CAFTA: Bad for Texas
and Bad for USA Workers

Texans know a thing or two about international trade. After all, we share a long border with Mexico and therefore have a great deal of experience in international trade. We also know a bad deal in this area when we see it. And one of the worst deals around when it comes to international trade is the proposed Central America Free Trade Agreement, or CAFTA for short.

After being negotiated last year by the Bush administration, Congressional approval is the next step to bring this trade agreement to life. CAFTA is based on the same model as NAFTA, the North American Free Trade Agreement between Canada, the U.S. and Mexico, which went into effect in the early 1990s. And that point is very important in discussing CAFTA, because of the parallels between the two agreements.

When first proposed, NAFTA was hailed as a wonderful creation that would benefit all involved. Former President Bill Clinton praised it. The promises were grand, with universal predictions that more jobs would be created. At one ceremony, then-President Clinton said, “I believe that NAFTA will create a million jobs in the first five years of its impact.”

As it turns out, he was wrong. Instead of adding jobs, NAFTA resulted in a net loss of jobs in the United States, according to both the U.S. Labor Department and private economic studies.

A 2003 study by the Economic Policy Institute placed the total U.S. job loss attributable to NAFTA at 879,280 for the period 1993-2002. The losses occurred in al 50 states plus the District of Columbia. As you have probably already guessed by now, Texas was near the top of the list in lost jobs, just over 50,000, according to the study.

“Most of those lost jobs were high-wage positions in manufacturing industries,” wrote economist Robert E. Scott in his introduction to the report The High Price of “Free” Trade.” He continued: “The loss of these jobs is just the most visible tip of NAFTA’s impact on the U.S. economy. In fact, NAFTA has also contributed to rising income inequality, has suppressed real wages for production workers, weakened workers' collective bargaining powers and ability to organize unions, and reduced fringe benefits.” This is not a very positive report card for something that was touted as an economic bonanza.

However, this study is crucial to our analysis of the pending CAFTA agreement because CAFTA has more in common with NAFTA than just sharing a similar name. It is based on the same premises and same promises as its older sister agreement.

With more than a decade of experience, we now know that the promises of NAFTA did not hold. If allowed to go into force, CAFTA would be destined to bring us the same results as NAFTA: fewer jobs for Texans and an increased international trade deficit. That’s why more and more Texans are asking our elected officials in Congress to say “NO” to CAFTA. I hope you’ll join us. If you do, the job you help save may be your own.

Texas Farmers Union, P.O. Box 738, Sweetwater, Tx 79556