U.S. Trade Representative Robert Zoellick and trade ministers from five Central American countries signed the agreement in a ceremony at the Organization of American States.
"[CAFTA] is the framework for the future of our people," Alberto Trejos, minister of Foreign Trade for Costa Rica, told a packed ballroom at the OAS. "It will contribute to the process of economic integration in the region."
CAFTA is aimed at expanding trade between the United States and the Central American countries of Nicaragua, Guatemala, Honduras, El Salvador and Costa Rica. Both houses of Congress need to sign the agreement for CAFTA to become policy.
Discussions about including the Dominican Republic in CAFTA are still ongoing in Congress, according to the USTR, but plans are to include the Dominican Republic in the version of the agreement that would be submitted to Congress.
The USTR holds that CAFTA would open Central-American markets to goods from the United States by reducing trade barriers such as tariffs, while also promoting transparency and expanding business opportunities in Central America.
After Mexico, the block of five countries and the Dominican Republic make up the second-largest export market for the United States in Latin America, according to the USTR. The value of trade between the six countries and the United States was more than $30 billion in 2003, according to the USTR.
Zoellick evoked the past relationship between the United States and Central America with references to U.S. involvement in Central American countries during the Cold War.
"The interventions were frustrating for all sides," he said. CAFTA would mark "a new chapter" in U.S.-Central American relations and would put the two sides "on a more solid and mutual foundation," he said.
Marcio Cuevas, Minister of Economy for Guatemala, said CAFTA would help his country and the region "overcome the scourge of poverty.
"[CAFTA] will increase the capacity of our economy to create small, medium and large businesses, especially in rural areas," Cuevas said.
Rep. Cass Ballenger, R-N.C., said CAFTA's future is uncertain given the new Congress that will result from the upcoming elections in November. Though he said, "We will have the votes to pass it," he later added, "I do not see a vote before the November election, but I do hope it will occur soon after."
Several of the speakers at the signing addressed the objections raised by CAFTA's critics. These criticisms include concerns about the environment and labor rights.
"Nothing in CAFTA is detrimental to the labor sector," said Miguel Lacayo, the Minister of Economy for El Salvador. "[CAFTA] has already provided a boost to the labor rights of our region."
About 20 demonstrators gathered outside the OAS during the ceremony to protest the signing. They chanted, "Make trade fair," and several carried a banner that read "Globalize justice, not poverty."
The demonstration was organized by anti-poverty and social-justice groups, including the Britain-based Oxfam and the Washington, D.C.-based Mobilization for Social Justice.
Even before the signing of the agreement, several organizations released statements condemning CAFTA.
The AFL-CIO opposed the agreement, saying it would hurt workers in the United States and the Central American countries included in CAFTA.
"[CAFTA] would extend to Central America the disastrous job loss and environmental damage caused by the North American Free Trade Agreement," according to the AFL-CIO statement.
"CAFTA would benefit multinational corporations that want to manufacture goods in foreign sweatshops with low-wage labor and then sell us those goods at huge profits," AFL-CIO Executive Vice President Linda Chavez-Thompson said in the statement.
In a strongly-worded statement, Public Citizen, a consumer advocacy organization, accused the Bush administration of trying to slip the agreement by the public by holding the signing on a holiday weekend while Congress is in recess.
"CAFTA is the linchpin of a trade agenda written by Bush campaign backers representing utility companies, drug companies and Wall Street, and carried out by its servants in the Office of U.S. Trade Representative," Lori M. Wallach, Director of Public Citizen's Global Trade Watch, said in the statement.
The Alliance for Responsible Trade also issued a statement condemning CAFTA.
"CAFTA ... simply duplicates the failed NAFTA model, giving foreign investors new rights without requiring any responsibilities on their part to the communities in which they operate," Karen Hansen-Kuhn, coordinator of ART, said in the statement.
Several members of Congress also issued statements opposing CAFTA. A statement from U.S. Representatives Charles Rangel, D-N.Y.; Sander Levin, D-Mich., and Xavier Becerra, D-Calif., called CAFTA "a lost opportunity" that would not help Central American countries overcome poverty.
"A free trade agreement with those countries represented ... a key test to create jobs for workers and new opportunities for businesses and farmers in all our countries, to help bring people out of poverty and to serve as a model for integration throughout the hemisphere," the statement said. "On a number of key issues, the CAFTA ... fails these tests."
CAFTA is regarded by many as a step toward a Free Trade Area of the Americas agreement, which would include the United States and 33 countries in South America and Latin America.
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