THE BIG PICTURE Going after CAFTA BY SARA DONNELLY

On Monday, June 13, the Maine Citizen Trade Policy Commission (MCTPC) announced its opposition to a pending federal trade agreement which would eliminate tariffs and trade barriers between the United States, the Dominican Republic, and five countries in Central America. The Central American Free Trade Agreement, otherwise known as DR-CAFTA or CAFTA, is the first pending trade agreement that the state commission has weighed in on since it was established by the legislature in May 2004. If it passes, CAFTA could have far-reaching consequences for Maine’s economy and way of life.

The MCTPC, which is the only trade commission in the country comprising both legislators and citizen representatives from business, environmental, and human-rights groups, believes CAFTA would undermine Maine’s ability to govern companies within its borders and would further bleed jobs out of the state and the country.

"In terms of Maine specifically, CAFTA will continue a trend of job loss, of a race to the bottom in labor standards," says Matt Schlobohm, a representative from the Maine Fair Trade Campaign who sits on the commission. "It could also seriously undermine Maine’s democracy and Maine’s ability to self-govern in a way that is democratic and accountable."

To block CAFTA and all that it could mean for Maine, the 22-member commission must convince Maine’s congressional delegates to oppose it, and the delegation must then convince their colleagues in Washington that it is a bad idea for the US as a whole. And they’ve got to do it fast, because Schlobohm and other members of the panel say the Bush administration wants a vote on the treaty by early July.

CAFTA would create a trade and investment bloc which includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, the Dominican Republic, and the United States. The agreement must be ratified by the legislature in each country before becoming law in all of the countries. In the US, CAFTA has been mired in Congress for just over a year. Schlobohm says the reason for the delay is the Bush Administration has had trouble gathering enough "yes" votes to make CAFTA a reality.

CAFTA is similar to the mother of all US trade agreements, the North American Free Trade Agreement (NAFTA), one of the world’s largest. NAFTA was ratified in 1994 and opens up trade between Canada, the US, and Mexico. CAFTA follows in step with NAFTA and other trade agreements by restricting a member state’s ability to govern companies and by not enforcing labor rights for workers (for example, a company which violates the labor laws of its home country would be fined but not required to address the violation). The MCTPC alleges that CAFTA would reinforce low wages and labor standards in third world countries and also restrict states like Maine from regulating businesses on issues like environmental contamination and sprawl.

"Say in Maine we had a provision in our laws that said in order to sell bottled water you had to pay a certain percentage of the cost to the government to pay for cleanup associated with the waste created while bottling water," explains Liz Wiman, assistant attorney general and a member of MCTPC. "If there was an investor that thought that regulation unfairly restricted their right [to do business] they could challenge that restriction. They would sue the US government, alleging this particular restriction violates CAFTA."

The MCTPC sent a letter to democratic congressmen Michael Michaud and Tom Allen and republican senators Susan Collins and Olympia Snowe detailing its objections to the trade agreement and urging them to "actively work against the passage of DR-CAFTA." Both Michaud and Allen have promised to vote against the trade agreement but neither Collins nor Snowe has taken a formal position for or against. CAFTA must receive a majority vote in both the House and Senate before being enacted into law.

Snowe sits on the Senate Finance Committee, which likely will hold a review session on CAFTA called a "mock mark-up" on June 14.

The MCTPC’s evaluation of CAFTA is the result of a year’s worth of work analyzing hundreds of pages of complicated trade law and text. In the end, the commission’s opposition to CAFTA was unanimous and reflected testimony at two public hearings (one in Bangor in February and another in Portland in April) from representatives of labor, environmental, and legal groups which was nearly universally opposed to the agreement.

Schlobohm says the commission hopes not only to help sink CAFTA but also to change the way the US crafts trade policy in general.

"That faulty process [of creating trade agreements] which is really dominated by the largest multi-national corporate interests results in a trade policy that just doesn’t benefit the majority of people in the US or abroad," says Schlobohm. "The commission wants to address the job loss and lack of labor rights in trade policy and really move toward a policy that respects democracy and really lifts standards up around the world."

If CAFTA is killed in Congress, Schlobohm hopes it will send a message that trade policies which don’t protect the rights of citizens and workers won’t be tolerated.

"The argument is CAFTA is a referendum on NAFTA," says Schlobohm. "If CAFTA moves forward, this model for trade policy marches ahead; if CAFTA is stopped it will be hard for the Bush administration and others to move this model of trade forward."

CAFTA has sat in Congress awaiting a vote longer than any other trade agreement. While its future is uncertain, the American Progress Report recently quoted the head of the US Chamber of Commerce as saying, "If you [lawmakers] are going to vote against it, it’s going to cost you," and the Bush administration is pushing for a vote before the July 4 recess, so it’s clear groups like the MCTPC have a fight on their hands.