CAFTA: The Race to the Bottom

CAFTA, like NAFTA, would require its signatory countries to conform their domestic policies and practices to a broad array of non-trade dictates, for example regarding the regulation of service sector companies and foreign investors’ operations in other economic sectors operating within a signatory nation’s territory. It would require signatories to provide certain patent medicine and seed protections that have been criticized by health and consumer groups worldwide as undermining consumers’ access to these essential ‘goods.’ It even sets constraints on how countries and other political entities may spend their own tax revenues. In addition, CAFTA contains the same model of interconnected trade rules and foreign investor protections that together create incentives that motivate business operations seek out the most profitable sites and processes for production, even if these are often contrary to the public interest. An analysis of CAFTA’s provisions reveals that it replicated NAFTA’s provisions to a high degree – often with identical language. Thus, there is much that we can learn from the 11-year record of NAFTA, which CAFTA would expand to additional nations.

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