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Anti-Sweatshop Activist and Chief Nicaragua Negotiator on CAFTA Debate Central America Free Trade

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We host a debate on the U.S.-backed Central American Free Trade Agreement between veteran anti-sweatshop activist Charles Kernaghan of the National Labor Committee and Nicaragua’s chief negotiator on CAFTA, Carlos Sequeira. [includes rush transcript]

President Bush has made passage of the U.S.-Dominican Republican-Central American Free Trade Agreement, or CAFTA, among his top priorities this year. Like NAFTA did for the U.S., Mexico and Canada, the trade agreement would end most tariffs and import restrictions on trade between the United States and six Latin American Countries–Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.

CAFTA is scheduled to be considered by the Senate Finance Committee next week and the House may vote on it in the next month. President Bush has intensified his campaign to pass the agreement in the last week. He has met with Democrats in Congress to convince them to support the agreement. And yesterday, in an effort to shore up votes for the pact, the administration pledged to devote more money to improving labor rights in Central America. But so far only four Democrats have announced their support for CAFTA.

On Monday in a speech to the Organization of American States, Bush linked CAFTA to his broader hemispheric agenda. He said, “When people throughout the Americas see their lives improve and opportunity more abundant, their faith in democracy will grow and our hemisphere will be more secure.” However, opposition to CAFTA has come from an array of business and labor groups. Critics of the agreement say it does not provide enough protection for the environment and workers and could worsen the trade deficit. Opponents in Central America are concerned that CAFTA could hurt small farmers and lead to the privatization of public services.

We host a debate on CAFTA:

  • Carlos Sequeira, CAFTA Negotiator for Nicaragua and Professor at INCAE Business School, a Harvard Affiliated Business School in Nicaragua.
  • Charles Kernaghan, Director of the National Labor Committee.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Today, a debate on CAFTA. We are joined in our studio by Charles Kernaghan. He is the Director of the National Labor Committee. We are also joined on the telephone by Dr. Carlos Sequeira. He is the chief CAFTA negotiator for Nicaragua. We welcome you both to Democracy Now! I’d like to begin with Carlos Sequeira. Why do you think CAFTA is good.

CARLOS SEQUEIRA: Well, generally speaking, there is a very fair amount of evidence everywhere in the world that trade enhances freedom and enhances prosperity for all parties involved. That evidence has been built up since the times of Marco Polo, and can be found everywhere, anywhere in time. I think we cannot fight history. We cannot fight a phenomenon that is happening, which is called globalization, and instead of fighting the unavoidable, the best thing to do is to embrace it in order to gain benefits for all parties involved, particularly when we are talking about improving the conditions for people that have been living in poverty for centuries.

AMY GOODMAN: Charlie Kernaghan, your response?

CHARLES KERNAGHAN: Well, actually, what’s happening is that the workers tell us they’re going backwards. Their wages are going down over the last two or three years. They’re sinking deeper into misery, deeper into poverty. Their rights are being violated every single day.

For example, there’s a large auto parts manufacturer in Nicaragua, a company called Arnecom. It’s a Japanese-Mexican conglomerate making wire harnessing systems for Ford, for Toyota and Nissan, sent to the United States. 5,000 workers — the plant opened about two-and-a-half years ago. The workers were promised $50 a week as a wage, told it would be a good job. They actually got 44 cents an hour, $21.21 cents a week, starvation wages. You cannot live on that. To get the job you have got to take mandatory pregnancy tests. The workers speak about excessive heat in the factory, excessive production goals, 1,000 pieces an hour.

Conditions were so bad in this high-tech factory that on February 3rd the workers went on a spontaneous walkout. All workers in three different factories went out on strike. They stayed out for two-and-a-half days. They occupied the factory, no food, no water. Out of that struggle, they won a three cent wage increase to 47 cents an hour. They’re still broken. 47 cents an hour, $22.73 a week. And what happened was, the workers tried to organize a union. The company formed a “yellow” union. The workers came back and tried to organize an independent union on May 29. May 31, three of the union leaders were fired, and now they’re fighting for reinstatement.

So what we are seeing is that CAFTA is leaving behind workers, leaving behind wages, leaving behind worker rights. It will just leave — it will nail in place the mandatory pregnancy test, the forced overtime, the lack of respect. Their security guards in the factory — if a worker even leans against the wall — they’re on their feet eight or nine hours a day — if a worker even leans on the wall, the guards come over and poke them and make them get up. In other words it is going to leave behind the workers. This is why they oppose it

AMY GOODMAN: Carlos Sequeira, your response?

CARLOS SEQUEIRA: Okay, thank you. I appreciate the opportunity because this is a great example of how to reflect on things that are not accurate at all in order to make a statement. I’m reading now that last night there was a tremendous shooting in the city of Detroit. And if you look at the statistics, there is a shooting in the city of Detroit every single evening. Can I generalize based on that that you cannot go to Detroit because you would be exposed to crossfire? I think that is not correct.

I think there is an agreement everywhere among intellectual people that you cannot generalize based on specifics. You have to look at general trends, at general conditions. There are companies that violate rights of labor, and there are companies that honor rights of labor. We have in Nicaragua, since my opponent mentioned my own country, we have to create 2.5 million new jobs in the next 15 years because we are — we have to provide opportunities to people that are not just a statistical trend, but people who are already born and have a name and a last name. We have to provide it, and in order to do that we have to attract direct foreign investment. We have been able to develop new jobs, to open new plants, to create new positions for people who need a job.

AMY GOODMAN: What about protection of human rights and labor rights?

CARLOS SEQUEIRA: I beg your pardon?

AMY GOODMAN: What about protection of labor rights?

CARLOS SEQUEIRA: I think labor conditions can be improved, by definition, can be improved anywhere, in Nicaragua, the United States or Vatican City, by definition, but I think that CAFTA precisely provides the incentive and the means to make that improvement. So instead of putting those rights backward, I think, provides the opportunity to make a serious improvement.

AMY GOODMAN: Charles Kernaghan.

CHARLES KERNAGHAN: Well, I mean I think it’s very important to pay attention to specifics, because that’s where the facts are. And there was another factory in Nicaragua called King Yong. And it was miserable conditions. They were producing clothing for Wal-Mart. They were getting 9 cents for every Wal-Mart garment they sewed, 15-hour work shifts, again the pregnancy test, excessive heat, workers being yelled at, screamed at, beaten. The workers tried to organize, March 22, 2004, and three days later, the firing started. And eventually 400 workers were fired. And at this point, the Minister of Labor actually tried to do the right thing in Nicaragua, and they called for the reinstatement of the fired union leaders who were legally elected. And the company just said to them, “Not this union. We’re never taking them workers back.” The Ministry of Labor cited the company for excessive overtime. And the company actually responded to the Ministry of Labor, “You only think they’re working overtime. They are actually socializing in the factory. They like it so much, they stay at night and they talk to each other, that’s why they’re checking out late.” It’s idiotic. There’s no respect for worker rights, no respect for human rights. CAFTA as it stands, it just says to the governments, you should enforce your labor laws. It doesn’t even bring those labor laws into compliance with I.L.O. standards.


CHARLES KERNAGHAN: The International Labor Organization of the U.N., which has set internationally recognized worker rights standards like freedom of association, the right to organize. It doesn’t even bring these country’s labor codes into compliance with these international standards. And on top of it, the enabling legislation in these countries is it doesn’t protect any of the rights that they even have in their labor laws. That’s why the workers have rejected it. This is why the unions in Central America are opposed to it, fighting it. This is why the solidarity groups are opposed to it, the small farmers are opposed to it.

AMY GOODMAN: Why are some Republicans and companies here opposed to it?

CHARLES KERNAGHAN: Oh, well, I mean, it’s–in Nicaragua, for example, since it is a very tragically poor country, there’s a special agreement to allow Nicaragua to use 640 square million yards of fabric from outside the CAFTA region. And so, those garments will come into the United States duty-free. 427 million garments with fabric made in China. So, we have already lost 440,000 apparel jobs and textile jobs in the United States since George Bush came to office. There’s maybe about 600,000 jobs left. I mean, there are real problems with the way the CAFTA is set up, because there’s no level playing field. There’s no respect for worker rights.

Like the gentleman said, the jobs in Nicaragua have increased. In fact, they have quadrupled between 1998 and 2004, the maquiladora jobs went from 15,000 to over 61,000. There are 77 maquila factories in Honduras — in Nicaragua right now. In terms of apparel, it’s booming. Between 2003 and 2004, apparel exports were up 23%. They were up 50% in the first two months of 2005. Everything is going up. The only thing that’s going down is wages and worker rights. So why should the workers in the Nicaragua or the workers in the United States, for that matter, buy into a trade agreement, which is meant for business? Like Bill Thomas at the House Ways and Means Committee, trying to push this through, trying to push CAFTA through Congress, the other day, he told the real reason. He said, “Look, the U.S. companies need access to cheap wages in nearby countries.” This is what’s going on.

AMY GOODMAN: Carlos Sequeira, your response to that. The U.S. companies need access to cheap labor.

CARLOS SEQUEIRA: Thank you. It’s interesting that he refers to two Asian companies. I would like to invite him to come down and talk to American companies that are basing them here, even companies from the Carolinas. There is a reality. Your economy, the American economy, is migrating, as it has always done, to face prosperity. You have started that in agricultural economy, then you move into manufacturing, then into services, and now you are in the knowledge economy. Jobs have to be transformed. Hard jobs have to be re-engineered. You have to convert people. People still do hesitate. There is a reality. You are going to be facing certain jobs, and you are going to be losing them to China —- to China, and that is a fact you don’t refer to. My question is if you are going to lose jobs because you have to recombine them in more value-added jobs, as is the case in the United States, to whom do you want to lose them? To a country that is remote, and doesn’t buy American, as China? Or do you prefer to give them to your backyard countries, to your friends and neighbors who are badly in need of creating new jobs, and that buy American? Listen -—

AMY GOODMAN: Charles Kernaghan

CHARLES KERNAGHAN: Two quick points. I would be very glad to come to Nicaragua to see these factories, except the government won’t let me into the country. They’ve declared me a persona non grata. So that’s an impossibility.


CHARLES KERNAGHAN: For human rights work. I mean, it’s obviously uncomfortable for them and not convenient. So, that’s an impossibility. But what we’re actually seeing is jobs are leaving Mexico under NAFTA. The workers are now worse off than they have ever been. Same thing, the wages are going down. 87 cents an hour for auto parts workers in Mexico. The highest wage in the country that we saw for auto parts workers was $2.47. Those jobs are now leaving for Honduras and Nicaragua. And in Mexico, Alcoa, a very big producer of auto parts, is telling the workers in Mexico, hey, we can hire three Hondurans for every one of you Mexicans. So now they are pitting Mexico against Honduras. In Honduras, like I said, the wages were about 80 cents an hour. In Honduras, about 80 cents an hour, $22.73 a week, now $35 a week, now Nicaragua has these 44 cent an hour wages, so they’re cannibalizing each other. It’s a race to the bottom.

AMY GOODMAN: What about China?

CHARLES KERNAGHAN: China is a huge problem. In Honduras, for example, in a factory called Paraiso, we were just on the phone with people yesterday regarding this, they make clothing for Wal-Mart, for Kohl’s, for Walt Disney, t-shirts. In 1996, the workers went on a 20-day strike. They took over the streets. They tried to organize, improve conditions in that factory. They won, but then the company eventually wore them down, fired all of the union people. They came back again in 1999. They won again. They have three contracts signed over time with this factory. Well, the factory is closing, because those t-shirts are going to China.

AMY GOODMAN: I want to ask you one quick thing before we wrap up. And that is, this week the announcement of 25,000 GM workers going to be laid off. How do you see this in the context of CAFTA? Does it relate in any way?

CHARLES KERNAGHAN: CAFTA is definitely part of the race to the bottom. I mean, and it’s definitely related to China. And it is definitely related to the Free Trade Agreements of the Americas. In other words, this is going to nail in place the race to the bottom. It’s very weak labor protections, no wage protections. There’s no level playing field for workers in the United States, workers in Central America. It’s a bad deal. And if the American people had a clue as to what’s going on, it would be rejected. Interesting to say, when negotiators tried to pick up the property rights of companies’ trademarks and their labels, they demanded that the countries bring up their intellectual property rights standards to W.T.O., World Trade Organization, standards, and even exceed those standards. And they put all sorts of compliance regulations and sanctions and everything. When it comes to worker rights, you know, it’s the same old game. It’s a step back for the workers.

AMY GOODMAN: Well, on that note, we’re going to have to leave it, but it’s a discussion we will continue to have. I want to thank Carlos Sequeira for joining us, a CAFTA negotiator for Nicaragua, Professor at INCAE Business School, Harvard-affiliated business school in Nicaragua, and Charlie Kernaghan of the National Labor Committee, based in New York.

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