Wednesday, January 09, 2019

Taking Aim at CAFTA

As Donald Trump went after NAFTA, I kept wondering why he didn't say much at all about free trade agreements with other Latin America. Now the administration is taking aim at CAFTA-DR. And it's all about China.

“We are very concerned with Nicaragua’s move toward authoritarianism, and El Salvador’s and Dominican Republic’s questionable ties with China,” the official said. “As the United States has made clear, we will not allow our trade agreements, including CAFTA-DR, to become back doors to benefit non-market economies and repressive actors in the region.”
By "questionable" the official means "we told them not to and they did anyway." It's dangerous to view Latin America primarily through a Chinese lens, however. As I've written countless times, the U.S. has to be cognizant of unintended consequences. Punishing Central America at the precise moment you're talking about trying to resolve the immigration issue is counterproductive, to say the least.

Kicking Nicaraguans when they're down will make their lives worse without necessarily hurting the regime enough to prompt any change. In the case of El Salvador, if the economy stagnates then people will come in greater numbers to the United States. One could imagine Nicaraguans eventually doing the same.

Unfortunately, Central America is long accustomed to being a pawn between large powers that don't care about its well-being.


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