Can we see benefits of DR-CAFTA?

It has been almost two years since the Central American Free Trade Agreement between the United States and Central American countries and the Dominican Republic went into effect for El Salvador. A recent article by Raul Guttierez at IPS collects a wide variety of statistics about economic activity linked to the treaty. At this point, it's still difficult to see net positives or negatives:
The Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States was supposed to enable El Salvador to increase its exports to the U.S. market and attract foreign investment. However, economists consulted by IPS said that is "unrealistic" and that ordinary Salvadorans are still waiting for the promised benefits.

René Salazar, head of the Administration of Trade Treaties, said DR-CAFTA was El Salvador’s "most important trade agreement" because it has promoted increased trade with the United States.

Non-traditional Salvadoran exports to the U.S. of products such as seafood, agribusiness goods, beverages and ethnic foods grew by 68 percent in 2006, according to Salazar. Complete figures for 2007 are not yet available, but the trend has remained steady, he said.

El Salvador’s total exports, including traditional products like coffee, sugar and shrimp, amounted to 3.66 billion dollars between January and November 2007, 4.3 percent more than in 2006. The U.S. continues to be the main destination: in 2006, exports to the U.S. alone totalled 2.01 billion dollars.

Salazar told IPS that direct investment by the U.S. in this country grew from 1.049 billion dollars to 1.059 billion between March and December 2006, mainly in agribusiness, computer software and call centres, although he did not know how many of these have closed down since DR-CAFTA came into force. (rest of article with more stats)


Anonymous said…
I read the whole article at the IPS site, and I noted that the effects of DR-CAFTA on small agricultutral producers (non-agribusiness) has been quite negative, according the the organization representing producer coops. So I think some of the evidence on DR-CAFTA is in, and is pretty clear.
Anonymous said…
"Who Will Turn the lights off? El Salvador's Youth Exodus"

CAFTA Casualties: Free trade deals like CAFTA (Central American Free Trade Agreement) have had a devastating impact on El Salvador’s small farmers and have helped push 100,000 Salvadorans per year to immigrate to the United States.Photo by Judy Walgren, FAACA.NET

USULUTÁN, El Salvador—El Salvador is a poor country whose major export is people. From recently living there, I’ve seen firsthand what’s driving people north — and why conventional political solutions aren’t going to deter desperate Salvadorans and others like them from coming to the United States. Largely missing from this year’s presidential campaign is any serious reappraisal of our foreign, military, and trade policies that have forced millions of Latin Americans to uproot themselves and seek opportunities for a better life far from home.

On the presidential campaign trail earlier this year, free trade critics failed to link corporate globalization, trade deregulation and the forced relocation of people throughout the hemisphere. While courting blue-collar workers in farm states and the Rust Belt in the United States, former Democratic senator John Edwards frequently denounced the North American Free Trade Agreement (NAFTA) — and its new Central American counterpart, CAFTA — as “trade laws that send American jobs overseas.”

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