Free trade trade-offs.

Byline: The Register-Guard

Most people support free trade in principle, particularly if it means expanding the U.S. economy while spreading prosperity more equitably among poorer countries. If the rising tide of free trade truly lifts all boats, what's not to like?

But it's never that simple. When the term "free trade" becomes part of an international agreement, its meaning undergoes a radical transformation. After the treaty language is worked over by special interests, trade-offs can substantially water down trade opportunities.

The proposed Central America Free Trade Agreement awaiting approval in Congress represents just such a collection of trade-offs. This enhanced trade relationship between the United States and six Central American countries would expand employment and prosperity in some areas, but it's also likely to cost thousands of U.S. and Central American workers and farmers their livelihoods.

CAFTA would provide desperately needed help to raise wages in Central America, where more than 40 percent of workers make less than $2 a day. But it could have the opposite effect in the United States, where American workers would face increased pressure from employers to hold down wage demands or face the threat of having their jobs exported to take advantage of cheaper Central American labor.

In other words, within CAFTA's capricious tide, some boats are lifted while others are swamped.

The current free trade debate has been sharpened by a dozen years of experience with the much larger North American Free Trade Agreement between the United States, Canada and Mexico, on which CAFTA is based. CAFTA is opposed, often for different reasons, by the AFL-CIO, nonprofit consumer groups such as Public Citizen, farm organizations, the U.S. sugar industry and many congressional Demo- crats.

The pact is strongly supported by the Bush administration, most U.S. business and agribusiness groups and by the governments of the six Central American trade partners - El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic.

To win preferred access to U.S. markets, the six Central American countries will have to privatize some public services, such as health care, telecommunications and water distribution. The benefits of privatization are likely to fall heavily on corporate interests and lightly, if at all, on poor people.

Central American farmers will be forced to compete with cheaper agricultural exports from the United States. Though most families will benefit from the lower prices, about 16 percent of Guatemalan households that currently produce CAFTA commodities will suffer.

CAFTA is expected to create 300,000 new jobs for Central American workers in the textile, apparel and shoe industries. The jobs are badly needed, but clear labor regulations protecting those workers are conspicuously downplayed in the agreement.

On balance, CAFTA is riddled with problems. It will do more to enhance business opportunities for multinational corporations than it will to create jobs and export goods. But if it were rejected by Congress, it wouldn't be replaced by a new agreement that rectified CAFTA's flaws. Instead, the jobs it promised to needy people in Central America would be lost, most likely to China.

More important, in light of the serious unrest in Bolivia and the anti-American hostility being exported by the Venezuelan government, CAFTA shores up relationships with democratic U.S. allies in the region. By bolstering the CAFTA partners' economies to the tune of about $5 billion, according to a University of Michigan study, the United States counters criticism that it isn't interested in sharing its wealth with Latin Americans.

Finally, doing nothing isn't an option. Brazil has just joined several South American countries in a multibillion-dollar trade deal with China. China is currently flooding the United States with cheap clothing that isn't made from U.S. textiles, as CAFTA-manufactured apparel would be.

Congress should approve CAFTA, and then immediately begin refining a free trade philosophy that puts as much emphasis on protecting U.S. workers' wages as it does on protecting corporate profits, and as much energy into watching out for the environment and workers' rights as it does into protecting patents for prescription drugs.

The objective of future free trade agreements should be to create conditions that allow foreign workers to buy more American products, not just manufacture them.