DR-CAFTA: A Bad Deal for Poor Countries

By mborum

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Washington, DC—International agency Oxfam called on US Members of Congress today to reject the Free Trade Agreement between the United States and Central American countries and the Dominican Republic (DR-CAFTA.) Oxfam believes that the agreement, in its current form, will do more harm than good and will endanger the livelihood of thousands of small farmers who already live in poverty.

Oxfam joined numerous other non-governmental organizations and Members of Congress from both sides of the aisle at a press conference today, calling for the rejection of DR-CAFTA. The trade agreement is under consideration by both the House and the Senate and is expected to come up for a vote in the US Congress before the end of May.

"Fair trade rules and practices have the potential to lift millions of people out of poverty, as trade and development are intimately linked," said Stephanie Weinberg, Trade Policy Advisor at Oxfam. "But DR-CAFTA will only hurt these countries as it puts the needs of U.S. agribusiness, pharmaceutical companies and foreign investors above the basic needs of citizens in the region."

The U.S. trading partners in the DR-CAFTA region, with a population of 42.5 million, are the poorest countries in the hemisphere and have unequal distributions of income and wealth. They depend heavily on agriculture for the livelihood of significant portions of their populations. These countries are ravaged by curable diseases due to poverty and inadequate health-care coverage. They sorely lack public infrastructure and, in several cases, are highly indebted.

"Those who stand to lose in the DR-CAFTA are the ones who are already disadvantaged in these highly unequal societies, where the majority of poor people live in rural areas, rely on income from agriculture and must pay for medicines out-of-pocket," continued Weinberg. "Instead of establishing fair and equitable rules for trade, the agreement will institutionalize an uneven playing field."

The regional trade agreement will require these developing countries to open their markets to dumping of US rice and other commodities and forbid use of adequate safeguards to ensure food and livelihood security and rural development. DR-CAFTA imposes strict new rules that extend the monopoly held by brand-name pharmaceuticals, which will limit generic competition and reduce access to affordable medicines in the future. The trade agreement provides special rights and privileges to foreign investors that can create major new liabilities to governments and undermine efforts to protect public health, the environment, and workplace safety. DR-CAFTA also blatantly ignores the fact that US farmers receive extensive subsidies and domestic supports, estimated to be around $18 billion this year alone.

"DR-CAFTA is a bad deal for millions of farmers, workers, and consumers in Central America and the Dominican Republic and should therefore be rejected," added Weinberg. "Instead of pushing through bad deals like DR-CAFTA, the US should invest in the WTO and the Doha Round, as that is the best path to build a rules-based trade system that provides more opportunity and stability for both the US and developing countries."

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