A decade ago, Silence of the Lambs, the cinematic thriller starring Jodie Foster and Anthony Hopkins, was on its way to sweeping the Academy Awards; South Africa was holding its first multiracial democratic vote; and in Nicaragua, to nearly universal surprise, national elections had swept the Sandinistas from power. In his book Everybody Has His Own Gringo, Glenn Garvin recounts how one disappointed former contra had re-armed and returned to the mountains only a few months after the elections. This recontra observed to Garvin, “Here in Nicaragua, the only dialogue we ever have is with bullets.”[1] At the time, many Central Americans agreed, fearing that their latest experiment with democracy would meet a quick and bloody end and that the region would again descend into the chaos of war.
Yet on December 17, 2003, Latin America was engaged in a very different kind of dialogue. Trade ministers from El Salvador, Honduras, Guatemala, and Nicaragua had joined U.S. Trade Representative Robert B. Zoellick to celebrate the conclusion of negotiations for a free-trade agreement (FTA) between their countries and the United States. At a press conference, El Salvador’s economy minister Miguel Lacayo predicted: “This will mean a new future for our region. We are firm believers that there is a strong link between trade, development and democracy.” [2] A month later, Costa Rica concluded an FTA with the United States; the Dominican Republic was added earlier this month. [3]
The ongoing crisis in Haiti highlights the remarkable progress that Central America has made in a short period of time. But there is no guarantee that these countries will continue on a path of economic and political progress. The democratically elected presidents from the region–no military man among them, a first–took a major risk in deciding to pursue trade negotiations with the United States. As U.S. policymakers have long urged, they bet their political futures on free markets and democracy. [4] If the United States now turns its back on this agreement, the resolve of those leaders and the support of their publics could disintegrate. The achievements of the past decade could be reversed, and the regional credibility of the United States would, once again, be badly damaged.
CAFTA Makes Economic and Political Sense
Supporters of the U.S.-Central America Free Trade Agreement, or CAFTA, understandably tend to champion it on economic grounds. Trade between the United States and Central America is already significant for both sides, totaling about $20 billion per year. Although Central America stands to gain the most from this agreement, U.S. consumers and businesses will also reap significant rewards. U.S. exports to the region–some $9 billion in 2001–are already roughly equal to our exports to Russia, India, and Indonesia combined.[5] Trade is thriving despite the fact that U.S. exporters currently face a competitive disadvantage in Central America. The region has more than 20 trade agreements granting preferences to products from Mexico, Canada, Chile, and several South American nations; CAFTA is needed to put U.S. companies on an equal footing.
There is also strong foreign policy justification for CAFTA. When foreign policy goals are cited, however, they seldom merit more than a sound bite, such as “[CAFTA] is more than a trade negotiation–it is a plan to strengthen democracy and promote development in a region that has known too little of both.”[6] While factually correct, framing the debate in this manner does not convey the full importance of CAFTA for Central America and, by extension, for U.S. foreign policy. For many Americans, the reasons behind Central America’s desire for this agreement, if they are recognized at all, get lost in the cacophony of the domestic trade debate. An anti-globalization movement that works to undermine CAFTA by portraying it as something Washington is imposing on Central America further obscures the truth.
Ultimately, the biggest payoff from CAFTA will not be counted in dollars. With few exceptions, Latin America has a history of hope and potential that has repeatedly fallen prey to turmoil and poverty. Now, these small countries have approached the United States, not for a handout, but for a chance to be equal partners in trade. This is an important–and challenging–step on the road to political stability and prosperity. Despite progress, democracy in Central America remains fragile. Americans must not turn their backs on the region.
The Different Roads to CAFTA
Economic growth requires sound government institutions and a reliable legal framework. As the CAFTA negotiations proceeded, Zoellick reflected on how free trade can be a valuable catalyst for political progress: “Oppression, violence, and dictators on both the left and right have given way to a commitment to democracy in Central America,” he said. “With an FTA, we have an extraordinary opportunity to lock in economic reforms and strengthen the rule of law, good governance, and democratic institutions.” [7]
Of course, Central America is not a monolithic bloc. Each country has experienced bitter conflicts–at times with neighbors, at times within itself, and at times with the United States. Yet the region’s leaders now recognize that Central America will prosper more as a unified common market than as separate small economies. In a remarkably short period of time, these countries have come to share a common set of goals and are working to forge a united region. Staking their futures on the promise of free trade with the United States, Central America’s leaders have resisted domestic interests that seek to undo two decades of free market and democratic reforms. Unfortunately, progress in these countries–where political campaigns and elections are relatively new and often turn violent–can crumble rapidly.
El Salvador. Although the country’s economic turnaround has been called miraculous by outside observers, reforming El Salvador’s moribund state-run economy has proven more painful than many of its citizens expected. Opinion polls have shown consistent popular support for free trade, yet this year’s presidential elections have exposed a lingering nostalgia for the country’s authoritarian past among a substantial segment of the population. Officials say CAFTA will help buttress pro-market reforms at a critical time in the country’s history. They warn that excessive delay will give protectionist interest groups time to organize and will bring mounting pressure to backslide on trade.
The hard-fought win by pro-reform President Tony Saca on March 21 illustrates the dangers of rejecting CAFTA. As the Christian Science Monitor reported on the eve of the vote: “The left-wing party is running a former guerrilla commander and avowed communist. Twelve years have passed since a peace accord ended El Salvador’s bitter civil war and closed the curtain on one of the U.S.‘s hottest cold-war theaters. But Friday, on the eve of Sunday’s presidential elections, this tiny Central American nation seems to have gone back in time.” [8]
Guatemala. Tension was palpable throughout the region in the fall of 2003, as elections threatened to return to power Gen. Efrain Rios Montt. The former dictator has been accused of sponsoring 11 massacres in which at least 1,000 people died. During the campaign, Central America was reminded of its bloody past. As the BBC reported this month:
