Statement of Farabundo Martí National Liberation Party

US House of Representatives

[BY PERMISSION OF THE CHAIRMAN:]

Statement of Farabundo Martí National Liberation Party, San Salvador, El Salvador

The Farabundo Martí National Liberation Party (FMLN) of El Salvador, Central America, as the majority party in Congress, we write to you respectfully at this time to inform you about our position on the ratification of the Free Trade Agreement between El Salvador and the United States (DR-CAFTA).

Free trade agreements contain many aspects that go beyond import-export issues to include a wide variety of topics such as investment, intellectual property rights, governmental purchases, services, competition policies, telecommunications, and the financial sector, worker rights, environmental issues among others.

For small countries who subscribe to them, these agreements end up defining the framework for public policies. Regulations established in the chapters on intellectual property rights and investments, government purchases, and trade in services, which infringe on the sovereign jurisdiction of the State, by promoting the privatization of public services through concessions.

If States are unable to define national economic policy and control strategic services, they will face serious limitations in their ability to assure the economic, social, and cultural rights of the great majority of the population of which 80% of households are in different levels of poverty.

With the ratification of these agreements by our countries’ legislative branches, the agreements become the law of the land. El Salvador is then faced with an all-encompassing instrument that legalizes the privileges of transnational corporations and turns them into rights. As this occurs the basic rights of workers, women, children and elders will be lost.

The FMLN rejects the mercantilist logic of the “free trade” agreements. A critical analysis of the CAFTA texts reveals the many negative impacts of the agreement, which would have on the daily life of the people and ecosystems of our countries—especially on women and impoverished families—as national sovereignty is eroded, legal frameworks are corrupted, and the neo-liberal nature of public policy is reinforced.

Defining free trade agreements as a synonym for economic growth, job creation, environmental protection, and wellbeing of the people is nothing but demagoguery aimed at generating a favorable opinion and the acceptance of neo-liberal policies. In fact, these policies cause a greater concentration of income and the wealth into the hands of transnational corporations and the wealthiest people of our lands. At this time, only 1 out of 3 people in El Salvador are permanently salaried employees. Given the projections from the United States, DR-CAFTA will massively increase the exportation in agriculture products which implies only for El Salvador, that in the first fourteen years of the agreement we will lose 400,000 permanent jobs only in the agricultural and textile industry. [1] This will further increase poverty in El Salvador and all Central America and the Dominican Republic, therefore, democracy and political stability will continue to weaken and at the same time the migration will augment profusely from El Salvador and Central America. This has been proven with Nafta.

The following is a summary of the principle reasons why we reject DR-CAFTA and why we ask the representatives of the United States Congress to do the same.

  1. The Mirage of Free Trade. Free trade is not possible within a context where a country like the United States relies on subsidized and protectionist measures for its own economy (especially to protect against imported agricultural products) while at the same time forcing other countries to open their economies indiscriminately to U.S. exports and capital.
  2. Unrecognized Asymmetries. There is an unwillingness to recognize the asymmetries that exist in our economies and businesses-especially micro, small, and medium-sized businesses-that operate at low levels of efficiency and are unable to compete. These asymmetries exist because of the lack of an effective policy of incentives, innovations, training, and access to financial services. They are heightened by deteriorating infrastructure and by constant and substantial increases in the rates of telephone and electric services provided by transnational monopolies. [2]
  3. Impediments to Migration. DR-CAFTA facilitates only the movement of “business people” who work in large corporations, yet it does not incorporate or recognize the fundamental labor rights in El Salvador and Central America. This is a direct violation of the Salvador Constitution.
  4. Weakening of the State’s Social Obligations. The State is increasingly abandoning its obligation to assure the economic and social wellbeing of all of its inhabitants, favoring instead the interests of transnational corporations and foreign investment in new laws on tariffs, competition, labor rights, environment, quality of services and taxes, among others.
  5. Exclusionary and Anti-democratic Negotiations. Negotiations for these agreements are carried out in quasi-secret conditions, outside the control of citizens. The ratification of DR-CAFTA in El Salvador was done without the consensus of the Salvadoran people. Refusal to contemplate a serious debate within Congress lead to the lack of substantial research and evaluation on DR- CAFTA and it’s effect on the political, social, and economic impact in the country. Sectors that represent micro, small, and medium-sized businesses have been excluded from trade negotiations, as have workers, consumers, professionals, and other representatives of civil society. In the case of the uprising in Guatemala the population opposed openly DR-CAFTA and the response of the government was a repressive answer which concluded in violence. The similarity in the approval of DR-CAFTA in Guatemala, Honduras and El Salvador goes to show the anti democratic process to impose DR-CAFTA in Central America.
  6. No Assessment of Real Impact. None of the Central American countries has undertaken studies to evaluate the economic, social, environmental, and cultural impacts of CAFTA, to forecast the net balance in terms of jobs created and lost in the various sectors of the economy, or to measure the environmental, social, and cultural impacts of new investments.
  7. The Privatization of Public Goods and Services. This agreement creates ideal conditions for transnational corporations to become the owners of the remaining public enterprises and opens the door for services like water, security, health, education, museums, parks, highways, ports, and airports to become private monopolies or oligopolies.
  8. The Consolidation of the Maquila Development Model. Maquilas generate miserable and unjust conditions of employment, especially for young women, and corporations that take advantage of permissive legislation to abuse the rights of workers. Within the maquila model, the ability to compete depends on cheap labor and the use of contaminating and extractive technologies that help to lower production costs even further. So, even this sector has not adequately incorporated in DR-CAFTA the protection of Maquilas permanent future within the countries of Central America. The projections of the CBI countries will lose a market equivalent of 6.3 billion dollars with a massive loss of employment that only for El Salvador will imply 60,000 losses of permanent jobs. This is the result of the open market of the textile and garment industry from China.
  9. The Legalization of Bio-piracy and the Looting of Natural Resources. A permissive framework is established for transnational companies that work in biogenetics, biotechnology, the food industry, or chemicals and pharmaceuticals. Doors are further opened for our people to be victimized once again by the extraction of their natural resources, which now include plant species, micro-organisms, and traditional knowledge that could be “patented” by transnational corporations.
  10. A Coup de Grace to Agriculture and a Threat to Food Security. The elimination of tariffs as well as the invasion of agricultural goods subsidized in the United States will bankrupt local producers and cause irreversible damage to our capacity to produce our own food. The region will then become simply a market that trades basic goods for commercial reasons, even as the quality of the imported food (genetically modified) may seriously threaten the health of consumers.
  11. A Violation of the Constitution. Constitutionally established jurisdictions of the executive, legislative and judicial branches are being undermined in order to pass laws and policies compatible with DR-CAFTA. National territory is also undermined, as sovereignty up to 200 miles from shore would not be recognized. The Legislative Assembly has also been forced to ratify the agreements without the due deliberation required of this body. Finally, corporations are given the right to sue governments if government actions damage in some way their ability to make a profit. Citizens of our countries do not even have this right.
  12. Lack of access to Generic Medicine. There is a duplicitous conflict which results in the protection of the interest of the large biochemical corporations and the denial and lack of healthcare of the population in El Salvador and Central America.

For these reasons, we oppose the passage of the Dominican Republic- Central America Free Trade Agreement (DR-CAFTA), and manifest the following:

First: We call on the Salvadoran population and the people of Central America to increase their struggle against the governments’ willingness to turn the country over to powerful corporations. We call on them to strengthen the articulation of their organizing efforts and to present alternative proposals elaborated by civil society, with the participation of actors from various territories and sectors, in order to promote a true process of social integration among our peoples.

Second: We propose the participatory construction of an alternative Central American integration plan (including Belize and Panama) that would promote unity; improve the quality of life of our peoples; guarantee full respect for human rights; guarantee sustainability in harmony with the ecosystem and with our multicultural, multi-lingual societies; and strengthen the sovereignty of our country. We stand firmly in favor of the integration of Central America with all of the peoples of the Caribbean and Latin America which DR- CAFTA denies.

Third: We invite social and labor organizations of the United States-where more than two million of our brothers and sisters reside-to work with us to create an agreement an agreement for development which includes technical cooperation and a positive social and economic integration with the United States that emphasizes full respect for human rights; the free migration of persons; socio-environmental sustainability; fair trade; investments that transfer clean technologies and production processes; the cancellation of the foreign debt; and the payment of the ecological debt, in order to achieve a democratic, sustainable, and just society in Central America.

Fourth: We ask all legislators to vote NO on DR-CAFTA and to work instead for the rights and interests of all people and for a regional integration that is just, sustainable, and mutually supportive.

Fifth: In El Salvador DR- CAFTA was approved without any respect for our judicial process which violates our constitution. DR- CAFTA clearly violates the countries constitution and we have presented a law suit to the Supreme Court in El Salvador to declare DR- CAFTA unconstitutional. Congress Representatives were not allowed to debate the contents of DR-CAFTA and the President of the National Congress declared “although he wasn’t knowledgeable about DR-CAFTA he was going to allow approval of DR-CAFTA”.

San Salvador, April 11, 2005

Diputado Salvador Arias, Member of the Ad- Hoc DR-CAFTA Commission; Permanent Economic and Agricultural Commission and Permanent Finance Commission
Member of the Steering Committee of the FMLN Fraccion

Footnotes:

[1United States International Trade Commission, Investigations No. TA 2104-13. USITC Publication 3717, August 2004.

[2For concise clarity in the Asymmetries, refer to the graph annexed at the end of document

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