Free trade agreements have few beneficiaries

By John Stencel

In December 2003, the Central American Free Trade Agreement or CAFTA was signed by the U.S. trade representative and his trade negotiating counterparts in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. When Congress reconvenes in 2005, it will be asked for a yes or no vote on CAFTA.

Thanks to the fast track authority Congress granted the president, members of Congress cannot alter a trade agreement offered by the U.S. trade representative.

Rocky Mountain Farmers Union is urging a “no” vote on CAFTA. Here’s why:

Despite glowing promises from free trade proponents, trade agreements brokered over the last decade have NOT resulted in higher prices and greater demand for U.S. agricultural products. In fact, the U.S. trade balance in agriculture has dropped from a surplus of $27 billion as recently as 1996 to a projected surplus of just $2.5 billion in 2005. No one disputes that if trends continue, we will, as soon as 2006, import more food than we export.

Not only is reliance on imported foods philosophically offensive to many Americans, it makes us dependent on other countries for something none of us can do without. In addition, the growing U.S. trade deficit is contributing to the devaluation of our currency. U.S. investments are no longer as attractive as they were when our trade deficit was in check.

The value, or dollar per unit paid to the producer, also has dropped. According to U.S. Department of Agriculture Economic Research Service data, from 1996 to 2003, the loss to corn producers has averaged nearly $5 billion annually. The loss for wheat producers has averaged $3.3 billion per year. If this economic data is not enough to make you question the wisdom of free trade agreements, perhaps the impact of these and potential agreements on domestic policy is.

Everyone with any knowledge of Washington politics agrees that trade and the World Trade Organization rules will drive U.S. farm policy.

Is it not time we acknowledge our mistake in thinking that free trade agreements would give farmers and factory workers more opportunities and higher pay, as well as benefit our nation as a whole? The truth is free trade agreements tie the hands of regulators and producers of products, so they are forced to sell their product or labor at increasingly lower rates. The only beneficiaries of such agreements are politicians who feel proud of themselves for brokering big, international “deals” and multi-national corporations because the have fewer and fewer restrictions from implementing the tactics that enable them to push wholesale prices lower and lower. We must stop this race to the bottom.

Sugar, fruit and vegetable producers will be severely harmed if Congress ratifies this treaty. Our sugar beet producers cannot compete with cheap sugar grown in Central America. This will jeopardize the survival of the Sugar Beet Growers Cooperative.

CAFTA is not beneficial for agricultural producers and other workers in both Central America and the United States. It also sets precedence for eliminating protections that, once implemented, will be easier to put into future trade agreements. Please join me in asking your members of Congress to vote “no” on CAFTA.