My husband asked me to research this for him. I've been reading many different opinions on this subject and I'm really just reading in circles now. I'm getting a little confused.
I'd really love your opinions on this topic. Can you break it down for me?
Will CAFTA be good for Americans? Will it be better for other countries?
Thanks!
Posted by Kwea (Member # 2199) on :
In the short term it will suck, I think, but the long term might make it worth it. It it a very complex issue.
Posted by TomDavidson (Member # 124) on :
As with all free trade agreements, laborers in the wealthier countries involved will suffer for about ten years, while businesses theoretically based in those same companies prosper. What everyone hopes is that those businesses prosper enough for that wealth to eventually find its way back to the laborers again.
Posted by Noemon (Member # 1115) on :
And of course, CAFTA is just a part of the overarching plan to crate an American free trade zone that would incorporate North, Central, and South America.
Posted by Jhai (Member # 5633) on :
It really wasn't as large an economic change as everyone is making it out to be.
From the Economist:
quote:CAFTA is a modest agreement between a whale (the United States) and six minnows (five nations of Central America—Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica—plus the Dominican Republic). The whale already admits about 80% of the minnows' exports tariff-free, and the Central American countries have already cut their average tariffs from around 45% in 1985 to about 7%.
It didn't elminate all tarrifs:
quote:CAFTA's strictures do not apply to several sensitive crops, such as white corn and Costa Rican potatoes and onions. And the agreement gives other goods, including dairy products, up to 20 years to phase out protection. This should give farmers plenty of time to adjust, even if it deprives the poor of cheaper milk in the meantime.
The title of the article is : "A small victory for free trade as CAFTA passes," which is a pretty accurate description. The whole article is short, and password protected, but you can feel free to use my login if you'd like:jharr@depauw.edu Password is: 12345
I personally feel, as most economists do, that free trade is pretty much always a good thing in the long-run. One needs to be careful not to rush things to fast, however, or there can be plenty of short-term misery. CAFTA seems to be a good deal, but not very significant except politically.