This page lists all the actions from the WDM website, in the order they were posted.
The European Union is currently rushing through secret negotiations on a trade deal with a group of Central American countries. This trade deal could increase poverty and inequality in a region where 40% of the population live off less than US $2 a day.
There is a crucial opportunity to put the brakes on the proposed trade deal. Several Central American governments are expressing reservations about the deal and we need to take action to demand European negotiators change their approach.
You can email the European negotiators who are involved in this deal and ask them to put the breaks on these negotiations.
Trade deals fuel poverty and inequality
Norma Maldonado, a trade campaigner from Guatemala, has joined with the World Development Movement to help stop this deal which could harm the poorest people in her region. Women, in particular, could be hardest hit by shrinking public services resulting from the deal.
Since 2007, the European Commission has been negotiating an agreement with a group of Central American countries (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, with Panama as an observer), a region where 40 per cent of people live on less than US$2 a day. The Commission is desperate to complete this deal and so is piling pressure on Central American countries to finalise it by June 2009.
Campaigners in Central America are doing all they can to stop this deal which could lead to more poverty and inequality in the region through:
Meanwhile, the negotiating texts remain secret, denying parliaments and citizens their right to meaningful democratic scrutiny of the deal. Nor has the formal sustainability assessment of the deal yet been completed. Women’s groups are especially concerned that there has been no consideration of the gender perspective.
A number of Central American governments are voicing significant concerns. In April 2009, the latest round of negotiations was cancelled when Nicaragua walked out; several other governments are reported to be unhappy with the negotiations.
Email the European negotiators who are involved in this deal and ask them to put the breaks on these negotiations.
Thank you for taking our action to put the brakes on the EU-Central America trade deal. Some people have received a response from the European Commission and while we are not encouraging people to get into a detailed debate with the negotiators about this deal, here are a few comments in response to their email.
The EU negotiators say:
the EU and all Central American chief negotiators… renewed their commitment to come to a rapid conclusion of this Agreement
The Nicaraguan government is now back at the negotiating table but concerns are still reported amongst some Central American governments. In particular, a new government will take over in El Salvador in June and negotiations should be halted so that Central American governments can “reach a common position” as our action states. Meanwhile, civil society and trade unions in the region remain very concerned and have issued new statements demanding a halt to negotiations in May 2009.
The EU negotiators agree
to study the creation of a financial mechanism dedicated to Central America's regional development
Of course, this can be welcomed, but such a mechanism must not become a ‘carrot’ to persuade governments that the negative impacts of the deal can be adequately dealt with simply by throwing some aid money at them.
The EU negotiators say:
the free trade agreement is beneficial for both Central America and the EU in terms of additional GDP growth.
However, the Sustainability Impact Assessment (SIA) uses flawed modelling processes to estimate the impacts of the deal. For example, the model ignores unemployment and the informal sector, both of which are very important in Central America and affect conclusions about job creation. Environmental impacts are also significantly underplayed as they are not fully explored in the SIA model.
There are significant concerns about this deal and its impact on the overall balance of the economy which simple GDP growth figures can mask. The preceding EU-Mexico trade deal is an illustration of this. Mexican exports to the EU grew after that trade deal was signed, but 59 per cent of Mexican exports are ‘intermediate’ goods ie. components originally imported into Mexico for assembly, and then re-exported as completed goods to the EU and US. In Mexico, there is now a dual economy whereby industrial zones operated by multinational companies carry out the assembly of such goods, yet have few links with the rest of the Mexican economy. Regulations which could make links with the local economy, such as requirements on multinational companies to ensure skills and technology are transferred, are generally banned under these trade deals. Central American governments need to consider very carefully if this kind of development model is one that they want to follow.
The EU negotiators say that it:
endeavours to keep civil society adequately informed of the ongoing negotiation processes.
Yet the negotiation texts are not public and it is impossible to really get a sense of what is being discussed. It remains the case that no gender impact assessment has been carried out on the deal. Even though at least five Central American countries are involved in this deal, the SIA consultation with civil society in Central America consisted of one event in one country. Not all SIA draft documents have been provided in Spanish.
The EU negotiators say:
we are negotiating a full-fledged chapter specifically devoted to Trade and Sustainable Development.
This is true but it is without binding obligations for companies and investors. It is only about respecting ‘principles’ (not legal conventions), with no enforcement mechanism. As the chapter is totally separate from the rest of the agreement, it falls outside the scope of the dispute settlement mechanism. Essentially it is an “add-on” to try to please concerned citizens, in practice it does not change anything about the nature and impacts of the agreement.
The EU negotiators say:
our assessment is that more competition in [the banking] sector of the economy, due to some degree of liberalization, will be indeed beneficial for both small businesses and individual citizens.
However, this flies in the face of research conducted for the IMF which indicates that:
foreign bank presence in poor countries is associated with less access to financial services, as measured by the size of the branch network, number of loans, and number of deposits.
Email the European negotiators who are involved in this deal and ask them to put the breaks on these negotiations.