Open Forum Selling Free Trade in Central America
Edwards, Beatrice
On December 17, 2003, Robert Zoellick, the U.S. Trade Representative, announced that the United States, Guatemala, Honduras, El Salvador and Nicaragua had concluded the Central American Free...
...But wait, says FleishmanHillard...
...And yet, there's more...
...Also, your tax burden is a bit heavier because the government is up the wazoo in debt to the IDB and Citibank (its "live richly" motto notwithstanding...
...To put it crudely, private investors are afraid of pissed-off Indians...
...This approach has not made Plan Puebla-Panama very popular, despite elaborate cosmetic concoctions applied by the IDB in a vain attempt to alter the Plan's otherwise frightening appearance...
...who monitors the multilateral development banks...
...The United States is working to link aid with trade, and to partner with private groups that can promote sustainable development in the CAFTA region," says a grinning Zoellick...
...Through PPP, the IDB is funding projects to "promote activities that foster productive integration and the establishment of networks for small and medium export enterprises...
...According to Carillo, she produces pet soaps and dog shampoos, made from traditional Mayan formulas and ingredients (presumably used to launder traditional Mayan pets...
...Needless to say, both CAFTA and PPP are in for a fight this year, despite the best efforts of Fleishman-Hillard and the IDB...
...Congress as early as this spring...
...The challenge for the PR experts at Fleishman-Hillard is that, no matter what they claim, this is how CAFTA and PPP are really going to work: For the sake of argument, let's suppose that you are one of the fortunate few who actually gets a steady job in, say, an underpants assembly plant between San Salvador and the airport, created as a result of new highways, modernized customs and blossoming Fruit-of-the-Loom investments...
...farm exports and 80% of industrial and consumer exports will enter the region duty-free upon ratification of the treaty...
...State Department itself declared "insufficient to provide a decent standard of living for a worker and a family...
...Now doesn't that work out nicely for everyone...
...Putting this deal over on everybody might just require more than saturated media markets and better brand positioning...
...companies shopping for cheap labor, the agreement is promoted as a chance for Central America to prosper...
...In announcing the agreement, Zoellick pumped its advantage for U.S...
...This might have been almost enough to get by in the old days, but these days your food supply is more expensive because the eggs are from Iowa and the corn is from Nebraska...
...Because the poor in Central America are disproportionately indigenous people, PPP will promote their prosperity through tourism that capitalizes on their colorful costumes and intriguing rituals...
...Mexican President Vicente Fox announced the PPP in September 2000...
...Ever resourceful, the IDB went out and hired the public relations firm Fleishman-Hillard to improve the Plan's image...
...You make minimum wage, so you're hauling in $22 a week...
...This marketing strategy has a checkered history associated with the InterAmerican Development Bank (IDB) and its primary CAFTA building blocks: the various initiatives of Plan Puebla-Panama (PPP...
...Labor unions, which have taken a ten-year hit from NAFTA in both the United States and Mexico, greeted the new trade agreement with dismay...
...In January, after initially holding out, Costa Rica also jumped on board...
...Well, we can see why that would be a tough one...
...The new trade regime was greeted with hearty applause from a large number of beneficiaries who were not, actually, your average Central American...
...In El Salvador, the minimum wage is $4.40 a day, which the U.S...
...The PR tactics-intended to convey that the public's interests, rather than those of big business, will be defended-haven't worked all that well so far...
...And in awarding contracts, Central American governments can no longer provide bidding advantages to their own nationals...
...As of August 2003, the education component of the Plan still had no specified goals, never mind a budget, because, as an IDB operative confessed, the governments were unable to think up a regional educational objective...
...At around the same time, a rapid mobilization eliminated potential PPP funding for a highway through the Pet6n Maya Biosphere Reserve...
...employment or labor rights in Central America...
...After all, the Central American signatories, renowned for some of the highest poverty rates and lowest wages in the hemisphere, will be obliged through the agreement to "effectively enforce their own domestic labor laws," he said...
...On close inspection, however, this scheme will underwrite the development of a market for "catastrophe" insurance...
...CAFTA "yet another job-destroying free trade agreement that will undermine workers' rights here and around the world...
...Even with piecework, overtime and intensive begU.S...
...They were, instead, international banks, energy corporations, road construction firms, paper companies, advertising consultants, golf course designers and beachfront developers...
...The president of the AFL-CIO, John Sweeney, called Beatrice Edwards is a research analyst based in Washington, D.C...
...capital: more than half of Central America-bound U.S...
...This, of course, left no one reassured...
...For example, PPP includes the "Mesoamerican Initiative for the Prevention and Mitigation of Natural Disasters," which one assumes would support earthquake proofing construction measures or at least emergency aid provisions...
...In the United States, a coalition of unions, environmental and women's advocacy groups and other civil society organizations have vowed to fight against ratification of CAFTA, which may turn up in the U.S...
...The disparity in funding between pro-business and pro-people projects is clear in the gross numbers: while over $4 billion will be spent to expand road and highway networks, only $34 million is slated for health care...
...On the labor front, pressure from the National Association of Public Employees and other civil society groups in Costa Rica nearly kept that government out of CAFTA, because, despite what Zoellick claimed, the agreement does not address the problem of inadequate labor laws and limited enforcement...
...The Central American countries will, in effect, open virtually all services-including telecommunications, energy, banking, insurance, transportation and construction-to unfettered U.S...
...Through PPP, the governments are borrowing billions from a financial consortium cobbled together by the IDB to fund the infrastructure needed for high returns on investments made through CAFTA...
...Unfortunately, to help pay the debt your government has sold off its public schools, hospitals, highways, water and power utilities to private operators, thus making education, health care, water and electricity cost more too...
...Similarly, a sizable chunk of the funding for the "Mesoamerican Human Development Initiative" will finance a statistical information system on migration...
...It is lopsided priorities like these that have caused the furor around PPP, and since the Plan needs private money, public anger is a problem...
...Nonetheless, when it is inconvenient to plug CAFTA as a boon to U.S...
...Conservative estimates suggest that 350,000 Honduran children work illegally...
...Honduras, for example, has a (largely un-enforced) minimum daily wage of $3 and mandates a not-very-generous 24-hour rest period every eight days...
...8NMZIA REPORT ON THE AMERICAS 8 NACIA REPORT ON THE AMERICASOPEN FORUM Protestors outside a Tegucigalpa hotel where American officials were negotiating CAFTA...
...These opportunities are, of course, limited: to date only $13 million has been set aside for small businesses in the eight PPP countries...
...The plan was billed as a 25-year, $20 billion, road, energy and communications construction program for the southern Mexican states, Central America and Panama...
...One PPP project has already been repulsed by the Mixtec people of Puebla...
...investment...
...They rejected President Fox's Proyecto Milenium, which was to include a golf course, country club, luxury residential developments and an industrial zone for maquiladoras on what had heretofore been 40 square miles of productive farmland...
...Trade Representative, announced that the United States, Guatemala, Honduras, El Salvador and Nicaragua had concluded the Central American Free Trade Agreement (CAFTA...
...If this holiday innovation takes off in upscale tourist markets, those willing to pay can observe real Injuns for entertainment...
...To prove his point, he personally visited the premises of Shuchil, a small business operating out of the home of Matilde Carillo de Palomo in San Salvador...
...As always, profits may be freely repatriated...
...After all, many Central American products can also enter the United States dutyfree, so long as they don't compete with anything made there...
...For his part, Zoellick assured unions that the treaty will have a limited effect on U.S...
...You could start a small business and export to niche markets in the United States...
...Public workers' unions in the other countries that have signed CAFTA are protesting the privatization and foreign expropriation of their jobs and services...
...and Central ging, you're going to have a hard time making ends meet...
...You used to get this stuff more cheaply, but your local suppliers no longer exist since mega-corporations like Monsanto, Dekalb and Walmart have replaced your entire supply chain...
...As part of PPP, the IDB is promoting a new Mesoamerican vacation phenomenon: "ethnotourism...
...Most of the company's employees are, in fact, traditional Mayan women displaced from the rural areas outside of San Salvador by export agriculture...
...corporations must be treated as if they are local companies...
Vol. 37 • March 2004 • No. 5
