Calling CAFTA bullshit

When the Wall Street Journal runs an editorial that criticizes a Bush administration priority, it always catches the eye. The arguments it makes are pretty standard, but I think it's the most convincing anti-CAFTA piece I've seen thus far. I'm normally very pro-trade, but CAFTA appears to have almost none of the benefits of a good free trade agreeement. Unfortunately, it's too little too late. The article starts by calling bullshit on the China claim:

Tony Villamil insisted that "if we don't do this China and the European Union will step into the breach and we will lose business and influence on our doorstep."

That's utter nonsense. In 2003, China's share of the Cafta market was just 3%, up one point from 1998. The EU share, which had been 8% in 1998, also rose in 2003 by one point. Japan's share -- the bogeyman of past years and fears -- actually fell from 4% in 1998 to 3% in 2003. Meanwhile, as the chart nearby also shows, the dollar-value of America's 40-plus per cent share of the Cafta market has steadily risen to its present $15 billion.

Furthermore, the benefit for agriculture in Central America will be minimal because the agreement does not remove protections for sugar, which is the one product that really matters:

And if the experience of Mexico's farmers with Nafta is any guide, we'll have to expect more pain among Cafta's farmers. Theirs is a tiny market, but however small, they won't be able to compete against the lower prices of U.S. farm exports.

Sure, some individual but small Cafta exporters may eventually benefit; but as we all know, one of the region's principal products -- sugar -- will gain hardly at all. That was also Australia's experience in its "Free Trade Area" deal with the U.S., when Trade Minister Mark Vaile bitterly complained both that it "failed to include sugar" and that its openings for farm goods were "the smallest and slowest of any trade pact Washington had ever written."

And finally, a preferential trading agreement like CAFTA sends the wrong message about the United State's attitude toward free trade to the rest of the world:

We say we are pro "free trade," but we continue to undermine the WTO's genuinely global Doha Round by pressing for special blocs in this hemisphere. And we further undermine essential U.S. economic and security interests by encouraging the rise of blocs in regions that remain of profound importance to the U.S. That's something to ponder as Cafta moves closer to final approval, and in the light of clear evidence that it brings little if anything new to America's table.

I know, I know, it doesn't matter anymore since CAFTA's already gone through. It's still quite amazing that the WSJ is willing to put something so opposed to the party line in a place normally reserved for hackery, and this likely speaks to the low quality of the agreement.