no se aplican. Mucho más trabajo no especializado, como el de la industria textil, desapareció hace mucho tiempo, porque los acuerdos bilaterales y los de la Organización Mundial del Comercio han controlado éste trabajo hasta donde el salario es aún más bajo, en regiones como Centroamérica y el Sudeste de Asia. El TPP incluye a Vietnam, donde los sindicatos independientes son ilegales y, $2,50 es el salario promedio diario. Entonces, la pérdida del trabajo no es solamente un tema de EEUU; las exportaciones subvencionadas de granos han causado el desplazamiento a más de 2 millones de campesinos y trabajadores mexicanos (contribuyendo a la inmigración y el tráfico de drogas) y millones de acres de tierra han sido expropiados para usos y explotación minera y de industrias extractivas.

La segunda parte de este post se publicará mañana, éste explorará más a fondo el impacto del TPP y discutirá que podremos hacer nosotros como ciudadanos para detenerlo.

The Human Face (and Price) of Trade

The Witness blog series is back!

This month, Witness for Peace, in close collaboration with coalition partners in the United States and partners on the ground in Colombia, Nicaragua, Honduras and Mexico, is hosting our second annual blog series – this one focused on the changing system of international trade and its effects on communities both small and large.

When most people hear the word “trade,” their eyes already start to glaze over, visions of tariffs and collective bargaining agreements dancing in their hands. This is understandable – at first, trade doesn’t exactly seem like the most exciting topic, tied up as it is with broader issues of economics, national sovereignty, imports/exports and labor rights. However, trade has implications that reach far beyond the entrances to ports and meeting halls – really, if you’ve ever bought anything or had a job, trade has affected you in some way. Over the course of the next month, we’ll be using this space on the Witness blog to explore the many ways trade changes lives, livelihoods and environments, from small-scale farmers in the U.S. Midwest to port workers in the Colombian city of Buenaventura.

The topics of free trade, unions, workers’ rights and economic policy have become increasingly important throughout the Americas since the North American Free Trade Agreement (NAFTA) went into effect in 1994, creating a trade bloc between the U.S., Canada and Mexico, and opening the door for subsequent economic policies and practices that prioritized corporations and multinational companies over unions and workers themselves. Since then, such agreements have spread across the region, with the U.S. signing free trade accords with countries including Chile, Peru, Colombia and the majority of Central America.

Though supporters in governments and the business world insist that such agreements help boost competition and encourage sales, the truth is that the few individuals and corporations at the top are those that truly profit, while laborers, farmers and small businesses see few of the benefits and are often left worse off than they were before the agreement took effect. Such agreements lead to lower prices on imported goods that  leave local businesses unable to compete without incurring significant losses; allow much greater influence for multinational corporations; facilitate widespread third-party contracting; and encourage extensive outsourcing in a "race to the bottom." These effects are well-documented, and some communities are refusing to simply accept them as inevitable. Last August, Colombia’s farmers began a national strike that quickly spread across the country and reached the largest cities, primarily as a response to the negative effects the U.S.-Colombia free trade agreement, signed in 2011, had on their communities and their livelihoods.

Well-researched critiques and comprehensive analyses of such agreements are now more important than ever, with the U.S. on the verge of signing the Trans-Pacific Partnership, which would become the most far-reaching trade agreement in the hemisphere and grant a staggering amount of rights and privileges to corporations and business interests, potentially even overriding national sovereignty and laws in some cases. Through this blog series, we will examine the effects and lessons learned from current trade agreements and labor practices throughout the Americas, and hope to shed some light on the potential regional and global impact of the TPP as well as bring more attention to what’s happening in our own backyards and in thousands of other cities and towns across the continents.

Check back here every weekday for bilingual posts highlighting some of the effects free trade agreements and changes in trade and labor policy have had on individuals and communities throughout the Americas, and how some of our writers have seen those changes reflected in their own lives and the lives of others. Feel free to take a look at our 2013 Drug War blog series as well.

Workers of the Americas at Risk: The Cases of Wisconsin, Colombia, and Guatemala

by Carlos Cruz, Colombia Team

The workers of the Americas are facing an all-out attack on their rights and their lives. The recent effort to recall Republican Governor Scott Walker failed and Colombia and Guatemala were ranked numbers one and two on the list of the deadliest countries in the world to exercise labor rights in a recent International Trade Union Confederation annual survey of labor rights. Colombian, Guatemalan and U.S workers all face diminishing unionization rates, an anti-union climate and government policies that systematically chip away at workers’ rights.

Scott Walker, a corporate-backed politician, has been launching an all-out assault on labor in the presidential battleground state of Wisconsin. His policies drew over a million signatures for his recall principally from the labor movement, but grassroots efforts couldn’t stand up to the $30 million from special interests and campaign supporters.

Walker is part of the faction in the U.S. political landscape that portrays labor unions as infringing on corporate profits and driving jobs to countries where labor is cheap and flexible like Colombia and Guatemala, instead of recognizing their role in having brought the American middle class to a prosperous wellbeing. The rate of unionized workers in the U.S. has dropped from 20% of the workforce in 1983 to 11.8% in 2011.

The economic downturn in the U.S. has been used by politicians like Scott Walker to justify efforts to cut public sector workers’ wages and benefits, and to eliminate or restrict their collective bargaining rights. “Working America, firefighters, teachers and nurses - are not responsible for the reckless actions of Wall Street, which led to this crisis in the first place,” said Rep. Elijah Cummings.

The same economic downturn saw the Obama administration pass the Colombia-U.S. Free Trade Agreement in efforts to boost the U.S economy.  As we have already seen in recent history, free trade agreements make labor conditions more precarious for workers throughout the Americas and only serve to truly benefit multinationals that profit off of cheap labor abroad, thus weakening unionized, organized workers in the U.S. What is concerning is that Colombia and Guatemala—both free trade partners with the U.S.— hold the worst record for labor violence. U.S. companies are taking advantage of a hostile labor climate for workers to increase their profits.

Colombia Guatemala and Free Trade

Several serious and repeated failures by the Governments of Colombia and Guatemala to properly address levels of violence and labor rights violations have been brought up to the United States before and after the ratification of their bilateral free trade agreements. It’s been cited that both countries have weak and corrupt institutions and are not able to effectively enforce their own labor laws and international norms nor protect their workforce from violence. The case of Colombia is demonstrative as some 3,000 labor union members have been killed since the 1980’s.

Labor conditions in Colombia and Guatemala have remained unchanged or have worsened since the free trade agreements were ratified. Violations of freedom of association and collective bargaining rights, along with increases in the number of murders and death threats against union members, are rampant in Colombia and Guatemala. Seven members of Guatemala’s largest agricultural union whose products are sold to California-based Del Monte were murdered in 2011.  So far in this year alone, seven Colombian trade unionists have been killed despite the Santos and Obama administrations signing a Labor Action Plan that was intended to reduce violence and labor rights abuses.

U.S. efforts have not been enough to resolve the flagrant human rights’ abuses of its trade partners. Even after Guatemalan unions and the AFL-CIO filed the first Central American Free Trade Agreement labor compliant for threats, illegal firings, abuse and murder, nothing has come about as a result four years after the fact. In Colombia, the now disbanded government security agency that received U.S. funding—DAS—was found to be involved in sending information about a trade union leader to a paramilitary group that ultimately ended in his death in 2009. The governments of Colombia and Guatemala have failed to adequately investigate death threats and murders in almost all cases. There have been mechanisms to address these issues, like labor complaints in the case of Guatemala and the Labor Action Plan in Colombia, but neither have changed the climate of impunity and repression towards workers.

Although workers in the United States do not face death threats and murder like their Colombian and Guatemalan counterparts, there is an array of anti-union tactics used by employers. Union busting consulting firms and an encroaching legal framework, that bans public employees from striking, for example, are limiting labor unions’ capacity to protect workers’ rights. In Colombia and Guatemala, in addition to the physical dangers encountered by labor leaders, a common threat is the subcontracting of workers to circumvent contracts, benefits and—most of all—the formation of labor unions.

Even though labor unions face setbacks and encroaching policies that limit their rights, the bulk of the grassroots efforts to recall Scott Walker in Wisconsin and the staunch opposition to the U.S.-Colombia FTA came from the labor movement in both the U.S and Colombia. The labor movement in Guatemala with support from the U.S. labor movement has been able to highlight and bring international attention to the situation in Guatemala.  In both these international cases, much attention has been brought forward to the international arena, where organisms like the International 

Labor Organization have handed down critical recommendations that have not been accorded the political will by either government to actually bring about the change needed to alter the critical reality of workers’ rights. However the rank and file of these countries along with the U.S. grassroots labor movement will continue to bring these abuses forward to place pressure on governments to meaningfully comply with and fulfill the rule of law that is being denied to many workers throughout the Americas.

Witness for Peace delegation acompanying Port Workers Union during a strike that led to 80 direct contracts.

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Paying the High Price of Gold

By Brooke Denmark
Witness for Peace International Team- Nicaragua

This article originally appeared in the Canadian journal Alternatives International.

It is no secret that gold mines wreak havoc on the environment. Less widely known is the incredible amount of power free trade agreements have granted to gold-mining corporations to cause this damage. The North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), as well as other pacts, include chapters that allow corporations to sue signatory nations for lost profits if a new law, such as an environmental or health regulation, threatens its investment. This is exactly what is happening now in El Salvador. A decision is imminent in the first case of its kind to be heard under CAFTA, Pacific Rim Mining Corp. vs. El Salvador. Anti-mining groups, environmentalists and trade justice activists throughout the Americas are poised for a response from the CAFTA tribunal, which could set a precedent for mega-projects throughout the region.

Pacific Rim, a Canadian-based mining corporation, is suing the government of El Salvador for violating its investor rights under Chapter 10 of CAFTA. The company claims that the government of El Salvador violated its investor rights by failing to issue a permit to begin operations. Since Canada is not a member of CAFTA, Pacific Rim is suing El Salvador under a U.S. subsidiary. The government of El Salvador acted in response to calls from a wide network of civil society groups, including communities potentially affected by the mine, environmentalists and the Catholic church, who rallied together to block the mine. They argued that the mine will contaminate El Salvador’s already limited water supply and cause serious environmental and health issues. Individuals involved in the movement have met violent repression for their opposition and the case is already stained with blood. Four Salvadoran anti-mining activists have been assassinated over the past two years. Those cases remain unresolved.

As Pacific Rim struggles to open its gold mine in El Salvador, another Canadian based company, Goldcorp, is closing up shop in Honduras after over a decade. In the mine’s wake, surrounding communities face chronic health problems and depleted natural resources. The situation is a testament to the kind of destruction the anti-mining movement in El Salvador is fighting to avoid.

The striking jade greens and golden yellows visible in the stream photographed are a result of acid drainage that will last for up 100 years. This is the water that communities near the San Martin mine use daily to bathe and wash laundry. According to a recent report by Honduran human rights leader Dr. Juan Almendares, the Honduran government has documented high levels of arsenic in the blood and urine of children living near the mine. Almendares’ report also shows that the Honduran government dragged its feet in revealing information about the contamination and in doing so, allowed the gold mine to continue harmful operations. Now Almendares and other human rights groups are calling for Goldcorp to pay for the environmental and health problems it left behind.

There are many international actors at play in the corporate web of gold mining. To trace the genealogy of the San Martin mine in Honduras, for example, we begin with Honduran company Entre Mares. Entre Mares used to operate as a subsidiary of Glamis Gold, a formerly Nevada-based gold company which was bought out by Goldcorp in 2006 to form the world’s third largest gold mining company. Three years before merging with Goldcorp, Glamis Gold was entangled in a similar struggle as Pacific Rim.

In 2003 Glamis Gold began a suit against California under NAFTA’s Chapter 11 for $50 million in damages. Glamis Gold brought the case against California after the state denied the corporation the right to construct an open pit mine. California reacted to outcry from environmental and indigenous rights groups arguing that the mine would cause environmental destruction and encroach on sacred sites. In this case, in order to submit a claim under NAFTA, Glamis Gold attempted to file as a Canadian company even though it was based in Nevada at the time. The tenuous nature of this claim is one of the reasons why it failed.

Ultimately, the tribunal ruled in favor of California. While the United States is not immune to being sued by corporations under these free trade agreements, so far it has been on a winning streak. Not all nations and states attempting to block damaging mega-projects have been as lucky. NAFTA tribunals have already awarded over $200 million to investors claiming lost profits. NAFTA’s Chapter 11 provided the model for CAFTA’s Chapter 10 and similar measures in other free trade agreements. Public Citizen calculates that there are currently $12 billion in pending claims under NAFTA-style tribunals related to the environment, health and transportation.

With the price of gold reaching record highs in light of the global financial crisis, gold mining will remain a hot issue. One analyst quoted in a U.S. News and World Report article on gold mining states that “if gold prices continue to remain elevated, then [gold] prices are up, costs either stabilize or go down if the economy weakens further, and that could be a recipe for fat profit margins [for gold mining stocks]." As the gold mining industry stands to further benefit in the coming years, those being poisoned by its deadly practices, such as children living near the San Martin mine, will continue to suffer.

For now, social and environmental justice groups hope that the Pacific Rim decision will fall on the same side as the NAFTA tribunal’s ruling in the Glamis Gold case. A win in El Salvador would show the international community that groups resisting invasion of these mines stand a chance against a Goliath.

All photos taken by Fernando Reyes in Valle Siria, Honduras.

Foreign Direct Invasion: What “Free Trade” means for small producers

By Riahl O'Malley
Witness for Peace International Team - Nicaragua

In Spanish, the verb “invadir” can mean a number of things: to encroach, to overwhelm, or to invade or attack. This is the verb that Maria Selina Valladares, co-founder of a small womens’ sewing cooperative operating out of Somoto, Nicaragua used to describe the role of big producers in Nicaragua under the Dominican Republic - Central American Free Trade Agreement (DR-CAFTA). “Nos invaden,” she told me. “They’re invading us.”

Yesterday Congress passed three new Free Trade Agreements with Panama, Colombia and South Korea, respectively. These agreements follow the same model as DR-CAFTA. By reducing taxes on imports and exports and expanding the ability of companies to set-up abroad they are said to create “a level playing field for U.S. investors.” But since DR-CAFTA came into effect, María Selina has felt anything but level with large multi-national corporations.

Four years ago María Selina was one of 12 women in Nicaragua’s rural town of Somoto who decided to start a sewing cooperative.

“The idea was to generate employment, find the market and export our product abroad, to let them see that we have the capacity to work and to make a good product,” she said.

They received legal council, attended meetings with the Nicaraguan Ministry of Investment, Industry and Business, and even received a government grant to purchase their equipment. So far they have had few opportunities to sell their product. Even people in their own region would rather import than buy their local product, which ends up being more expensive.

“We have to charge the cost of the cloth, the thread, all of the materials plus our labor,” she explained. “We have very strong competition… The products that come from Managua don’t give us the opportunity to work.”

Foreign textile and apparel producers have been on the rise in Nicaragua since DR-CAFTA came into effect. They are said to benefit hugely from the agreement. Under DR-CAFTA, they can import a significant amount of cloth from a cheaper country like China, assemble it in Nicaragua and ship it duty-free to the U.S. in a box labeled “made in Nicaragua.”

It was mostly foreign companies from countries like the U.S. that were included in the negotiations that formed DR-CAFTA, so it is of little surprise that the agreement was designed for their benefit. Meanwhile, those who have little access to the same networks and resource as large multi-national corporations, like María Selina’s sewing cooperative, are, according to María Selina, “completely drowned out.”

Support Jobs and Unions This Labor Day: Three Reasons to Tell Congress to Vote "No" on New Free Trade Agreements

By Christine Goffredo
International Team - Nicaragua

Last week President Obama stated:

“Let’s pass trade deals to level the playing field for our businesses…These are common sense ideas – ideas that have been supported by both Democrats and Republicans. The only thing holding them back is politics…That’s what’s holding this country back. That’s what we have to change.”

There are certainly a lot of issues holding up Congressional approval of trade agreements between the United States and Colombia, Panama, and South Korea. However, approving these agreements is not common sense and it is not what is holding the United States back. In fact, there are many compelling, common sense reasons not to sign these free trade agreements, including potential increases in unemployment, human rights violations against union organizers, and poverty, just to name a few.

Now that Republican and Democratic Senators have come to an agreement on the Trade Adjustment Assistance program, a vote on these free trade agreements is fast approaching. Rallies, letter writing campaigns and call-ins in the last few months by organizations and individuals across the United States sent a clear message to Congress that constituents are unhappy with these agreements. 



Now is the time to increase the pressure and state our position loud and clear. Congress is currently on recess, making this a perfect time to contact your Senators and Representatives in their home states and tell them not to sign these agreements once they return to Washington.

Here is a short list of three more than compelling reasons to tell your Senators and Representatives to honor Labor Day by rejecting more free trade agreements until concrete changes are made to counter these problems.

Continued Violence in Colombia

In the last few weeks, four more union members were assassinated in Colombia, two from a banana workers’ union, highlighting the continued violence against union members and organizers in that country. The trade agreement with Colombia includes a “Labor Action Plan” in which the Colombian government has promised to work to curtail violence and impunity. This is not enough. According to a recent Huffington Post article, half of all unionist murders in the world happen in Colombia. This grave situation does not require commitments for future action; it requires action right now.

Learn from Example: Violence and Intimidation in El Salvador

In 2006, five Central American countries and the Dominican Republic entered into the Central American Free Trade Agreement (CAFTA) with the United States. Lessons should be learned from this free trade agreement, as well as the North American Free Trade Agreement (NAFTA).

One lesson is from a case being heard by a World Bank tribunal in which the Canadian mining corporation Pacific Rim is suing the El Salvadoran government for $77 million in lost revenue for not approving Pacific Rim’s request for exploitation permits. Pacific Rim, using a Nevada-based subsidiary that has not been active in several years in order to fall under CAFTA jurisdiction, is relying on Chapter 10 of CAFTA. This chapter protects foreign investors by allowing them to sue governments that create policy or deny permits that conflict with a company’s “expectations of obtaining earnings…” (see Sister Cities article).

This case threatens the ability of the El Salvadoran government to protect its people from pollutants, the depletion of available water, and agricultural damage. It has also led to increased violence and intimidation in the region. Just this June, Juan Francisco Durán Ayala, a young anti-mining activist from the region, was murdered. His death adds to the three that occurred in 2009 within a six-day period. There have also been reports of death threats and other forms of intimidation against anti-mining activists.

This “foreign investment protection” chapter will be present in all three upcoming free trade agreements. To date, these regulations in NAFTA, CAFTA, and the Peru Free Trade Agreement with the United States have cost countries over $350 million in compensation to corporations. According to Public Citizen, all of these cases have dealt with “attacks on natural resource policies, environmental protection and health and safety measures.” They continue, “in fact, of the over $9.5 billion in pending claims, all relate to environmental, public health and transportation policy – not traditional trade issues.” The negative effects of this legislation for the people and governments of Mexico, Canada, and now El Salvador is clear. It is time to change these policies before Congress passes these new trade agreements.

Lost Jobs

Prior to signing the North American Free Trade Agreement, President Clinton and Congressional leaders promised job creation in the United States and Mexico. 17 years later, over 680,000 net jobs have been lost in the United States alone. Just last month, the Senate cleared the way for enhancing the Trade Adjustment Assistance program, which gives financial assistance to United States workers that lose their jobs as a result of trade agreements with other countries. If it is true that signing more free trade agreements is in the best interest of the United States and will create jobs, why would the Senate be voting to enhance it?

The Economic Policy Institute estimates that trade deals with Korea, Colombia, and Panama will result in a net loss of 214,000 jobs, even taking into account the export jobs that would be created as a result of the agreements. This number is for the United States alone. Colombia, Korea, and Panama, who do not have Trade Adjustment Assistance programs in place, arguably stand to lose just as many if not more jobs—especially given Mexico’s experience with NAFTA.

Learn from Experience: Don’t Pass without Concrete Changes

It is clear from these three examples that the free trade agreements need serious changes. Unfortunately, all three agreements coming to a vote—Colombia, Panama, and Korea—fall under Fast Track passing rules because they were already in negotiation when Fast Track expired. This means that Congress will not be able to make ANY changes to ensure that more jobs are not lost, that more union members are not murdered, and that more communities are not threatened by harmful corporate practices.

Show your support for union members, workers’ rights, and jobs this Labor Day by urging your House Representatives and Senators to vote “no” on these trade agreements. Now is not the time for Congress to hastily pass these agreements. Now is the time to make changes—to make trade just.

Facing the Free Trade Storm: CAFTA and Nicaraguan Families

Claudia Chamorro, a licensed social worker, lost her long-standing job with a local NGO 8 months ago. She lives in Managua with her parents, three siblings and four children. Claudia’s two other sisters and a brother migrated to San Francisco, in search of work in what her sister deems “the land of opportunities, where if people don’t study, it’s simply because they don’t want to.” For years, these siblings have sent back $50 or $100 monthly from the U.S., which the family relies on heavily to meet their basic needs.

In recent months, however, these remittances have all but disappeared. Both her brother and sister received sharp cuts in their working hours at a restaurant in the Bay Area and were unable to send anything for seven months until, finally, $50 arrived in January. Unable to find work and without the much-needed remittances, Claudia is finding herself considering the worst option imaginable to her: making the trip to the U.S. herself.

In the midst of this economic crisis, Claudia and many others like her are stashing away fifty cents here, a dollar there, to purchase a chance at survival – a refrigerator on wheels, a set of juggling balls, or a bus ticket to Costa Rica. As more jobs are lost each month in the deflated global economy and foreign-owned textile factories or maquilas steadily close, countless people have but two options. They can turn to the informal market, selling cold homemade juices from a mobile refrigerator or juggling in the streets, or they can leave their country in search of work in the stronger economies of Costa Rica, Spain, or the U.S. In spite of increasing stories about the difficulties of migrating abroad, more and more Nicaraguans are considering migration their only hope for sustaining their families and their homes.

Meanwhile, those migrants already working abroad, including Claudia’s three siblings, have felt the blow of the economic crisis with unique force. Many living in the U.S. or nearby Costa Rica have either lost their jobs or experienced a serious cut in hours and/or wages. For their families back home in Nicaragua, this loss is tremendous. In 2008, money sent home by migrants made up approximately 13% of Nicaragua’s GDP, a total of $818 million. As these remittances dwindle or disappear, migrants’ families often lose their main source of income.

But the financial impact isn’t the only setback. Migration comes at a great cost to families who, after years of separation, often experience a deterioration of the family unit – a structure central to Nicaraguan life. As Claudia said, “Our family has completely deteriorated. We haven't all been together in 24 years. At one time, we were siblings who knew each other face-to face. Now, we are siblings who know each other only by internet.”

Claudia's family and the difficult choices they face illustrate the vast interconnectedness of the Nicaraguan and the U.S. economies. Within the economic structure imposed by DR-CAFTA (Dominican Republic -Central American Free Trade Agreement), the U.S. economy functions as the heart pumping blood through Nicaragua’s veins. When the U.S. heartbeat slows or stops, the repercussions are felt acutely in Nicaragua. Decreased demand in the U.S. for key Nicaragua exports causes increasing unemployment in Nicaragua, where many find work in free trade zones or export-based agriculture. The economic slow-down in the U.S. also means fewer jobs for migrants living abroad, and therefore a gradual loss of another vital lifeline – the precious remittances sent from afar.

Such heavy dependence on remittances points to an inherently unsustainable economic model, propagated by DR-CAFTA, wherein a country relies on the stability of a foreign market for survival. Furthermore, research shows that in Nicaragua remittances are spent primarily on meeting basic needs. Little is “caught” by the Nicaragua economy and invested in ways that contribute to long-term growth, stability, and relative sustainability. Remittances are only a temporary fix in the struggle against cyclical poverty, punctuated by a dependency on a foreign market.

Since there is little to no protection in free trade agreements such as DR- CAFTA to mitigate the disastrous impact of these agreements on the poor, Nicaraguans feel each financial blow with a new freshness, seeing fewer and fewer options for survival. For many, picking up a juggling ball or mounting a bus to San José remain the only options in sight.

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Take Action

o Pressure your Representatives and Senators to co-sponsor the TRADE Act, a bill that will ensure fair and just trade agreements that meet the goals of broad-based, people-centered development and poverty reduction.

o Contact your WFP Regional Organizer to connect with local migrant communities, immigrant rights organizations and campaigns to stop human rights violations towards migrants en route or already working in the U.S.