CAFTA Essay

This essay has a total of 1186 words and 5 pages.

CAFTA

CAFTA
CAFTA is a proposed international free trade agreement between the United States and
numerous countries within Central America. Some of the nations who could potentially
participate in this treaty are Costa Rica, El Salvador, Guatemala, Honduras, and
Nicaragua. This proposed agreement stems primarily from the fact the United States relies
on Central America as a primary export market. In fact, it is believed this area of world
is Americas 18th largest export target. Another contributing factor to the proposed
agreement comes from what is believed to be an unfair trade policy. During the presidency
of Ronald Reagan, Central American countries had many tariffs slashed under what is known
as the Caribbean Basin Initiative. This initiative allowed around 74% of all exports to
America to arrive duty free. Meanwhile, U.S. goods entering their region faced of much
deeper import duty of roughly 10%. All in all, the U.S. government believes this act will
solidify democracy and level the playing field for future products produced by the United
States.

From the very beginning, The United States has gone to great lengths to express the upside
to altering this existing policy. The country takes the stand that this will benefit both
parties by allowing greater access to the U.S. market. The U.S. has also continually used
the North American Free Trade Agreement (NAFTA) as a model for the policies potential
success. Current government leaders contend CAFTA will benefit all American consumers buy
opening up a broader spectrum of trade. They also believe putting this policy into action
will promote a more modern concept of trade in Central America, allowing the region to
continue in economic development and democratic governance.

Perhaps the biggest benefit occurring from CAFTA would be the eventual promoting of U.S.
exports. Opening this trade agreement would broaden the spectrum in which U.S. goods are
bought and sold. This of course would widen the market allowing for a stronger American
economy as a result of a bigger consumer base. Furthermore, a bigger consumer base
overseas creates a direct result of a need for more production here at home. In the
simplest of terms, that means more jobs here there for creating a stronger economy.
Besides all the numbers and economic figures, America also benefits by spreading the
philosophies of democracy. The United States has always been and always will be on a
mission to spread democracy throughout the world. By having nations worldwide adopt such
programs as free trade, they also are more likely to convert into a democratic government.

The United States also takes the position that a free trade agreement will help introduce
Central America into the modern world. Many countries south of the border still relay
heavily on small farms and independent growers for much of the nations fiscal identity.
The U.S. stands firm in the belief CAFTA would allow Central America to adapt to a more
modernized economic system, which would in turn create growth and prosperity for the
countries and their respective people. It is our government's belief CAFTA would create
stability in an otherwise up and down area of the world. Going off the belief that our
economic system is a cycle highly dependent on cooperation from other nations, this means
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