Free Trade or Freebies for the Powerful?

As the United States Congress begins to debate the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), a titanic struggle between the forces of free trade and protectionism promises to unfold. But that debate should not be allowed to mask the truth behind this treaty: the DR-CAFTA is more a pleading of special interests than a free-trade deal. It manages simultaneously to fleece the people of six poor countries and to put US workers in harm’s way.

To be sure, expanded trade holds great promise for promoting development and democracy. But the trade rules inscribed in DR-CAFTA promote profits for a few at the expense of the well being of the many. Ironically, the pact even limits market competition to protect powerful special interests, undercutting the core principles of free trade.

Consider pharmaceuticals. For American drug companies, this agreement extends the time period during which brand-name pharmaceuticals have exclusive access to markets, postponing the entry of generic drugs and thus limiting competition. For Central Americans, the cost of drugs will soar, straining budgets and gutting health care. The result may be a death sentence for many.

In agriculture, small farmers would be placed on a collision course with US agro-business and their heavily subsidized farm exports. The US exported paddy rice, for example, at a price almost 20% lower than the cost of production in 2003, making it impossible for Central Americans to compete.