The U.S.-Central American Free Trade Agreement (CAFTA).
The U.S.-Central American Free Trade Agreement(CAFTA) is a trade
agreement that is being negotiated between the United States and five
Central American countries: Costa Rica, El Salvador, Guatemala,
Honduras, and Nicaragua. "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. CAFTA
will simplify trade; promote investment; slash tariffs on goods;
remove barriers to trade in services; provide advanced intellectual
property protections; promote regulatory transparency; strengthen
labor and environmental conditions; and, provide an effective system
to settle disputes," said U.S. Trade Representative Robert E.
Zoellick. [i]
CAFTA's provisions will go into effect immediately. One such provision
stipulates that 80 percent of U.S. consumer and industrial goods to
enter the CAFTA zone will be duty free.[ii] Tariffs on the remaining
20 percent will be phased out over the next 10 years. More than half
of U.S. farm exports will also be duty free. Textiles and apparel will
be duty free depending on whether they meet the Agreement's rule of
origin, which indicates that goods can originatein Canada, Mexico, or
the United States, even if they contain non-originating materials, as
long as the materials satisfy the rules of origin specified in Annex
401 of the Agreement.[iii] CAFTA will also provide access for partner
nations to telecommunication services and the sharing of technology
with the U.S. An important section of the CAFTA deals with protecting
worker's rights and standardizing environmental behavior in Central
America. Finally, stro...
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...ary 23, 2004.
http://www.ccra-adrc.gc.ca/tax/business/smallbusiness/c124-e.html#Rules_of_Origin_Purpose
[iv] Conference Draws Central American, Bank Officials To Discuss
Opportunities Of Cafta. DevNews Media Center. Retrieved: February 22,
2004.
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20162687~menuPK:34463~pagePK:64003015~piPK:64003012~theSitePK:4607,00.html
[v] McElhinny, Vincent. U.S.-Central American Free Trade Agreement:
Leaping Without Looking? Retreived: February 22, 2004.
http://www.americaspolicy.org/commentary/2003/0301cafta.html
[vi] CAFTA! NAFTA for Central America. El Salvador Watch. Retrieved
February 23, 2004:
http://www.cispes.org/english/Newsletter/archives/april02.html
[vii] Brown, Sherrod. 'CAFTA': The New Word for Bad Trade Policies.
Retreived February 23, 2004.
http://www.house.gov/sherrodbrown/cafta.html
US primary concern in Latin America was to maintain political stability in order to protect ourselves as well as our business and trade interests. To accomplish this, the Monroe doctrine was expanded to include the Roosevelt Corollary. The Roosevelt Corollary said that the United States would intervene in the internal affairs of Latin America through Military and Diplomatic actions in order to protect political stability and American interests. This policy was established without input from Latin American countries and put the US into the role of international police to maintain peace and order in the Western Hemisphere. Teddy Roosevelt’s philosophy was to “speak softly but carry a big stick” We also used “dollar diplomacy” which was the practice of replacing European loans with American ones in Latin America but then used military force to keep our investments safe.
this is up by 50% from 1988, when they first signed a free trade agreement.
As long as NAFTA has been in existence, there has been controversy over its benefits and costs. Since NAFTA is viewed as a neoliberal trade and investment agreement, supporters and critics alike are able to expand its validity to a grander scale when dealing with the question of whether free trade itself is beneficial or harmful. During the life of NAFTA, many valid arguments for and against free trade have been brought to the forefront.
The United States has for over two centuries been involved in the growing world economy. While the U.S. post revolutionary war sought to protect itself from outside influences has since the great depression and world war two looked to break trade restrictions. The United States role in the global economy has grown throughout the 20th century and as a result of several historical events has adopted positions of both benefactor and dependent. The United States trade policy has over time shifted from isolationist protectionism to a commitment to establishing world-wide free trade. Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages. However fair trade policies that protect America’s workers do not help foster wide economic growth. The United States must then engage in economic trade policies that both protect the United States founding principles and secure for tomorrow greater economic stability.
Free trade agreements have proved to be an effective tool for exporters to penetrate foreign markets; the reductions of trade barriers facilitate the exporting process and make it cheaper for producers to export goods and services to trading partners. The US currently has twelve Free Trade Agreements in place with Australia, Bahrain, Chile, DR-CAFTA, Israel, Jordan, Morocco, NAFTA, Oman, Peru, and Singapore, that accounts for 43% of total exports and an annual growth of 11.1% since the year 2000. On the other hand Colombia has nine Free Trade Agreements: Mexico, El Salvador-Guatemala-Honduras, CARCOM, CAN, MERCOSUR, Chile, Canada, Cuba, EFTA.
For my mapping assignment I chose the Central America region. This region is unique in the sense that its present situation is heavily intertwined with its colonialized past. Central America today is a place still reliant on agriculture as a notable part of their Gross Domestic Product (GDP). It is mostly the eastern side of the region that receives heavy rainfall, but on the whole, holds a climate throughout that is very welcoming for agriculture. Agriculture in general is the largest employer throughout this region. However, jobs are undergoing differentiation as the economy incorporates a more industrial and service oriented agenda. The agricultural economy is a direct byproduct of the colonial structure set in place from Spanish explorers in the early 1500’s. This export tradition is a concern for modern economists because it may be holding back the region in regards to long-term development.
The Success of the North American Free Trade Agreement (NAFTA). On January 1, 1994, a new approach to trade amongst North American countries took effect. With the aid of the United States Congress, President Bill Clinton was able to form a contract between the North American Countries of Canada, Mexico, and the United States of America. This contract, known as the North American Free Trade Agreement (or Nafta for short), was designed with many economic outcomes in mind.
The strategy has made the country to combine its export as a tool for economic development and a way of poverty reduction. Peru has signed free trade agreements with several countries, making nearly 95 percent of its export covered by free trade agreements. These free trade agreements make the country easy to tackle external vulnerabilities in the market in times of crisis (Brown et al, 2002). FTAs also enable Peruvian products to enter Asian and European markets without any regulations. These trade agreements and market openness have made Peru increase number of exporting companies and the products, specifically in non-traditional exports. Trade agreements have made the country diversify in non-traditional foods. Moreover, trade agreements are valuable tools that have enhanced foreign investment attraction, productivity boosting in the companies and technology transfer through lower imports costs in quality inputs and capital
Globalization over the past twenty has become an issue in many countries. This industrialization of second and third world countries by Western Civilization creates many opportunities for the inhabitants. Not only does it expand trading markets, but also promotes productivity and efficiency; thus improving the country and integrating it into the industrial world. This process not only benefits third world counties, but also industrialized nations by allowing them to export goods to the developing world and increase their profit margin.
The North American Free Trade Agreement (NAFTA) took effect January 1, 1994. It is a trade agreement between all three of countries of North America, which are The United States, Canada, and Mexico. The Canadian Prime Minister, Brian Mulroney, the Mexican President, Carlos Salinas de Gortari, and former U.S. President George H. Bush spearheaded the agreement. Relationships between the countries were already on good terms, especially between The United States and Canada. Five years before NAFTA went into effect they signed the Canada-U.S. Free Trade Agreement that eliminated all tariffs. It was only time before a more integrated agreement was put into effect for all of North America. The geographic location and the already established trade of goods and services made NAFTA a logical decision.
Throughout time societies have progressed through the collaboration of diverse ethnic groups, which exchanged goods and knowledge, as well as numerous other aspects. By trading, diverse societies are impacted economically, resulting in a myriad of alterations. Although, certain aspects throughout history remain constant as well, regardless of the formation of new civilizations. The period from 1500 to 1750, Latin America, also including the Caribbean, were involved interregional trade with a myriad of diverse regions. As a result of the desire to produce sugar on sugar plantations within Latin America, numerous slaves were imported from Africa to Latin America, as additional labor was required. Economically, the triangular trade led to the
In 1994, the most controversial alliance between nations took its affect. NAFTA (North American Free Trade Agreement) was the agreement to have free trade between Canada, United States and Mexico. According to the Institute for International Economics one million workers in 1995 would owe their jobs to U.S. exports to Mexico. Some 175,000 of those would be new jobs in higher paying sectors (Mohn 2007). Although it was suppose to drastically increase trade and create jobs, in many ways had the reverse affect. The environment took a backseat to the corporate greed. With the increase of trade, the pollution increased and the quality of goods decreased significantly. Our country lost more jobs than it gained. We have become increasingly dependent on other countries. The United States has sat by silently as the pollution from unregulated foreign low-wage manufacturing plants infiltrates our earth's rivers, air, and ground water. Our government has turned their heads on workers in other countries as well as our own, being exploited and forced to work in conditions not fit for and animal. NAFTA may have increased trade but at what cost? It looks like even the United States can be bought. The U. S. Government no longer controls our country, big business does.
CT Publishing Company, Redding Calif. 1996. North American Free Trade Agreement. Vol.1, US Government Printing Office, 192-330-817/70635, 1995.
Lipsey, Richard G.. "Will there be a Canadian-American Free Trade Association? ." The World Economy 9 (2008): 218-238.
CAFTA, the Central America Free Trade Agreement, or commonly known as the Dominican RepublicCentral America Free Trade Agreement (DR-CAFTA), is a free trade agreement. In international trade, free trade is an idealized market model, often stated as a political objective, in which trade of goods and services between countries are not hindered by government imposed tariffs (taxes on imports) or non-tariffs (Wikipedia, 2007).