Testimony Regarding the Central America Free Trade Agreement (CAFTA)

The International Labor Rights Fund (ILRF) would like to thank the Committee on Ways and Means, US House of Representatives for the opportunity to present testimony related to the Central America Free Trade Agreement (CAFTA). ILRF is deeply concerned about ongoing labor rights violations in Central America. We believe the agreement will force the developing nations of Central America to compete against one another to attract limited new US investment by offering low wages and foregoing enforcement of labor and environmental laws.

A strong and enforceable labor chapter might have served to mitigate this “race to the bottom.” However, as currently written, the CAFTA labor chapter will not serve to deter labor rights abuses, nor will it effectively deter national governments from downgrading their existing labor laws. Thus, as currently written, CAFTA can only lead to further degeneration of the labor rights situation in Central America, with no effective mechanism available to counteract downward pressures.