July 28, 2005 | Commentary on Foreign Aid and Development

For Democracy, the Economy, and our Allies, We Need CAFTA Now

Any day now, the House of Representatives will vote on the Central American Free Trade Agreement. The outcome is considered too close to call. But the stakes are huge.

The upcoming vote will affect far more than trade deficits, job creation or other economic factors. It will determine the course of American leadership in Central America and could decide the very fate of the infant democracies there.

That's because a third party lurks silently in the shadows as the CAFTA debate swirls. That third party is China, a fast-rising global power with ambitions to exert even greater influence in the Western Hemisphere--especially the southern flank.

China has a keen economic interest in seeing CAFTA rebuffed in Congress. The Asian nation now enjoys a near-monopoly on world textile production. CAFTA would lower tariffs on U.S. cotton exports to Central American textile factories (factories that, by the way, pay better wages than the Chinese). This would make Central American textiles competitive against Chinese in the U.S. market.

But if CAFTA fails, U.S. cotton exports to Central American mills will dry up, while U.S. imports of Chinese textile products--with no U.S. content--will soar, as they have--from 500 percent to 1,200 percent in the past six months since the expiration of American textile quota laws.

But the geopolitical ramifications of the CAFTA vote may be even more important than the economic effects.

For decades, the United States has encouraged and supported forces of freedom and democracy in Central America--with considerable success. Meanwhile, China has reassured the world's despots and tyrants that "each country has the right to choose its own path to development," whether democratic, totalitarian (as in the case of Iran, North Korea, Uzbekistan, or Zimbabwe) or, as in Cambodia in the 1970s and Sudan today, genocidal.

But in recent years, Washington's single-minded focus on Afghanistan and Iraq has left many Central Americans with the impression that the U.S. has little time to attend the challenges facing our southern neighbors. At the same time, China has been parlaying its economic growth--and its search for resources to fuel its economic growth--into greater influence in Latin America and the Caribbean.

Both the State Department and the Pentagon agree on this. Assistant Secretary of State for Western Hemisphere Affairs Roger F. Noriega and Deputy Assistant Secretary of Defense Roger Pardo-Mauer said exactly this last March.

The perceived U.S. disengagement from Central America leaves a very real political and economic vacuum. One that China is more than happy to fill.

China has already elbowed its way into an observer's chair at the Organization of American States --despite the OAS's stated goal of advancing democracy. Moreover, China successfully lobbied to keep Taiwan out of an OAS observer position, despite the fact that Taiwan is one of the world's most dynamic democracies.

Chinese diplomatic advances in the Caribbean rim include massive trade agreements and military cooperation with Venezuela. As one retired Venezuelan admiral recently put it, "You have to see this from a geopolitical point of view. We're no longer a country allied to the Western Hemisphere. We're going to be allied to China or Russia."

China also has 140 Chinese security police in the U.N. peacekeeping force in Haiti. As usual with the Chinese, there are strings attached. Beijing is now pressuring Haiti to break ties with Taiwan in return for maintaining the U.N. presence.

The debate over CAFTA has sparked high-flown rhetoric from both sides. But simple facts speak more tellingly--namely, that all the countries involved in CAFTA maintain diplomatic ties with Taiwan and not with China. This plain truth, lost amid the hubbub in Washington, is remarkably important to China. Indeed, it goes far toward explaining China's determination to make economic and diplomatic inroads in Central America.

China has launched a major diplomatic offensive to stamp out and supplant Taiwan's legitimacy among the young democracies in Central America and the Caribbean.

Thus China would score a double victory with CAFTA's defeat. Central America would be left with the message that the United States is simply not interested in its fledgling democracies. And Congress would do China the favor of taking out one of its few remaining competitors in the U.S. textile market.

John Tkacik a senior research fellow at the Heritage Foundation in Washington, D.C., is a retired officer in the U.S. foreign service who served in Beijing, Guangzhou, Hong Kong and Taipei.

About the Author

John J. Tkacik, Jr. Senior Research Fellow
Asian Studies Center

First appeaered in Fredericksburg (Va.) Free Lance-Star