27 Jul 2005 Environmentalists’ Demonization of CAFTA is Unwarranted; Trade Liberalization Pact Would Invigorate Competition, Fight Poverty and Promote Positive Environmental Impacts

Objections leveled against the proposed Central American Free Trade Agreement (CAFTA) by the environmental establishment organizations are exaggerated and unfounded, according to The National Center for Public Policy Research.

CAFTA, a trade agreement to establish a virtual tariff-free zone among the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic, was approved 54-45 by the U.S. Senate June 30. A vote in the U.S. House of Representatives could come as early as this week.

Groups such as Defenders of Wildlife, Earthjustice (formerly the Sierra Club Legal Defense Fund), Friends of the Earth and others say CAFTA would undermine U.S. and Central American environmental standards. A report by the nonpartisan National Bureau of Economic Research (NEBR), however, refutes their assertion that relaxed trade barriers will privilege business interests at the expense of the environment.

“The hard environmental left’s demonization of CAFTA is unwarranted,” said National Center Policy Analyst Ryan Balis. “Reducing trade barriers not only invigorates competition, spurs needed development and fights poverty, it also, on balance, works for the good of promoting good environmental impacts.”

For example, according to NEBR’s report, an average 50 percent lifting of American trade barriers on manufactured goods between 1978-1994 coincided with a 51 percent increase in American manufacturing output and a 344 percent increase in imports from developing countries. And, contrary to the claims of the environmental left, imports manufactured through environmentally-detrimental processes actually dropped.

NEBR’s report, “Does the U.S. Outsource Polluting Industries?,” says there is “no evidence that domestic production of pollution-intensive goods in the U.S. is being replaced by imports from overseas.”

Also, the proposed CAFTA treaty includes a $15 million per year penalty on member governments failing to enforce their domestic environmental laws. Furthermore, an “Environmental Affairs Council” and independent arbitration group will be established to handle environmental concerns and disputes.

Balis adds: “The environmental left’s opposition to CAFTA is straight from the playbook of Al Gore-style alarmism.”

The National Center for Public Policy Research is a non-partisan, non-profit educational foundation based in Washington, DC. Founded in 1982, it was active on educating the public on the North American Free Trade Agreement (NAFTA).

For more information, contact Ryan Balis at (202) 507-6398 or email him at [email protected].