[Congressional Record Volume 151, Number 67 (Thursday, May 19, 2005)]
[House]
[Page H3685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 CAFTA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California (Ms. Waters) is recognized for 5 minutes.
  Ms. WATERS. Mr. Speaker, CAFTA, the United States Central American 
Free Trade Agreement, is yet another unfair trade deal that will hurt 
American workers. CAFTA is the latest unfair trade deal in a decade of 
failed trade policies. Over the last 12 years, the United States trade 
deficit has exploded from $39 billion in 1992 to over $618 billion in 
2004. If CAFTA becomes effective, the result will be fewer jobs for 
American workers.
  CAFTA is modeled on NAFTA, the North American Free Trade Agreement, 
which had and continues to have a devastating impact on many American 
workers. When NAFTA was passed in 1994, the United States had a $2 
billion trade surplus with Mexico. In 2004, we had a $45 billion trade 
deficit in Mexico. That means our trade deficit with Mexico increased 
by an average of $4.7 billion per year over the last 10 years. As a 
result of NAFTA, the United States has been exporting American jobs to 
Mexico.
  Mr. Speaker, the countries of Central America already receive 
preferential trade benefits. About 80 percent of exports from CAFTA 
countries enter the United States duty free. If CAFTA is passed, 100 
percent of nontextile manufactured goods from Central America will 
enter the United States duty free.
  CAFTA supporters like to claim that CAFTA will create new markets for 
American products, but this argument is highly flawed. The six 
countries of Central America, El Salvador, Guatemala, Honduras, 
Nicaragua, Costa Rica, and the Dominican Republic are among the world's 
smallest economies. These six countries have a combined economic output 
of only $85 billion. My home city, Metropolitan Los Angeles, with a 
$411 billion economy, produces nearly five times the volume of goods 
and services as the CAFTA countries. The CAFTA countries are simply 
just too small to absorb a significant quantity of American 
manufactured goods.
  Unfortunately, the countries of Central America also are among the 
poorest countries. The average Nicaraguan worker earns only $2,300 per 
year, or about $191 per month. Forty percent of Central American 
workers earn less than $2 per day. Central American workers simply 
cannot afford to buy American cars from Ohio or American computers from 
California.
  Mr. Speaker, I have spent much of my time in Congress working on the 
issue of debt relief for poor countries. Two of the CAFTA countries, 
Honduras and Nicaragua, are included in my legislation, H.R. 1130, The 
Jubilee Act, which cancels the debts that poor countries owe to 
multilateral institutions like the International Monetary Fund and the 
World Bank. In 2004, Nicaragua paid these institutions $107 million in 
debt service payments. That is $107 million that Nicaraguans could not 
spend on American products. As long as these countries remain heavily 
indented and deeply impoverished, their people will never be able to 
afford American products made by American workers.
  Any way you look at it, CAFTA is a one-sided deal that offers limited 
benefits to foreign workers at a tremendous cost to American workers. 
The only service these six teeny Central American countries can provide 
to the United States is cheap labor. It is no surprise, then, that the 
largest share of U.S. exports to the CAFTA countries consist of fabric. 
This fabric is stitched into clothing and shipped right back to the 
United States where it is sold to American consumers.
  CAFTA is not a free-trade agreement at all, it is an outsourcing 
agreement. It allows profit-hungry corporations to shift American jobs 
to impoverished countries, where workers can be forced to work long 
hours for little pay and no benefits. It is a bad deal for Central 
American workers and it is an even worse deal for workers here in the 
United States.
  Mr. Speaker, American workers need good jobs that pay good wages. 
They do not need another NAFTA. I urge my colleagues to join me in 
defeating CAFTA.

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