By IPS Correspondents
SAN JOSE, Oct 24 2003 (IPS)

Opening Central America’s borders to a flood of products “Made in the U.S.A.” will hurt farming and other areas of the region’s economy, warned groups opposed to the free trade treaty currently in the works, as negotiators wrapped up another phase of the talks Friday without producing any important results.

In the eighth round of talks involving five Central American governments and Washington begun Monday in the southern U.S. city of Houston, Texas, the negotiators reached an agreement on investment rules, but put off decisions on more sensitive areas – like farm and textile trade – until December.

Trade experts are saying that Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, which are aiming for a Central American Free Trade Agreement (CAFTA) with the United States, are not prepared for the increase in consumption and the invasion of U.S. products that the treaty would entail.

“We oppose the way the treaty has been negotiated, in that there has been great exclusion of social and productive sectors, and it will ultimately break down the social model that for more than 50 years has sustained the Costa Rican people,” says Alvino Vargas, secretary-general of the National Association of Public Employees.

Faced with the liberalisation of the telecommunications sector to the detriment of Costa Rica and the “psychological war” against the population, the only viable recourse for putting a stop to the free trade agreement is for the people to take to the streets in protest, Vargas said in an IPS interview.

He explained that what he refers to as the psychological war is the Costa Rican right-wing’s efforts to make it look like the only ones who oppose the treaty are the labour unions.

When in reality, he said, what has emerged is “a broad social movement that includes peasant farmers, indigenous people, women’s groups and small and medium entrepreneurs.”

“The United States has threatened to exclude Costa Rica if it refuses to negotiate telecommunications. But in fact 60 percent of the leading companies that export to this country are based on U.S. capital, so I don’t think such a drastic measure will be taken,” said Vargas.

But a “pitched ideological battle” is drawing near, says the public employees union leader, adding that Central American society will defend with all its strength the right to include production in the trade negotiations underway with the United States.

“In the case of Costa Rica it is not possible that Mr. Robert Zoellick (U..S. trade representative) could come and pound on President Abel Pacheco’s desk and make him yield on the telecoms issue and demand an opening in that area,” he said.

Vargas criticised the attitude of Zoellick, who told Pacheco on Sep. 30 during a visit to Costa Rica that this country could be excluded from the trade agreement between the so-called Group of Five and the United States if it does not agree to liberalisation of its telecommunications market.

The union leader said that the fight to defend the Costa Rican Institute of Electricity (ICE) in 1999 unleashed a massive social movement that forced then-president Miguel Angel Rodríguez to withdraw his telecoms-liberalising bill from Congress.

“We will prove to the government and the right-wing businessmen that we are not just a few, but rather we are the vast majority of Costa Ricans who are against a treaty under the terms they are negotiating now,” Vargas said.

The opposition Citizen Action Party sent a letter to Pacheco demanding that he ensure there is transparency in the negotiations, stressing that very few Costa Ricans are aware of the contents of the treaty that is to be signed on their behalf.

Among the voices criticising the process is former Costa Rican president Rodrigo Carazo (1978-1982), who believes it is a mistake “to make the people believe that the free trade agreement will only bring benefits.”

Carazo noted that Roman Catholic bishops “of Canada, United States and Mexico counsel our politicians, before getting caught in a tangle like their countries are in the North American Free Trade Agreement (NAFTA), to meet in order to hear about all of the bad things that have occurred, so that they don’t make the same mistakes.”

More than 50 percent of the region’s trade is with the United States and millions of Central Americans reside within the borders of the North American giant, whether legally or illegally.

For Central America, where half of the 38 million habitants live in poverty, the treaty with the United States could represent a great opportunity, admit CAFTA critics, but only if negotiated under different conditions than are being discussed now, they say.

Edgar Brenes, of the Salvadoran non-governmental National Foundation for Development (FUNDE), said in comments to IPS that there is a conviction among negotiators to reach an agreement, even at the expense of the most vulnerable sectors, such as small farmers and entrepreneurs.

“We have made written observations and we have participated, in adjacent rooms, in the various rounds of the talks, but our contributions are never taken into consideration. The governments only discuss what is of interest to specific economic sectors,” he said.

Brenes added that the Mesoamerican Initiative on Trade, Integration and Development (CID), an umbrella group for numerous Central American non-governmental organisations, including FUNDE, has been closely following the talks and has found a “marked exclusion” of civil society in general.

In this context, and with the governments aiming to sign the treaty in December, the NGOs are planning to step up protests and to increase pressure on the legislatures in the five Central American countries that are to ratify the treaty once it is signed.

The first anti-CAFTA demonstrations took place Oct. 20 in El Salvador and Costa Rica, and organisers in the latter are planning another for Nov. 20.

El Salvador’s economy minister, Miguel Lacayo, has met the criticisms head on, stating that the government has been open to input from the population in regards to the treaty, proved by the “more than 200 meetings that the Office of Productive Sector Support has held with various producers.”

The Salvadoran people have been duly informed of what they can expect from the regional accord with the United States, said Lacayo.

According to Nicaraguan economist and sociologist Cirilo Otero, there are at least five basic premises for understanding CAFTA:

“The political demands made by the United States, the reliance of our economies on that country, the impossibility of avoiding the treaty given the conditions of the global market, the dependence of the region’s governments on institutions like the World Bank and the International Monetary Fund, and their divisiveness when the time comes to negotiate.”

Otero says the Central American countries should form a solid negotiating bloc so that they can protect themselves in the economic areas where they are most vulnerable.

“In Costa Rica, it’s the telecommunications sector, in Nicaragua and Honduras it’s agriculture and textiles, and in El Salvador and Guatemala, services and trade,” he said.

The fact is that the region is not prepared for an increase in consumption, and the flood of U.S. products could only be assimilated if citizens turn to sources of cash as diverse as “remittances (from relatives living in the United States), money laundering or drug trafficking,” commented the expert.

Several of the region’s countries already have free trade agreements in force with Mexico and Canada, and have yet to see the “great benefits” they were promised, Otero added.

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