Cafta
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CAFTA
CAFTA is a proposed international free trade agreement between the United States and numerous countries within Central America. Some of the nations who could potentially participate in this treaty are Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. This proposed agreement stems primarily from the fact the United States relies on Central America as a primary export market. In fact, it is believed this area of world is Americas 18th largest export target. Another contributing factor to the proposed agreement comes from what is believed to be an unfair trade policy. During the presidency of Ronald Reagan, Central American countries had many tariffs slashed under what is known as the Caribbean Basin Initiative. This initiative allowed around 74% of all exports to America to arrive duty free. Meanwhile, U.S. goods entering their region faced of much deeper import duty of roughly 10%. All in all, the U.S. government believes this act will solidify democracy and level the playing field for future products produced by the United States.
From the very beginning, The United States has gone to great lengths to express the upside to altering this existing policy. The country takes the stand that this will benefit both parties by allowing greater access to the U.S. market. The U.S. has also continually used the North American Free Trade Agreement (NAFTA) as a model for the policies potential success. Current government leaders contend CAFTA will benefit all American consumers buy opening up a broader spectrum of trade. They also believe putting this policy into action will promote a more modern concept of trade in Central America, allowing the region to continue in economic development and democratic governance.
Perhaps the biggest benefit occurring from CAFTA would be the eventual promoting of U.S. exports. Opening this trade agreement would broaden the spectrum in which U.S. goods are bought and sold. This of course would widen the market allowing for a stronger American economy as a result of a bigger consumer base. Furthermore, a bigger consumer base overseas creates a direct result of a need for more production here at home. In the simplest of terms, that means more jobs here there for creating a stronger economy. Besides all the numbers and economic figures, America also benefits by spreading the philosophies of democracy. The United States has always been and always will be on a mission to spread democracy throughout the world. By having nations worldwide adopt such programs as free trade, they also are more likely to convert into a democratic government.
The United States also takes the position that a free trade agreement will help introduce Central America into the modern world. Many countries south of the border still relay heavily on small farms and independent growers for much of the nations fiscal identity. The U.S. stands firm in the belief CAFTA would allow Central America to adapt to a more modernized economic system, which would in turn create growth and prosperity for the countries and their respective people. It is our government’s belief CAFTA would create stability in an otherwise up and down area of the world. Going off the belief that our economic system is a cycle highly dependent on cooperation from other nations, this means nothing but positives for all involved.
It is the solid belief of the U.S. government that the key to economic growth and financial gain through world trade is open markets and transparency. According to the United States, a free trade agreement breaking down barriers and widening the trade field will allow for permanent gains and growth for all nations involved.
Despite these points put forth by the U.S., there still exist a strong and valid opposition to the proposed CAFTA agreement. It is a solid belief that a free trade agreement will swallow up and destroy the back bone of most agricultural nations. This of course is the countless farmers, laborers, and growers, which help to supply the countries widest varieties of exports. It is also argued it would have disastrous effects on small farmers and immigrant communities here in the United States.
Contenders of CAFTA argue that free trade does nothing