A new deal

  • 29/06/2004

Five Central American nations and the Dominican Republic are expected to ink a trade pact with the us this month. Under the pact, known as the Central American Free Trade Agreement (cafta), many us exports of consumer and industrial goods will become duty-free in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. In return, the us market will open up to products from the six smaller countries.

" cafta will promote us exports to a large and important market, even as it supports continued openness and democracy in Central America,' said us trade representative Robert B Zoellick. In his opinion, "The fta will reinforce free-market reforms in the region, apart from strengthening the rule of law and sustainable development. Signing cafta will fulfil a vision of expanded economic opportunity and trade put forward by President (George) Bush.'

But many us Democrats, including presidential candidate John Kerry, feel that the pact's labour and environmental provisions are too weak. Critics from the public health sector assert that the agreement's strict intellectual property rights protection will make access to generic medications nearly impossible in the poorer nations. Supporters of the agreement, however, argue that it will spur economic development in impoverished regions, while creating opportunities for us exporters.

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