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In U.S., Latino Discord Over Trade Accord

Many oppose the Central American pact, saying it would spur job losses here and exploitation abroad.

August 23, 2004|Evelyn Iritani | Times Staff Writer

An emotional battle is brewing in the Latino community over whether a proposed free trade agreement with five Central American nations and the Dominican Republic will bring greater prosperity or despair to the immigrants who have settled in the U.S. and the relatives they've left behind.

The Central American Free Trade Agreement would drastically lower tariffs on U.S. farm products, consumer goods and services sold in that region and make it easier for those countries to export their products, including sugar and apparel, to the United States.

The accord, commonly called CAFTA, still must be ratified by Congress and the governments of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The pact, U.S. business leaders said, might boost California exports by 17% and create more than 1,300 new jobs in the state within the first year of its implementation.

Yet many prominent Latino organizations -- including the League of United Latin American Citizens; the Salvadoran American National Network, and the Central American Resource Center -- oppose CAFTA. They have argued that it would hasten the outsourcing of U.S. jobs and encourage the exploitation of poor Central American workers and the environment.

The tensions over CAFTA are reminiscent of the impassioned debate that divided the Mexican American community a decade ago when the Clinton administration pushed through the controversial North American Free Trade Agreement with Mexico and Canada.

Those divisions were on full display last week when CAFTA supporters held a conference for Latino business leaders in Los Angeles featuring El Salvador's president, Tony Saca, and the ambassadors of El Salvador and Nicaragua.

While Saca accused CAFTA's critics of turning a job-creating trade pact into a "political pinata," Rep. Xavier Becerra, (D-Los Angeles), told the crowd that he "believed in a CAFTA but not this CAFTA" because the legal protections for workers were not as strong as those for products and intellectual property.

"I learned from NAFTA that good intentions are no substitute for enforceability of rules," said Becerra, a lawyer who supported NAFTA's passage in 1994.

Latino business leaders such as Mauricio Fux, senior vice president at Los Angeles-based La Curacao, defended the trade pact. They said it would help the struggling economies of Central America compete against fierce competition from China and reduce shipping costs and other barriers that have prevented Latino entrepreneurs from exploiting opportunities back home.

"By lowering the duty rates on both sides, it will give us more confidence in investing in those regions," said Fux, whose company operates several large department stores in Southern California, exports goods throughout Latin America and owns the U.S. franchise for the popular Guatemalan restaurant Pollo Campero.

The split in the Latino community further complicates the prospects for CAFTA, which has been signed by President Bush but is opposed by Democratic challenger Sen. John F. Kerry and labor groups. Kerry has said he would not approve CAFTA unless it was revised to include stronger protections for workers and the environment.

Similar concerns have emerged about the proposed Free Trade Area of the Americas, or FTAA, which would create a free-trade area from Alaska to the tip of South America.

Supporters and opponents of the proposed trade pacts are courting the Latino community, whose exploding numbers have made it a potential swing vote in the upcoming presidential election. The National Council of La Raza, a leading Latino organization, supports the FTAA but has not taken a position on CAFTA.

The Congressional Hispanic Caucus hasn't taken an official position on CAFTA because its 20 Democratic members have been unable to reach a consensus. Reps. Hilda L. Solis (D-El Monte) and Raul M. Grijalva, (D-Ariz.), have joined Becerra in opposing the agreement, and no caucus member has publicly supported the measure, according to Maria Meier, executive director of the caucus.

Given the political sensitivities, no one expects CAFTA to be brought to Congress before the November election. Supporters are desperate to have the measure passed before year-end. That's when the United States and other nations have agreed to phase out a complex system of quotas that have restricted trade in textiles and apparel.

Without the benefits of CAFTA, Central American leaders have argued that they would lose millions of textile and apparel jobs because they wouldn't be able to compete with China's low-cost factories. Textile and apparel jobs are a leading hard-currency earner in the region.

Under the rules of the World Trade Organization, which oversees global trade, any preferential trade deals that exist before Jan. 1 will be allowed to continue.

CAFTA would allow Central American countries to export apparel to the U.S. duty-free, as long as it was produced from fabrics or fibers made in the region or the United States.

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