CAFTA’s Threats to U.S. Independence

(with supporting quotes directly from the CAFTA agreement as publicly available on ustr.gov)

STOPCAFTA.com

June 29, 2005

• CAFTA’s role as steppingstone to hemispheric integration and the Free Trade Area of the Americas (FTAA). “[The governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States of America] resolved to: … CONTRIBUTE to hemispheric integration and provide an impetus toward establishing the Free Trade Area of the Americas.” (CAFTA Agreement, Preamble)

• CAFTA’s subservience to the World Trade Organization (WTO). “[The governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States of America] resolved to: … BUILD on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization…. The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 [WTO] and Article V of the General Agreement on Trade in Services [WTO], hereby establish a free trade area…. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement….” (CAFTA Agreement, Preamble and Chapter 1)

• Loss of U.S. independence to the supranational CAFTA Free Trade Commission. “The Parties hereby establish the Free Trade Commission, comprising cabinet-level representatives of the Parties…. The Commission shall: (a) supervise the implementation of this Agreement; (b) oversee the further elaboration of this Agreement; (c) seek to resolve disputes that may arise regarding the interpretation or application of this Agreement; (d) supervise the work of all committees and working groups established under this Agreement; and (e) consider any other matter that may affect the operation of this Agreement.” (CAFTA Agreement, Chapter 19)

• Loss of U.S. independence to World Bank and United Nations tribunals under CAFTA. “Provided that six months have elapsed since the events giving rise to the claim, a claimant may submit a claim … (a) under the ICSID Convention [World Bank’s International Centre for Settlement of Investment Disputes (ICSID)] and the ICSID Rules of Procedures for Arbitration Proceedings, provided that both the respondent and the Party of the claimant are parties to the ICSID Convention; (b) under the ICSID Additional Facility Rules, provided that either the respondent or the Party of the claimant is a party to the ICSID Convention; or (c) under the UNCITRAL Arbitration Rules [United Nations Commission on International Trade Law arbitration rules].”  (CAFTA Agreement, Chapter 10)  “A Party shall be deemed to be in compliance … if it is a party to and is in compliance with the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards….” (CAFTA Agreement, Chapter 20)

• Loss of independence of U.S. federal, state, and local governments to regulate service professions and businesses to CAFTA’s “Cross-Border Trade in Services” provisions. “Cross-Border Trade in Services … applies to measures adopted or maintained by a Party affecting cross-border trade in services by service suppliers of another Party. Such measures include measures affecting: (a) the production, distribution, marketing, sale, and delivery of a service; (b) the purchase or use of, or payment for, a service; (c) the access to and use of distribution, transport, or telecommunications networks and services in connection with the supply of a service; (d) the presence in its territory of a service supplier of another Party; and (e) the provision of a bond or other form of financial security as a condition for the supply of a service…. For purposes of this Chapter, “measures adopted or maintained by a Party” means measures adopted or maintained by: (a) central, regional, or local governments and authorities; and (b) non governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities…. National Treatment 1. Each Party shall accord to service suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to its own service suppliers. 2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level of government to service suppliers of the Party of which it forms a part…. Most-Favored-Nation Treatment Each Party shall accord to service suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to service suppliers of any other Party or a non-Party…. Local Presence No Party may require a service supplier of another Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.” (CAFTA Agreement, Chapter 11)