Witness for Peace : POLICY ANALYSIS: Free Trade and Labor Rights
Free Trade opens up markets by eliminating all taxes and tariffs on products being imported and exported, creating one large economy in which everyone competes. Free trade is part of the neoliberal model that encourages countries to produce for export rather than for their own consumption. Under this model, poor countries like Nicaragua are supposed to use their “comparative advantage” to compete against large economies like Mexico and the United States. Nicaragua’s “comparative advantage” is a cheap, abundant labor force and cash crops. Following in the footsteps of NAFTA (North America Free Trade Agreement), CAFTA (Central America Free Trade Agreement) involves five Central American nations (Guatemala, El Salvador, Honduras, Costa Rica and Nicaragua), and the Dominican Republic. Expanding NAFTA further south through the regional free trade agreement CAFTA is a strategic step towards the hemisphere-wide FTAA (Free Trade Area of the Americas).CAFTA BackgroundCAFTA passed in the US Cong
