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Day After Announcing Dubious "Stimulus" Package Aimed at Creating Jobs, Bush Administration Launces Talks to Expand Job-Killing NAFTA

After Millions of Layoffs During the Bush Recession and Massive Growth-Chilling Trade Deficit, President Pushes NAFTA Expansion to Central America

Jan. 7, 2003

WASHINGTON, D.C. – The Bush administration’s contempt for the plight of millions of Americans who have lost their jobs during the past two years was spotlighted today as the administration released a stimulus package favoring Wall Street over workers and prepared to launch North American Free Trade Agreement (NAFTA) expansion negotiations tomorrow. Formal negotiations of a proposed Central American Free Trade Agreement (CAFTA) begin Wednesday in Washington, D.C.

“Announcing this ‘stimulus’ package and then launching trade talks, which will export more American jobs and escalate the growth-killing U.S. trade deficit, is like tossing a cup of water into a leaky tub while yanking out the plug,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Talks between the office of the U.S. Trade Representative and trade ministers from El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica aim to spread the failed NAFTA model farther into the hemisphere. NAFTA has:

  • Turned the 1993 pre-NAFTA $1.7 billion U.S. trade surplus with Mexico into a $25 billion deficit, while the U.S. trade deficit with Canada has grown from $10.8 billion to $44.9 billion under NAFTA. Federal Reserve Chairman Alan Greenspan has called the trade deficit a significant drag on growth;
  • Eliminated nearly 1 million well-paying jobs and deteriorated the manufacturing base;
  • Impoverished the Mexico-border region in the United States, with many border cities now facing higher unemployment rates than before NAFTA;
  • Encouraged union-busting and depressed wages and benefits as companies threaten workers with the prospect of overseas moves, especially to Mexico; and
  • Granted transnational corporations the power under NAFTA’s Chapter 11 to claim reimbursement with taxpayer money (to date over $13 billion) for “future lost profits” when domestic public safeguards limit profitability.
The Bush administration has made CAFTA a priority as part of its jigsaw puzzle strategy to stretch the disastrous NAFTA model throughout the hemisphere with the proposed Free Trade Area of the Americas (FTAA), Wallach said. With growing opposition to the FTAA model in several key South American countries, the administration hopes to create momentum on FTAA with CAFTA.

“Launching CAFTA talks is not going to overcome opposition to NAFTA expansion in South America any more than tax breaks on dividends will replace more good jobs lost to NAFTA-style trade deals,” Wallach said.

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