Central American Free Trade Agreement Research Articles

CAFTA and U.S. Sugar

The Central American Free Trade Agreement (CAFTA) is a trade agreement between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. The agreement was put into law in 2005. Under the agreement the Dominican Republic will eliminate their sugar tariffs over a 15-year period. The United States will establish additional tariff rate quotas (TRQs) for the CAFTA countries beginning with an additional 107,000 metric tons in the first year. The quota amount increases to 151,140 metric tons by the end of the 15-year period. The United States is allowed to compensate exporters in an effort to limit sugar imports for stock management purposes. How large of an impact will CAFTA have on U.S. sugar producers? This document is FE578, one of a series of the Food and Resource Economics Department, UF/IFAS Extension. Original publication date January 2006.

Historias de migrantes y sus razones para la emigración: guatemaltecos en movimiento

Este estudio instrumental de caso único está diseñado para conocer los motivos que tienen los migrantes para emigrar, en el marco de los desafíos y las oportunidades existentes en Guatemala, su país de procedencia. Se entrevistó a ocho emigrantes (dos mujeres y seis hombres) para comprender mejor sus experiencias personales y también para analizar el papel que tienen la Agencia de los Estados Unidos para el Desarrollo Internacional (USAID, por sus siglas en inglés), el Tratado de Libre Comercio entre Estados Unidos y Centroamérica (CAFTA, por sus siglas en inglés) y las condiciones internas de Guatemala en las decisiones que tomaron los participantes de emigrar a los EE.UU. El estudio estuvo guiado por las siguientes preguntas centrales: (1) ¿Cómo explican los emigrantes sus razones para salir de su país? (2) ¿De qué manera las condiciones internas de Guatemala motivan la emigración? (3) Y ¿de qué manera se relacionan estas razones con las políticas de los EE. UU., si están relacionadas? Los datos se obtuvieron de varias fuentes. Las publicaciones sobre la historia de Guatemala y las inversiones e impactos actuales del USAID ayudan a comprender el contexto que existe en Guatemala por el que ocurre la emigración, asimismo, las entrevistas con los emigrantes en los EE.UU. y Guatemala proporcionan datos sobre las experiencias personales en cuanto a la emigración. Los principales resultados obtenidos fueron que las grandes dificultades económicas y la falta de oportunidades fueron las razones por las que los emigrantes decidieron irse a los EE.UU. Ninguno de los participantes, salvo uno de ellos, recibió asistencia y esta no influyó en la decisión de emigrar de dicha persona. La mitad de los participantes indicó que no hubiese emigrado si los programas de desarrollo les hubieran ofrecido oportunidades educativas y laborales.

Historias de migrantes y sus razones para la emigración: guatemaltecos en movimiento

Este estudio instrumental de caso único está diseñado para conocer los motivos que tienen los migrantes para emigrar, en el marco de los desafíos y las oportunidades existentes en Guatemala, su país de procedencia. Se entrevistó a ocho emigrantes (dos mujeres y seis hombres) para comprender mejor sus experiencias personales y también para analizar el papel que tienen la Agencia de los Estados Unidos para el Desarrollo Internacional (USAID, por sus siglas en inglés), el Tratado de Libre Comercio entre Estados Unidos y Centroamérica (CAFTA, por sus siglas en inglés) y las condiciones internas de Guatemala en las decisiones que tomaron los participantes de emigrar a los EE.UU. El estudio estuvo guiado por las siguientes preguntas centrales: (1) ¿Cómo explican los emigrantes sus razones para salir de su país? (2) ¿De qué manera las condiciones internas de Guatemala motivan la emigración? (3) Y ¿de qué manera se relacionan estas razones con las políticas de los EE. UU., si están relacionadas? Los datos se obtuvieron de varias fuentes. Las publicaciones sobre la historia de Guatemala y las inversiones e impactos actuales del USAID ayudan a comprender el contexto que existe en Guatemala por el que ocurre la emigración, asimismo, las entrevistas con los emigrantes en los EE.UU. y Guatemala proporcionan datos sobre las experiencias personales en cuanto a la emigración. Los principales resultados obtenidos fueron que las grandes dificultades económicas y la falta de oportunidades fueron las razones por las que los emigrantes decidieron irse a los EE.UU. Ninguno de los participantes, salvo uno de ellos, recibió asistencia y esta no influyó en la decisión de emigrar de dicha persona. La mitad de los participantes indicó que no hubiese emigrado si los programas de desarrollo les hubieran ofrecido oportunidades educativas y laborales.

The Dominican Republic–Central American Free Trade Agreement’s Symbolic Nod to Environmental Protection: Legal Perspectives on the Citizen Submission Process

ABSTRACTThe Dominican Republic–Central America Free Trade Agreement (CAFTA) contains a chapter on the environment, ostensibly included to mitigate the North American Free Trade Agreement (NAFTA) environmental oversights. The environment chapter created a citizen submission process designed to foster public participation in supporting each participating nation’s environmental laws. This article examines the outcomes to date of the citizen submission process, based on an analysis of the articles of the agreement and an examination of the rulings made on each case submitted under the citizen submission process. The analysis shows that CAFTA poses significant obstacles to citizen participation and has made minimal, if any, contributions to environmental law enforcement among the Parties to the agreement.

Impact of FDI and trade on environmental quality in the CAFTA-DR region

ABSTRACTThis study investigates the relationship between foreign direct investment (FDI), trade and industrial emissions in member countries of the Central American Free Trade Agreement–Dominican Republic (CAFTA-DR) between 1979 and 2010. Our model is based on extant literature about the Environmental Kuznets’ Curve framework. In this study, we consider sulphur dioxide (SO2), nitrogen oxides (NOx) and carbon dioxide (CO2) as our dependent variables. Our key independent variables are FDI and trade. Our study finds evidence that foreign investment and trade have had a negative impact on our selected emissions. However, our models also estimate turning points which are below the current GDP per capita values for all CAFTA-DR member countries. This is an encouraging trend in terms of the potential reduction in emissions in the region.

Diffusion Through Issue Linkage: Environmental Norms in US Trade Agreements

How do environmental norms and policies diffuse across borders? In this article, we argue that preferential trade agreements (PTAs) can play an important role in this process. Specifically, we argue that the US has long used PTAs as mechanisms to diffuse such norms, and show this through an empirical examination of three US PTAs, each from a distinct phase of US trade policy. We demonstrate how the US used the North American Free Trade Agreement, the Central American Free Trade Agreement, and the US-Peru Trade Promotion Agreement as vehicles to diffuse norms of (1) public participation in environmental policy-making, and (2) effective enforcement of environmental laws to trading partner nations. In doing so, we both illuminate a new mechanism of environmental norm diffusion and demonstrate the importance of this mechanism in changing environmental policy and practice across borders.

Beyond inclusiveness: institutions, cooperation and rural development

Development studies emphasise the critical role of institutions in generating conditions for economic growth and shared prosperity, categorising them as either inclusive (development-promoting) or extractive (development-inhibiting). This article demonstrates that trade barriers led a multinational corporation to cooperate with small-scale dairy farmers, facilitating successful rural development. Moreover, the inclusive dairy association that evolved as a result is helping farmers respond to recent trade liberalisation under the Central American Free Trade Agreement (CAFTA). Thus, categorising institutions a priori as inclusive or extractive neglects the fact that institutions are constrained and enabled by others in their environment, and obscures the mediation of power relations among social actors.

Regional trade agreements and export competitiveness: the uncertain path of Nicaragua’s apparel exports under CAFTA

The Central American Free Trade Agreement (CAFTA) has been a mixed blessing for economic development. While exports to the US economy have increased, dependency may hinder economic growth if countries do not diversify or upgrade before temporary provisions expire. This article evaluates the impact of the temporary Tariff Preference Levels (TPLs) granted to Nicaragua under CAFTA and the consequences of TPL expiration. Using trade statistics, country- and firm-level data from Nicaragua’s National Free Zones Commission (CNZF) and data from field research, we estimate Nicaragua’s apparel sector will contract as much as 30–40% after TPLs expire. Our analysis underscores how rules of origin and firm nationality affect where and how companies do business, and in so doing, often constrain sustainable export growth.

Report: US policy in Honduras causes migration

The delegation’s report is unusually critical of US foreign and immigration policies a return in some ways to labour condemnation of US intervention during the civil wars in Central America INTERNATIONAL union rights Page 25 Volume 22 Issue 1 2015 Although the report doesn’t mention it, the head of the dockers’ union, Victor Crespo, was forced to flee Honduras after his father was killed and mother injured, and he himself received threats to his life. A support campaign by the US International Longshore and Warehouse Union helped save his life, and eventually won guarantees that allowed his safe return to Honduras. The AFL-CIO report condemns a plan to ‘reduce the wage bill’ in the public sector by cutting jobs and privatising public services, especially in electricity. It points out that this reflects the policies of the International Monetary Fund, which called for cutting the public sector from 7.5 percent of GDP to 2 percent in four years. The resulting job loss has a clear impact on increasing poverty, forcing many Hondurans to migrate in search of survival. The report makes the case that poverty in Honduras has been deepened by the impact of the Central American Free Trade Agreement: ‘today, Honduras is the most unequal country in Latin America’. Poverty rose from 60 to 64.5 percent from 2006 to 2013. By emphasising a policy that deregulated business and used low wages as an incentive to attract foreign investment, ‘CAFTA only exacerbated the desperation and instability in Honduras’, it charges. ‘Honduran workers identified the 2009 Honduran coup d’état and the subsequent militarisation of Honduran society, and the implementation of CAFTA and its impact on decent work and labour rights, as two essential elements to understanding the current crisis’. Backing up the increasing militarisation of Honduran society is US military aid, which reached $27 million in 2012. The report notes that both Assistant Secretary of State William Brownfield and Commander John Kelly of the United States Southern Command praised Honduran ‘advances in security’. In the US media, General Kelly has demonised migration from Central America, calling the movement of families and children a national security threat and a ‘crime-terror convergence’. That migration, described in the AFL-CIO report, has grown sharply. More than 18,000 unaccompanied Honduran children arrived in the United States in 2014 alone. ‘In 1990, there were approximately 109,000 Honduran migrants in the world. In 2010, that number grew close to 523,000, with the vast majority living in the United States’, it says. ‘Today, migration is seen by many families as a means to escape violence or seek employment opportunity or reunite with family, while the government has embraced the remittances from migrants as a major economic resource’. Three quarters of those migrants, arriving in the I n the wake of the political crisis in the United States last year, caused by the migration of large numbers of children from Central America to the US/Mexico border, the AFL-CIO in November sent a delegation to Honduras, the country that sent the greatest number of unaccompanied minors. ‘What we witnessed’, reported Tefere Gebre AFL-CIO Executive Vice President, ‘was the intersection of our corporate-dominated trade policies with our broken immigration system, contributing to a state that fails workers and their families and forces them to live in fear’. The report, in fact, contains a frank assessment of the history of US foreign policy in Honduras, and draws out the disastrous consequences it has created in that country today. ‘The fate of Honduras long has been tied to that of the United States’, it charges. ‘Throughout the 20th century, Honduras was key to maintaining US military and economic interests on the isthmus. The US military intervened in Honduran politics throughout the early 20th century to protect the foreign investments of large US corporations like the United Fruit Co. Later, Honduras served as a base of operations during the US-supported 1954 coup in Guatemala, as well as the 1961 Bay of Pigs invasion, and during the years of civil war and Cold War proxy wars in Central America in the 1970s and ‘80s, the government provided support for the ‘Contra...

Evaluation of the International Investment Laws in U.S.A and the Impact

This paper evaluates the international investment law in USA and the impact in international trade and international policies which developed after World War II. This paper discuss the OECD convention which led to the project in OECD council on the protection of foreign ownership. The main purpose of this paper is to analyze bilateral treaties in Central American Free Trade Agreement(CAFTA), its impact on investment on United States.

Estrategias de mercado para el frijol centroamericano.

En los últimos años, el sub-sector de frijol en CentroAmérica ha sido testigo de varios cambios dinámicos. Si nose encuentran medidas para incrementar la competitividad regionalde este sub-sector, los países centroamericanos experimentaránimpactos negativos en las áreas sociales y económicasde considerable magnitud, especialmente ahora queCentro América necesita ajustar su economía a los nuevos requerimientosde mercados mas abiertos, como el TratadoCentroamericano de Libre Comercio con USA (TLC). Vendedoresde frijoles a nivel intermediario y de consumo final, asícomo técnicos de oficinas gubernamentales dedicadas al mercadeode frijoles en Centro América fueron entrevistados paradocumentar los cambios experimentados, identificar losobstáculos que frenan la viabilidad del sub-sector e identificarlas oportunidades de incremento de mercados en el futuropara los productores y vendedores de frijol. Los resultadosmuestran que para que continúen siendo competitivos, lospaíses centroamericanos deben incrementar la productividada través del apoyo a las investigaciones para el mejoramientode variedades de frijol, especialmente aquellas que los consumidoresprefieren por características específicas (e.g. color).También es imprescindible el fortalecimiento de los programasde distribución de variedades mejoradas a los productores;las mejoras en la transmisión de información de mercadoa los productores; el fortalecimiento de los contactos entreproductores, comercializadores a nivel mayorista y supermercados;y una política más específica de apertura de mercadosde exportación, especialmente con los Estados Unidos.

“Life Is Not for Sale!”: Confronting Free Trade and Intellectual Property in Costa Rica

ABSTRACT Expansion of intellectual property rights (IPR) regimes has been achieved in part through bilateral free‐trade agreements. This process, however, has not gone uncontested. Drawing on ethnographic fieldwork in Costa Rica, in this article I examine a conflict over IPR in the context of a social movement against the Central American Free Trade Agreement (CAFTA). I focus specifically on reforms that have set the stage for the private appropriation of biodiversity, plant varieties, and other biological materials. Environmentalists have struggled against these reforms since the mid‐1990s, and during the confrontation over CAFTA they positioned “defense of life itself” as a key issue for the social movement. Activists challenged the legal constitution of seeds, biodiversity, and other biological materials as objects of IPR by ideologically situating life outside of commodity exchange and as part of the collective property of the nation.

Privately public seeds: competing visions of property, personhood, and democracy in Costa Rica's entry into CAFTA and the Union for Plant Variety Protection (UPOV)

Costa Rica's entry into the Central American Free Trade Agreement (CAFTA) was hotly contested and the subject of a national referendum. For activists opposing the treaty, questions of 'privatizing seeds' through imposing intellectual property rights were among the main concerns raised by the treaty, as one requirement of CAFTA was signing the international Convention on Plant Variety Protection known as UPOV. The threat to farmers' seeds in Costa Rica and many other parts of the world is more complicated than being a clear-cut issue of privatization. Struggles for control over seeds are a crucial part of the political economy of agriculture that are grounded in debates over the significance of the physical and social properties of seeds as a natural resource. This article explores how debates over intellectual property rights to seeds confound simple distinctions between public domain and private property, and the implications for agricultural genetic diversity. Moreover, through the story of Costa Rica's engagement with CAFTA and UPOV, I contemplate the broader effects of the free trade paradigm on reconfiguring ideas not only of property but also of personhood and democracy. I will argue that through reconfiguring the boundary between the public domain and private property in the realm of seeds, recent intellectual property trends also reinscribe the definition of farmers along pre-defined class lines. Through their actions, groups involved offer competing visions of how a local resource should be defined and internationally connected; these visions can be understood as competing visions of political ecology in practice.Keywords: Costa Rica, CAFTA, UPOV, intellectual property, seeds

DR-CAFTA: An Impact Analysis Thus Far

The signing of the Central American Free Trade Agreement (CAFTA) and its subsequent implementation in 2006 by El Salvador, Guatemala, Honduras, Nicaragua, and the United States, with Costa Rica and the Dominican Republic entering the agreement in 2009, renaming it the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), continued trade liberalization trends in Latin America. Economists, scholars, and politicians alike view NAFTA and DR-CAFTA as a movement towards an even more ambitious Free Trade Agreement of the Americas (FTAA) and economic integration of the region from Canada to the southern cone. The present study does not discuss NAFTA or FTAA in detail, but rather elucidates the impact DR-CAFTA has had on member nations since their respective entrance. The study does so by first examining historical, economic, and political context and forces in Latin America. Second, DR-CAFTA its stipulations and arguments for and against the agreement are discussed. Next, regression analyses shed light on the impact of DR-CAFTA on trade and GDP growth in participating countries. Finally, future consequences of DR-CAFTA are elaborated.

The People, Not the Movement

The social mobilization against the Central American Free Trade Agreement (CAFTA) in Costa Rica between 2002 and 2007 was the strongest of any nation associated with the treaty. The popular opposition was able to delay for years and nearly stop its ratification. It did so by amassing support from the public at large and, in preparation for a national referendum, adopting a strategy of complete decentralization and horizontal, voluntary work at the grassroots level. This strategy ultimately led to a loss of the battle against the agreement, but it avoided costly clashes over leadership and forced the Costa Rican government to become more open and transparent vis-à-vis the popular organizations and the public.La movilización social costarricense contra el CAFTA entre 2002 y 2007 fue la más contundente en cualquier país asociado al tratado. La oposición popular logró detener el proyecto por varios años y casi evita su ratificación. Su éxito se basó en el apoyo general del público y, en preparación para un referendo nacional, la adopción de una estrategia descentralizada y horizontal fundamentada en el voluntariado de grupos de base. Esta estrategia finalmente resultó en la pérdida de la batalla contra el tratado, pero evitó costosas desavenencias en torno al liderazgo y obligó al gobierno costarricense a abrirse y dar cuentas más transparentes a las organizaciones populares y el público en general.

Geoeconomic Assumptions, Insecurity, and ‘Free’ Trade in Central America

The Central American Free Trade Agreement (CAFTA) exemplifies interconnections and contradictions between geopolitical and geoeconomic agendas, including security, democracy, and resource marketing. Central American sovereignty is selectively weakened as states are increasingly dependent on the US and must synchronise governance with the expectations of their most important trade partner or risk becoming defendants in international tribunals. Salvadoran and Costa Rican governments have been accused of upholding environmental regulations that impede the profit-earning of multinational corporations, while the Guatemalan state was charged with violating domestic labour laws. Nevertheless, criminal behaviour and impunity are widespread across the region and seldom provoke US action. Five years after CAFTA's implementation, there is evidence of the erosion of democracy, repression of civil society, and uneven distribution of trade costs and benefits. These results have led some analysts to conclude CAFTA must be renegotiated, while others recommend human and labour rights protocols accompany free trade agreements.

Seeds of kin, kin of seeds: The commodification of organic seeds and social relations in Costa Rica and Latvia

This article employs multi-sited ethnography as a tool to explore the relationships among farmer seed exchange practices, intellectual property rights legislation, and biodiversity. Specifically, it investigates these issues in the historically, ecologically and culturally diverse contexts of the Costa Rican and Latvian organic agriculture movements, as these small countries negotiate their places in the economic trading blocs of the Central American Free Trade Agreement (CAFTA) and the European Union (EU), respectively. The juxtaposition of two such different cases reveals the micro-processes whereby the imposition of intellectual property rights on seeds replaces the centrality of social kin networks through which seeds are exchanged with bureaucratic transactions. This shift from exchanging seeds among kin to tracing the genetic lineage of seeds is part of a global process of commodification and control of seeds. Increasing efforts to “harmonize” intellectual property rights on seeds and plant varieties throughout the world will have profound impacts on food production, small farmer livelihoods and social networks, and agricultural biodiversity.

The United States-Dominican Republic-Central American Free Trade Agreement and Access to Medicines in Costa Rica: A Human Rights Impact Assessment

This article examines methodologies for human rights impact assessments (HRIAs) of trade agreements through a discussion of a recent assessment of the impact of the United States–Dominican Republic–Central American Free Trade Agreement (CAFTA) on access to medicines in Costa Rica. The article identifies the methodology for undertaking the assessment and discusses the ways in which adopting a human rights framework for impact assessment requires certain modifications to existing impact assessment methodologies. The article then examines some of the benefits in adopting such a framework as a means of analysing the impact of trade agreements as well as some of the political and technical challenges facing HRIAs. The article concludes with a call for more professional attention to HRIAs of trade agreements through the development of guiding principles, and for the commission of more HRIAs. The article also suggests that the mainstreaming of human rights in other impact assessment methodologies such as social impact assessments (SIAs) might also be considered.

Changing drug markets under new intellectual property regimes: the view from Central America.

The intellectual property rules inscribed in the Central American Free Trade Agreement have generated concern about access to medicines. We examined the implementation of the new intellectual property regime by tracking the policies and practices in place across 4 Central American countries. Although all 4 were responding to the same requirements under the agreement, their implementation of intellectual property rules differed. Not only were institutional practices different, but the lists of drugs to which intellectual property protection was applied varied in both volume and content. We also found that even without the influence of intellectual property, drug pricing in the region was often unpredictable and that lower cost was not the only motivation driving governments' purchasing decisions.

Does Agricultural Trade Liberalization Reduce Rural Welfare in Less Developed Countries? The Case of CAFTA

AbstractFindings from aggregate economy‐wide models suggest that removing tariffs on agricultural imports is detrimental to rural welfare in less developed countries. This paper explores the rural welfare effects of agricultural trade liberalization called for under the Central American Free Trade Agreement (CAFTA), using a disaggregated rural economy‐wide model nesting a series of agricultural household models. Lower tariffs reduce nominal incomes for nearly all rural household groups in El Salvador, Guatemala, Honduras and Nicaragua. However, they also lower consumption costs substantially. The net effect on rural households' welfare is positive in most cases, implying that pre‐CAFTA agricultural protection policies are disadvantageous for most rural household groups.