CAFTA: good for peace and democracy

By PDS | 23 April 2005

A new report from Ana Isabel Eiras, Senior Policy Analyst for International Economics in the Center for International Trade and Economics at The Heritage Foundation, supports the politically controversial U.S. - Central America Free Trade zone (DR-CAFTA).

Increasing economic opportunity and strengthening homeland security are two of the U.S. government's major goals. Advancing free trade is essential to reaching both of these goals. Hence, the Bush Administration and Congress should be praised for significantly advancing free trade with Australia, Morocco, Chile, and Singapore.

Now the United States has an even more important opportunity to expand trade with countries right on its doorstep through DR-CAFTA, a free trade agreement with the Dominican Republic, Costa Rica, Guatemala, Honduras, El Salvador, and Nicaragua. The Administration should push Congress to approve this free trade agreement promptly.

The DR-CAFTA countries have made enormous progress toward democracy and economic liberalization since the 1970s, when almost all of them were ruled by dictators and opposed free markets. In recent years, each of these countries has implemented positive institutional reforms.

Approving DR-CAFTA would 'lock in' these reforms and encourage these governments to institute additional reforms. The United States would benefit significantly from a more open, institutionally stronger Central America, not just because such reforms open a myriad of investment and trade opportunities to U.S. businesses and individuals, but also because they foster long-term peace and prosperity in the DR-CAFTA countries.

Download full report here.