CAFTA: Stepping Stone to the FTAA
By William F. Jasper
The New American, May 17, 2004
Stop the FTAA!

The Central American Free Trade Agreement would extend NAFTA-style regulations to Central America on the road to an FTAA-based supranational government of the Americas.

On February 20, President Bush officially notified Congress that he intends to sign the recently negotiated Central American Free Trade Agreement (CAFTA). That letter of notification started the clock ticking on the president’s so-called fast track trade negotiating authority, which Congress reauthorized in 2002. Under the fast track rules, the president must give Congress a 90-day notice before signing any trade agreement. That means President Bush could sign CAFTA as early as late May, although he could decide to sign at a later date. Once the president signs the agreement and then formally sends it to Congress, the legislators are bound by fast track rules to vote on implementing legislation within 90 legislative days. They may not amend the pact; as with NAFTA and other “free trade” agreements (FTAs), only an up-or-down vote is permitted.

The Bush administration has repeatedly stated that creation of a Free Trade Area of the Americas (FTAA) — encompassing all of North and South America — is one of its top priorities, and CAFTA is viewed as an important stepping stone to that ultimate goal. In its January 16, 2002 press release announcing the official opening of CAFTA negotiations, the Bush White House stated: “This negotiation will complement the United States’ goal of completing the Free Trade Area of the Americas (FTAA) no later than January 2005 by increasing the momentum in the hemisphere toward lowering barriers....”

The big question is: Will the administration and its trade allies — Wall Street’s corporate Insiders and one-world elites — be able to build enough momentum and marshal sufficient political capital to push this project through Congress in an election year in which jobs, outsourcing, record trade deficits and record budget deficits have become key issues? The 10-year record of NAFTA’s broken promises is working against the CAFTA proponents. NAFTA (the North American Free Trade Agreement between Mexico, Canada and the U.S.) has proven disastrous for America, undermining all of our basic resource industries, spurring a massive exodus of U.S. manufacturing plants and jobs, and vastly increasing the influx of illegal aliens into the U.S.

Recently, an even more serious NAFTA threat has become apparent: international tribunals set up under NAFTA have been ruling on U.S. cases, claiming the authority to supersede U.S. court decisions. NAFTA critics (including this magazine) warned about this threat to our national sovereignty and our constitutional protections when NAFTA was debated more than a decade ago. NAFTA proponents scoffed at such concerns; now many of the scoffers are expressing shock at the enormous implications the NAFTA judicial rulings pose to U.S. sovereignty. People are beginning to wonder if similar surprises may be hidden inside the new trade agreements.

Mounting opposition to all FTAs has caused Washington Insiders on both sides of the issue to predict that the White House will not jeopardize Republican seats in Congress by forcing a vote on CAFTA before the November elections. If that turns out to be the case, then the next big question becomes: Will President Bush try to push CAFTA through a special lame-duck session of Congress, as President Clinton did with the World Trade Organization 10 years ago, after the 1994 elections? If he does try a reprise of the Clinton WTO strategy, will the grass-roots opposition be strong enough to overcome a combined White House-Wall Street blitzkrieg?

FTAs: Fraudulent Trade Attacks

U.S. Trade Representative Robert Zoellick completed negotiations with four of the CAFTA parties — El Salvador, Guatemala, Nicaragua and Honduras — in December of last year, following the November Summit of the Americas in Miami. Since then, the administration has added Costa Rica and the Dominican Republic to the CAFTA accord.

“CAFTA will streamline trade; promote investment; slash tariffs on goods; remove barriers to trade in services...,” etc., stated Mr. Zoellick in a December 17, 2003 press release. “Step by step, country by country, region by region,” Zoellick continued, “the United States is opening markets with top-notch, comprehensive FTAs that set the standard.”

But setting the standard for what, except a breakneck “race to the bottom”? The FTAs promoted by the Clinton and Bush administrations have been disasters; they are not Free Trade Agreements, but rather Fraudulent Trade Attacks against America.

In announcing the completed CAFTA negotiations, Zoellick declared: “The United States is committed to opening markets around the world because American farmers, workers, consumers and businesses want to sell our world-class goods and services.”

Zoellick’s statement is a colossal fraud. The debt-strapped, bankrupt countries of Central America are going to buy U.S.-made products? With what? The only cash they’ll have for U.S. goods will come from the IMF, World Bank, Inter-American Development Bank and other multilateral institutions, meaning, ultimately, from the U.S. taxpayer. Alan Tonelson, a Research Fellow at the U.S. Business & Industry Educational Foundation, put the economies of our prospective CAFTA partners in perspective in a recent column. Tonelson writes:
El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica are not only among the world’s poorest countries, they’re among its smallest economies as well. Measured by their ability to buy U.S. products, their combined economic output totaled only $62 billion, according to the latest (2002) data. That’s less than the output of Orlando, Fla. or Bergen County, N.J.

The collective economies of the five Central American CAFTA countries are also half the size of San Diego and Phoenix. And U.S. Trade Representative Robert Zoellick’s decision to tack the Dominican Republic onto CAFTA doesn’t help much. Adding its $23.2 billion economy to the Central American 5 creates a total market still smaller than the economies of the metropolitan areas of Tampa-St. Petersburg, Fla., San Jose, Cal., and St. Louis, Mo. ($87.5 billion, $88.3 billion, and $92.2 billion, respectively).

How in the world can economies this small, filled with people so poor, be important markets for U.S. exports and growth engines for the $10 trillion U.S. economy?

The answer, of course, is that the only things we’ll be exporting to these countries under CAFTA are U.S. jobs, industry, capital — and our children’s future. Many of the factories that moved to Mexico under NAFTA would, under CAFTA, move further south to cheaper labor markets. And the CAFTA countries would act as a U.S.-subsidized, low-cost magnet causing still more businesses to follow the path south, fleeing the U.S. tax and regulatory burden. Like the Clinton administration, the Bush White House puts a rosy glow on the trade picture by citing deceptive statistics. To pump up support for its trade agenda, it claims that U.S. exports to the six CAFTA countries increased by 51 percent 1996 to 2003.

But Alan Tonelson has pointed out that “many of these shipments consisted of fabric sent to Central America for sewing once done in the United States, then returned to America to be sold as final products.”

“Essentially,” notes Tonelson, “U.S. companies are exporting to Central America the materials for garment production work that used to be done in U.S. factories. The results? No new final markets for U.S.-made products, the loss of tens of thousands of working-class American jobs, and higher U.S. trade deficits and international debts. At a time when manufacturing employment is feeble, U.S. debts are nearing alarming levels, and the dollar’s future strength consequently is in doubt, these are the last outcomes America needs.”

Transfer of U.S. Wealth, Sovereignty

The CAFTA accord would be a bad deal even if it were to boost U.S. exports — which it won’t — and thereby help with our horrendous trade deficit. It would still be a bad deal even then because no temporary prosperity it might provide could compensate for the infringements of our national sovereignty that the pact entails. We would be like Esau selling our birthright for a bowl of pottage. The preamble to the massive CAFTA agreement states that the party nations are resolved to “promote regional economic integration.” It states further that they will “contribute to hemispheric integration and provide an impetus toward the establishment of a Free Trade Area of the Americas.”

This “integration” agenda was central to the CAFTA/FTAA campaign from its initial launch at the Miami Summit of the Americas in 1994. Mack McLarty, President Clinton’s chief of staff, noted at the time that “this summit is much broader than [lowering tariffs], and that’s how it should be looked at. This is not a trade summit, it is an overall summit. It will focus on economic integration and convergence.”

McLarty, now president of Kissinger McLarty Associates, is a major player in the Council on Foreign Relations (CFR) and Council of the Americas (COA), two of the organizations that have been most influential in the design and promotion of the FTAA and CAFTA. When McLarty and his fellow CFR/COA globalists talk about “integration and convergence,” they mean full-blown economic, political and social merger. They mean an end to U.S. sovereignty and independence and the subjection of U.S. citizens to the “laws” and administrative dictates of a regional, hemispheric suprastate.

As we have detailed in these pages previously, these one-world architects have repeatedly announced their intentions to follow the model of the European Union (EU) in merging the countries of the Western Hemisphere into a unitary system, with a single currency, and, eventually, a central government enforcing international law as mandated by the United Nations. Each Summit of the Americas has produced Declarations and Plans of Action, all of which are replete with commitments to implement UN treaties, conventions and programs on environment, labor, education, population, health care, transportation, housing, water, agriculture, energy, immigration, terrorism, law enforcement, elections, etc. UN agencies and the UN “family” of multilateral lending agencies — IMF, World Bank and Inter-American Development Bank (IDB) — have been given a lead role in the CAFTA/FTAA process.

The governments of Central America have been bribed into signing on to the CAFTA agreement with an avalanche of financial incentives from the U.S. government and the multilateral banks. The U.S. Department of Labor, U.S. Environmental Protection Agency, USAID and other U.S. agencies, along with the World Bank and IDB, have been pouring tens of millions of dollars into “Trade Capacity Building Initiatives” for Central America. All of which is facilitating the convergence of our legal system and regulatory agencies into the new EU-type governing framework: transgovernmentalism.

“Transgovernmentalism is emerging as the real new world order, rapidly becoming the most widespread and effective mode of international governance,” Harvard Professor Anne-Marie Slaughter (CFR) approvingly proclaimed in “The Real New World Order,” her 1997 essay for the CFR journal Foreign Affairs. “The state is not disappearing,” she noted, “it is disaggregating into its separate, functionally distinct parts. These parts — courts, regulatory agencies, executives, and even legislatures — are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order.”

Dr. Slaughter is correct about one thing: the “state is not disappearing.” But should she and her fellow CFR members succeed, the nation-states will become empty political shells, with real sovereignty shifting to regional governments — on the road to world government.

New Level of Judicial Tyranny

Professor Slaughter is particularly enthusiastic about the potential for transgovernmentalism through the Organization of Supreme Courts of the Americas (OSCA) which was launched in 1995 as part of the NAFTA/CAFTA/FTAA process. Over the past few years, federal court rulings on homosexuality, abortion, public prayer and religious displays, the Pledge of Allegiance and the Ten Commandments have demonstrated the increasing arrogance of the federal judiciary and the need for Congress to exercise its constitutional authority to stop judicial usurpation. But if Congress has been remiss in its duty to curtail federal court abuses (as it most certainly has been), how likely is it to stand up to usurpations by international courts? This is no longer a mere speculative issue; NAFTA tribunals have made this a very real, live threat.

In an April 18 story entitled “Nafta Tribunals Stir U.S. Worries,” the New York Times reported:
After the highest court in Massachusetts ruled against a Canadian real estate company and after the United States Supreme Court declined to hear its appeal, the company’s day in court was over. Or so thought Chief Justice Margaret H. Marshall of the Massachusetts court, until she learned of yet another layer of judicial review, by an international tribunal. “I was at a dinner party,” Chief Justice Marshall said in a recent telephone interview. “To say I was surprised to hear that a judgment of this court was being subjected to further review would be an understatement.”

Tribunals like the one that ruled on the Massachusetts case were created by the North American Free Trade Agreement, and they have heard two challenges to American court judgments.

The Times piece provided several expert opinions on the revolutionary nature of this development. “This is the biggest threat to United States judicial independence that [few people have] heard of and even fewer people understand,” said John D. Echeverria, a law professor at Georgetown University.

“It’s basically been under the radar screen,” Peter Spiro, a law professor at Hofstra University, said. “But it points to a fundamental reorientation of our constitutional system. You have an international tribunal essentially reviewing American court judgments.” It should be noted that Professor Spiro did not express opposition to this “reorientation”; indeed, as noted in our story on page 25, Dr. Spiro has been one of the leading advocates of this subversive process.

According to the Times story, “The part of NAFTA that created the tribunals, known as Chapter 11, received no consideration when it was passed in 1993.” Not true; this magazine warned precisely of the threat posed by the Chapter 11 tribunals, as did other NAFTA opponents. The Times is providing cover for members of Congress who ignored this danger and voted for the agreement anyway. A prime recipient of this favorable Times treatment is Senator John Kerry. “When we debated NAFTA,” the Times quoted Kerry as saying, “not a single word was uttered in discussing Chapter 11. Why? Because we didn’t know how this provision would play out. No one really knew just how high the stakes would get.”

Senator Kerry, like other members of Congress who voted for NAFTA, is hoping that a plea of ignorance will exculpate him from charges of selling out U.S. sovereignty. But ignorance is no excuse. All of those who voted for NAFTA must be held accountable for this emerging threat to our sovereignty and independence. Any who claim to be genuinely alarmed at this supposedly unforeseen assault on our constitutional system should be made to prove it by sponsoring legislation to terminate U.S. membership in NAFTA and by opposing CAFTA, FTAA and all other Fraudulent Trade Attacks against America.

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