Jorge Alberto Grochembake

Just over a year ago, the US proposed a free trade treaty to five Central American countries as a means to develop their economies and eradicate poverty by creating jobs in this region of 37 million people. But after nine rounds of talks, which wrapped up on Dec. 17, the promising outlook turned threatening, according to activists.

US insistence on certain delicate trade issues prompted Costa Rica on Dec.16 to postpone negotiations until January. A day later, the delegations from Guat-emala, El Salvador, Honduras and Nicaragua decided in Washington that the talks were done.

Costa Rica’s withdrawal reached a tense moment when President Abel Pacheco said his country would not sign the free trade agreement if the US maintained its position of “coloniser”. Costa Rica’s decision came in response to US insistence on liberalisation of its state-run insurance and telecommunications monopolies.

Robert Zoellick, the US trade representative, said the process would continue with the four countries. Washington hopes that Costa Rica would join the treaty, but the parties are not going to wait, he said. The documents produced in the treaty negotiations will be made public in April, when the deadlines arrive for ratification by the respective national legislatures and for signatures from the presidents. If the accord enters into force in January 2005 as planned, more than 80 per cent of US manufactured goods would be immediately free of tariffs in Guatemala, El Salvador, Honduras and Nicaragua.

In exchange, Washington would grant similar treatment to nearly all industrial and consumer goods from the four Central American nations, which in practice implies consolidating the benefits already in place as part of the Caribbean Basin Initiative. More than half of US agricultural sales to the signing countries would also be free of tariffs. This provision would cover A-quality beef, cotton, wheat, soy, wine and other products. But in Central America, few are celebrating the treaty. Civil society groups, led by peasant farmers, cite the warnings they issued at the beginning of the year: that the accord could cost thousands of jobs and aggravate poverty, which already affects more than half the region’s population.

The five Central American countries involved in the negotiations tried to obtain special agricultural safeguards to protect the region’s farmers from having to compete with the subsidised US products coming to market. .

Textiles and clothing will be tariff free and quotas retroactive to Jan 1, 2004, but only if they comply with the treaty’s rules of origin, that is, if the raw materials all come from countries party to the agreement. The scheme allows for some exceptions. As for bean imports, Milton González, of Guatemala’s National Coordinator for Basic Grains, says the US set a deadline for zero tariffs.

“Our proposal was that for every quintal (100 pounds) of imported beans, local companies should have 10 quintals in the domestic market. Now the diet of Guatemalans and thousands of agricultural jobs are in danger,” said González. “We were sacrificed. Now we are going to have to compete under unequal conditions with US pork producers,” complains Federico Fernández, head of a pork association in El Salvador. He said the US would be able to export 1,500 tons of pork to each of the countries of the treaty annually, with a 10 percent increase each year. “The quota granted to the US is double what we had proposed to our negotiating team,” said Fernández.

The conclusion of the negotiations seems to prove right the civil society groups, led by Indians and peasant farmers, that challenged the supposed benefits of the free trade agreement. But still pending is the battle for ratification in each of the national legislatures. “We are just beginning another phase: the internal and regional fight, so that with protest marches or other means the congresses do not ratify a treaty that will bring only misery, hunger and death,” said Guatemalan peasant leader Pascual.

IPS