Thursday, February 03, 2011

Five years under DR-CAFTA

The fifth anniversary of the effective date of the DR-CAFTA trade agreement is approaching in March. We can expect to see various writers trying to assess the impact of five years under this treaty and whether it was a good deal for El Salvador. I'll try to provide ways to think about DR-CAFTA's impact in posts over the next month.

An article at alterinfos.org by Leonard Morin titled El Salvador - Free Trade's Dubious Blessings provides an assessment from the left, while providing space to acknowledge the viewpoints of supporters of DR-CAFTA. It's a good read to get you started on thinking about the impact of the trade pact. Here is an excerpt from one of the figures interviewed for the article:

According to Gilberto García of the Center for Labor Studies and Support (Centro de Estudios y Apoyo Laboral, CEAL), “the Salvadoran and US authorities told us in 2003, 2004, and 2005 that the FTA [Free Trade Agreement] was going to be the solution, that the FTA was going to solve all this… The governments of that period said ‘No, now everything is going to be different, everything is going to change. There are going to be more jobs, more investment, more economic prosperity,’ etc., etc. . . . Now they tell us: ‘aha, you can’t show a relationship between problems worsening and the FTA,’ but what we can show is that what they said was going to happen never happened!”
It is a difficult thing to isolate the impacts of DR-CAFTA. How do you measure the impact of the agreement's relaxation of trade rules against the impact of a world economic downturn, against the cost of record high crime, against the emerging power of China in world trade, and against El Salvador's change of political leadership? It probably is not possible, but many will try.

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