CAFTA and Dr. CAFTA




"Every member of Congress who votes for CAFTA is voting to abdicate power to an international body in direct violation of the Constitution."

"When we grant quasi-governmental international bodies the power to make decisions about American trade rules, we lose sovereignty plain and simple."

"I encourage every conservative and libertarian who supports CAFTA to read the ILO declaration and consider whether they still believe the treaty will make America more free."


The Dominican Republic–Central America Free Trade Agreement, commonly called DR-CAFTA (pronounced "Doctor Cafta"), is a free trade agreement (legally a treaty under international law, but not under US law). Originally, the agreement encompassed the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and was called CAFTA. In 2004, the Dominican Republic joined the negotiations, and the agreement was renamed DR-CAFTA.

The United States Senate approved the DR-CAFTA on 6.20.05 by a vote of 54-45, and the House of Representatives approved the pact on 7.27.05 by a vote of 217-215, with two representatives not voting. For procedural reasons, the Senate took a second vote on CAFTA on 7.28.05 and the pact garnered an additional vote from Sen. Joe Lieberman — who had been absent — in favor of the agreement.

The implementing legislation became Public Law 109-053 when it was signed by President George W. Bush on 8.2.05.

CAFTA "negotiations" between the US and Central American countries were held behind closed doors. The public was not able to participate in these deliberations, and had little or no input in the original text. Only after it was narrowly approved by the US Congress, and after "negotiations" had finalized, was the text made available to the Central American population. These closed door meetings are a source of skepticism and outrage amongst Iowa farmers - those of the GOP and the liberals as well.

Congressman Ron Paul (R-Texas):
"The Central America Free Trade Agreement, known as CAFTA, will be the source of intense political debate in Washington this summer. The House of Representatives will vote on CAFTA ratification in June, while the Senate likely will vote in July.

I oppose CAFTA for a very simple reason: it is unconstitutional. The Constitution clearly grants Congress alone the authority to regulate international trade. The plain text of Article I, Section 8, Clause 3 is incontrovertible. Neither Congress nor the President can give this authority away by treaty, any more than they can repeal the First Amendment by treaty. This fundamental point, based on the plain meaning of the Constitution, cannot be overstated. Every member of Congress who votes for CAFTA is voting to abdicate power to an international body in direct violation of the Constitution.

We don’t need government agreements to have free trade. We merely need to lower or eliminate taxes on the American people, without regard to what other nations do. Remember, tariffs are simply taxes on consumers. Americans have always bought goods from abroad; the only question is how much our government taxes us for doing so. As economist Henry Hazlitt explained, tariffs simply protect politically-favored special interests at the expense of consumers, while lowering wages across the economy as a whole. Hazlitt, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and countless other economists have demolished every fallacy concerning tariffs, proving conclusively that unilateral elimination of tariffs benefits the American people. We don’t need CAFTA or any other international agreement to reap the economic benefits promised by CAFTA supporters, we only need to change our own harmful economic and tax policies. Let the rest of the world hurt their citizens with tariffs; if we simply reduce tariffs and taxes at home, we will attract capital and see our economy flourish.

It is absurd to believe that CAFTA and other trade agreements do not diminish American sovereignty. When we grant quasi-governmental international bodies the power to make decisions about American trade rules, we lose sovereignty plain and simple. I can assure you firsthand that Congress has changed American tax laws for the sole reason that the World Trade Organization decided our rules unfairly impacted the European Union. Hundreds of tax bills languish in the House Ways and Means committee, while the one bill drafted strictly to satisfy the WTO was brought to the floor and passed with great urgency last year.

The tax bill in question is just the tip of the iceberg. The quasi-judicial regime created under CAFTA will have the same power to coerce our cowardly legislature into changing American laws in the future. Labor and environmental rules are inherently associated with trade laws, and we can be sure that CAFTA will provide yet another avenue for globalists to impose the Kyoto Accord and similar agreements on the American people. CAFTA also imposes the International Labor Organization’s manifesto, which could have been written by Karl Marx, on American business. I encourage every conservative and libertarian who supports CAFTA to read the ILO declaration and consider whether they still believe the treaty will make America more free.

CAFTA means more government! Like the UN, NAFTA, and the WTO, it represents another stone in the foundation of a global government system. Most Americans already understand they are governed by largely unaccountable forces in Washington, yet now they face having their domestic laws influenced by bureaucrats in Brussels, Zurich, or Mexico City.

CAFTA and other international trade agreements do not represent free trade. Free trade occurs in the absence of government interference in the flow of goods, while CAFTA represents more government in the form of an international body. It is incompatible with our Constitution and national sovereignty, and we don’t need it to benefit from international trade."
Congressman Ron Paul (R-Texas) on 6.7.05 ( seven weeks before the final vote of 217-215 in The House of Representatives )

Prominent among the critics of CAFTA is economist Joseph Stiglitz, who supports free trade, but argues that without fairer trade agreements, the benefits from trade will not be realized. He says that NAFTA and CAFTA will increase poverty because they prematurely open markets to US agricultural goods which are subsidized, making local farmers unable to compete with imports, and the nations in question do not have the ability to bear the costs of switching resources with their available capital, nor deal with the consequences of even short-term unemployment. He argues that these agreements have been more geo-political than economic, and that the essential problem with recent bilateral agreements, including CAFTA, is not that they are not free-trade agreements. More generally, he argues that bilateral agreements fail to produce all the benefits expected, in part because of the inequality of the negotiating position of the parties involved.

We encourage your support for Ron Paul at the Iowa Republican straw poll on August 11 toward his GOP nomination for President of these United States.

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