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Tuesday, December 21, 2010

Financial Implications of Free Trade (2) --- CAFTA Signing


1) A further look into the crisis of free trade, which was introduced in 'Financial Implications of Free Trade (1) --- Tariffs'.   Free trade can erode national financial self-sufficiency.   As the gateway of payment through tariffs is dissolved, goods and services can flow through nations as rich milk can flow through a holes in a strainer.   What can be seen in the United States is increasing numbers of immigrant workers competing with blue collar workers with comparatively cheap labor, de-industrialization coupled with the US importing (buying) a significant percentage of food and tools rather than exporting (selling) or producing for itself, and the loss of US national identity corresponding with advancing unification with other nations, can be presented as largely results of the North American Free Trade Agreement (NAFTA).

2) Free trade seems to be another example of advancing globalization, as individual nations are being liquefied, mixed and led by international organizations, such as, the United Nations (UN), the International Monetary Fund (IMF), the various regional unions such as the European Union (EU) and perhaps most influentially, megalithic multinational corporations that are building near-monopolies.

3) While their are profits to free trade, such as the greater accessibility to goods and services, which a nation does not produce themselves, a simultaneous loss from free trade appears to be increasing interdependence, and thus, decreasing self-sufficiency, self-determination and freedom of choice.

4) In 1994, NAFTA, uniting Canada, Mexico and the United States, was signed into being and with it began a gradual descent of the US into economic crisis.   In 2005, DR-CAFTA, the Central American Free Trade Agreement, uniting  Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic was signed into being and has the potential, even in it five years of age, to augment the US crisis spreading from NAFTA.

5) Here is the story of (DR-)CAFTA:

U.S. Congress passes CAFTA with 2 vote House margin

Thursday, July 28, 2005
The U.S. House of Representatives approved the Central American Free Trade Agreement  (CAFTA) early morning Thursday, with a narrow vote of 217 in favor, 215 against. Voting was held open for an hour, 45 minutes past the House's 15-minute voting rule as the President along with other supporters lobbied into the night.
The vote was so close, if one House member changed a "Yea" vote to a "Nay" vote, CAFTA would have failed in a 216-216 tie.

Republican vote breakdown

In tallying the votes, 25 Republicans, mostly from Midwest Corn Belt and Rust Belt states and the Southeast United State's textile industrial belt, broke party line to vote against the measure. Two Republicans were present, but refused to vote.

Democrat and Independent vote breakdown

The Democrats presented a more united front. All but 15 Democrats present voted against the treaty. Independent House members, who usually vote with the Democrats also voted against the measure.
Supporters of the measure include President George W. Bush, Vice President Dick Cheney, U.S. Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez. Opponents included most House Democrats.
The trade agreement already passed the Senate in June. President Bush has said he will sign it into law.


DR-CAFTA encompasses the following components:
  • Services: all public services are to be open to private investment.
  • Investment: governments promise to grant ironclad guarantees to foreign investment.
  • Government procurement: All government purchases must be open to transnational bids.
  • Market access: governments pledge to reduce and eventually to eliminate tariffs and other measures that protect domestic products.
  • Agriculture: duty-free import and elimination of subsidies on agricultural products.
  • Intellectual: privatization of and monopoly over technological know-how.
  • Antidumping rules, subsidies and countervailing rights: governments commit to phase out protectionist barriers in all sectors.
  • Competition policy: the dismantling of national monopolies.
  • Dispute resolution: the right of transnationals to sue countries in private international courts.
  • Environmental protection: the enforcement of environmental laws and improvement of the environment.
  • Labor standards: the enforcement of the International Labor Organization's core labor standards.
  • Transparency: the reduction of government corruption.
  • Test-Data Exclusivity for pharmaceutical corporations
6) Free trade agreements such as NAFTA, CAFTA, EEC (European Economic Community), and OPEC (Asia-Pacific Economic Cooperation) are uniting our world, bringing financial dependence and crisis to some nations and subservience multinational multi-billion dollar corporate domination.   The United States is experiencing a symptoms which may be reasonably traced back free trade --- all the more reason to turn Crisis to Profit.

Thank You.

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