Guatemala ratifies free trade agreement with the US

The MS partner CEIBA describes the agreement as a cul-de-sac and a "butchering knife stuck into national sovereignty" as native seeds will be driven out of the market by new genetically modified types.

By Lone Hvass, MS Guatemala

14. March 2005

(Guatemala City, 14 March 2005)
In spite of massive popular protest, Guatemala’s Parliament succeeded yesterday in ratifying a the free trade agreement with Central America, the US and the Dominican Republic, DR –CAFTA. Thus Guatemala became the third country in the Central American region to ratify the agreement, following El Salvador (December 2004) and Honduras which ratified it last week.

Of the 158 MPs, 126 voted in favour, 12 against and 20 abstained. The free trade agreement only made it to the second hearing upon which it was adopted as a matter of national urgency.

Putting the horse behind the carriage

The free trade agreement which was signed in May last year has been the object of constant propaganda both from proponents and opponents but little in terms of impartial analysis and impact study with regard to future consequences. Analyses of this kind are expected to be revealed next week when no less than 15 expert studies commissioned by Parliament will be presented to the public – albeit after ratification. 

The journey of the free trade agreement from conception to birth has been like that of a comet as the Central American nations have had only a year to negotiate it with the giant neighbour in the North, the US. By itself, this time span has not contributed to a decent process of public hearings, but in theory a sovereign state is entitled to request that deadlines of this nature be postponed. 

Rational requests to postpone negotiations were raised during 2004 by civil society organizations, among these the MS-supported Central American lobby network CID, but the Guatemalan government has pushed for a speedy ratification of DR-CAFTA right from the beginning. 

There is one mitigating circumstance relating to Guatemala’s ratification of DR-CAFTA. Recognizing that the agreement will have ample consequences for most sectors of the country’s population, a legislative agenda comprising 15 bills has been agreed upon to control its effects as it enters into force. These relate to agriculture, improvements in the health and educations sectors, as well as a bill on new salary policies, i.e. the determination of a new minimum wage. 

Winners and losers 

One may well question which sectors of the Guatemalan economy will benefit from DR-CAFTA although there is not a shred of doubt as to who will be the big international winners: transnational corporations, especially the medical industry and firms specializing in agro-chemical products.

As the Central American economies are rather tiny in comparison with other markets, one may also wonder at the haste with which the US government has pushed for countries to ratify it. Word has it that the American Ambassador, John Hamilton, wanted to add a free trade agreement with Central American nations to his personal list of results to make up for his limited success in negotiating deals about exploring underground resources in Peru. 

In addition, some commentators are pointing to a filthy deal between the official party, GANA, and the biggest party in Guatemala, FRG which was founded and is still controlled by ex dictator Rios Montt. Allegedly, FRG MPs have agreed to vote in favour of DR-CAFTA in the understanding that impunity will prevail for the old dictator. 

The losers, regardless of the new supposedly mitigating bills, are likely to be small and medium sized producers that are not ready for competition with their counterparts in the North. 

Resistance: farmers, unionists and a few chirpings from the Left

Resistance towards DR-CAFTA has found its most articulate expression among farmers and unionists. 

Mesa Global, an association of social organizations including the MS partner CEIBA, describe the agreement as a cul-de-sac and reason their resistance by saying that the agreement was negotiated at the speed of lightning and behind closed doors. It is being said that the agreement is the equivalent of a butchering knife being put into national sovereignty, especially in the area of food security, as native seeds will be driven out of the market by new genetically modified types. 

Victor Manuel Sales Ortiz, MP for URNG (Unidad Revolucionaria Nacional de Guatemala / National Revolutionary Unity) sums up his points of view as follows; the agreement is beneficial for a small group within the financial sectors of Guatemala and the US while it is detrimental to the peoples of both countries; Guatemala’s government has led its people astray by shrouding negotiations in secrecy; it is disrespecting ILO Convention 169 by not consulting with the local population; nothing obliges the Guatemalan government to ratify the agreement as a matter of national urgency; the agreement threatens to extinguish the native seeds because of the intellectual property rights; it incongruent with the national Constitution as well as several international Conventions to which Guatemala is party; and it buries forever the feasibility of carrying out the reforms stipulated in the 1996 peace agreements. 

The Left in Guatemala, however, has little resonance and was condescendingly called "an irrational dwarf" recently in one the major dailies. 

The democratic process in Guatemala

Guatemalans have been used to an authoritarian style in both peace and war time. Dialogue between parliamentarians and the population is scarce, entailing as a consequence marches, demonstrations and not so legal methods such as occupying Parliament whenever legislation goes against the strain of the people’s will. 

In the month of May last year and for the first time in history, Parliament organized public hearing for which the MS partner organization Accion Ciudadana had provided technical assistance. The matter at stake at the time was a fiscal reform which has yet to materialize. Even so, the exercise revealed that civil society organizations are indeed capable of producing constructive proposals and contribute to a qualified national dialogue about the country’s realpolitik. Supported by MS, the continued exercise will consist in maintaining these encounters between the people and their elected representative in order to contribute to the development of a democratic political culture.