Table of Contents

Introduction: Why Stop CAFTA?

Promises and Failures of DR-CAFTA in El Salvador

By César Augusto Sanción, translated by Sara Skinner, SHARE: Building a New El Salvador Today

El Salvador: Intellectual Property under CAFTA

By the Center for International Studies (CEI), translated by Katherine Hoyt, Nicaragua Network

CAFTA is a Disaster: Vignettes from the Nicaraguan Countryside and Marketplace

By Rachel Anderson, Witness for Peace Nicaragua

U.S. Agriculture since DR-CAFTA

By James K. Polk, PhD

CAFTA: Will it Improve Central America?

By Omar Salazar, translated by Krista Hanson and Katherine Hoyt

Major Problems with Mega-Projects

By Zack Haas, Maryknoll Office for Global Concerns

Open Doors to Resource Extraction

By the Pastoral Commission for Peace and Ecology (COPAE), translated by Network in Solidarity with the People of

Guatemala (NISGUA)

ALBA: A Different Kind of Trade Agreement

By Jill Hokanson and Stephanie Selekman, Nicaragua Network

Association Agreement with the European Union: Better than CAFTA?

By Katherine Hoyt, Nicaragua Network

Conclusions

Introduction: Why Stop CAFTA?

DR-CAFTA: Effects and Alternatives

The Stop CAFTA Coalition and its partners have compiled this third annual report to detail the trends and impacts the U.S.-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) has had on citizens and economies in the signatory countries. The agreement is still relatively new, but the problems and trends forecasted or identified early on have materialized or proven worse than first expected. Patterns of growing inequality and ongoing poverty within the signatory countries have only become more extreme, contrary to claims that DR-CAFTA proponents made when arguing for the agreement’s passage.

The Stop CAFTA Coalition has determined that the negative impacts that DR-CAFTA has made in these countries are not simply “growing pains,” or the inevitable transitionary problems associated with the restructuring of a country’s economic system; they are fundamental flaws in the economic theory that drives DRCAFTA and will likely not improve. Therefore, the Coalition strongly recommends that the DR-CAFTA agreement be reassessed by the incoming Obama Administration and the 111th Congress, which convenes in January 2009. Not only should the U.S. put a moratorium on future CAFTA-style agreements, but Congress should evaluate the existing agreements and renegotiate or roll back the failed accords. In the case of DRCAFTA, the results of this report lead the Stop CAFTA Coalition to believe that the current agreement should be either completely overhauled or outright eliminated, and that a alternative trade relationship between the U.S. and Central America should built based on the eight principles of the “Pledge for Trade Justice” presented in the conclusion of this report.

This report differs slightly from previous monitoring reports published by the Stop CAFTA Coalition. Instead of a broad presentation showcasing DR-CAFTA’s impact on all signatory countries, this report presents some more specific concerns and patterns in three of the earliest adopters of DR-CAFTA: El Salvador, Guatemala, and Nicaragua. The report also highlights the impact DR-CAFTA has had on the US economy, and showcases some alternative trade agreements that may be better suited to the region. This report is the third in a series of reports by the Stop CAFTA Coalition about DR-CAFTA; the first was published in September 2006 and the second in September 2007. Those reports can be found at www.stopcafta.org.

Background

The Bush administration initiated CAFTA in January 2002 in an effort to revitalize faltering negotiations for a Free Trade Area of the Americas. Following a year of preliminary discussions, official negotiations began in February 2003 and were completed in December of the same year between the United States, El Salvador, Guatemala, Nicaragua, and Honduras. Costa Rica joined the accord in January of 2004, and all six countries formally signed the agreement in May of 2004. In August of 2004, the Dominican Republic was added to the core agreement, thereby creating the U.S.-Dominican Republic-Central America Free Trade Agreement, or DRCAFTA. In this report, the acronyms CAFTA and DR-CAFTA are used synonymously.

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