In 2004, Honduras signed the Central American Free Trade Agreement (“CAFTA”, or “CAFTA-DR”). It was approved by the U.S. in 2005 and fully implemented by Honduras in 2006. CAFTA was a U.S. initiative in the mold of the earlier North American Free Trade Agreement (“NAFTA”) among the U.S., Mexico and Canada, on a smaller scale. Other signatories to CAFTA were Costa Rica, the Dominican Republic, El Salvador, Guatemala and Nicaragua. Prior to CAFTA, under the U.S. Caribbean Basin Trade Partnership Act and similar preference programs, the U.S. had already granted duty-free access to most exports from the same CAFTA countries. CAFTA purported to consolidate those benefits and make them permanent (Taylor, Naude, and Jesurun-Clements, 2008, p.97).
Within the U.S., critics questioned the advisability of adopting another so-called free trade agreement in light of significant problems experienced with NAFTA. Concerns were also expressed as to potential negative effects on Central American farmers, among many other things (Byrnes, 2008). Within Central America, there was widespread opposition to CAFTA, including the warning that “Central America is not for sale!” (Laliberte and Chawla, 2005).
Honduras
Honduras, an independent nation since 1821, is one of the poorest countries in the Western Hemisphere. It suffers from extreme inequalities in income distribution, as well as high unemployment and the world's highest murder rate. With over 8 million inhabitants, Honduras' population growth rate is high at nearly 2% annually, and this growth is mostly among poor, rural, indigenous families. As a result, Honduras' impoverished, young adult (age 15 to 29) population is projected to grow rapidly in the coming decades (CIA, 2016).
In 2014, thousands of unaccompanied minors were stopped at the U.S.-Mexico border, most of them from Honduras, triggering much outcry and debate in Washington and throughout the U.S. That same year, Honduran President Juan Orlando Hernandez announced the “Alliance for Prosperity,” a joint initiative with El Salvador and Guatemala which seeks (among other things) to stimulate economic growth and reduce violence (CIA, 2016).
In its 2016 budget the U.S. allocated $1 billion among the three countries in support of the Alliance for Prosperity, with the immigration issue a central theme in the debate over funding. It was a major commitment of additional financial aid to the troubled Central American region, and a sign that CAFTA was not working. While the U.S. has a long history of exerting influence in Central American affairs (and some would call it economic imperialism), dating back to the days of the United Fruit Company in the early 20th century (Bucheli, 2006), the 2016 aid package once again proved the view of many that American foreign aid policy is not driven solely by foreign policy objectives, but also responds to underlying domestic political conditions (Miller and Tingley, 2010, p.228).
Emigration
As noted above, Honduras’ population is growing rapidly, especially the young adult population. This, combined with unemployment, violence and other problems will continue to fuel Honduras’ well-documented emigration problem, with the U.S. being the destination of choice. As of 2014 there were 573,000 Hondurans in the U.S., 60% of which were present illegally. The Honduran economy is greatly dependent on funds sent “back home” from the U.S. As of 2012, remittances accounted for 15.7% ($3 billion) of Honduras’ GDP (Gao, 2014).
People have been crossing the U.S.-Mexico border, without proper authorization, for generations. Today’s emigration problem, however, can be largely traced to CAFTA. Brokered by the George W. Bush administration with the blessing of some regional political and commercial allies, CAFTA has had (as many predicted) a devastating effect on poverty, dislocation, and environmental contamination in the region (Perez-Rocha, 2014). The wave of Honduran immigrants, after all, is relatively new. Over half of Honduran immigrants in the U.S. (legal or not) arrived in 2000 or later, and about a quarter after 2006. CAFTA was sold as a great boon for U.S. trade with the CAFTA nations. And trade has increased, but largely at the expense of local workers, and farm and factory workers in particular, who are more and more at the mercy of multinationals which have systematically weakened trade and regulatory protections. Honduras’ agricultural sector has been overrun, leading to widespread displacement of small farmers. Another “push factor” is the environmental destruction caused by ruthless mining corporations, displacing even more people from their rural jobs and homes. Many of these workers and farmers – or their children – are showing up “on our doorstep” (Chen, 2015.)
And there is more. CAFTA has diminished the ability of Central American governments to protect their own citizens from corporate abuse. Despite the U.S.’ promises – that CAFTA would improve regional economies and thereby reduce emigration—many thousands of Hondurans and other Central Americans have fled to America, as dramatized by that influx of children crossing the U.S.-Mexican border since 2014. While many may be fleeing violence in their countries, there are certainly important economic roots to the migration—and they are directly related to CAFTA (Perez-Rocha, 2014). Warnings about the crises that “free trade” would bring to Central Americans were, unfortunately, correct. The reasons people migrate are rooted in endemic poverty and violence in the region (ActAlliance). One knowledgeable observer attributed the destruction of Honduras’ local markets to displacement caused by CAFTA, “which has locked Central America into competition with highly-subsidized American agribusiness” (Salise, 2015.)
ACT Alliance
In total, over 60,000 illegal migrants, mostly children and coming mainly from Honduras and El Salvador, were stopped on the U.S.–Mexico border between October, 2013 and July, 2014. The trip north is extremely dangerous, with parents placing their children’s fates in the hands of traffickers called “coyotes.” Many migrants are captured by police before they arrive, or even worse, by criminals. Thousands die, but the risks of the journey are seen as less than the risks of staying at home.
Of the 60,000, more than 13,000 were ultimately deported back to Honduras. Local government authorities were unable to cope with the situation and declared a state of emergency. Fortunately, ACT Alliance members were on the ground and ready to help. They lent valuable support to returning migrants and their families, including tracking down family members, and they gave special aid to children whose families were not located. At one reception area for returning migrants, ACT brought equipment and furnishings for staff and other volunteers. Alliance members paid bus fares for some who could not afford it. They also provided psychological help to children suffering from their dangerous journeys. There were many reports of sexual exploitation (and a “mother” was assigned to each of these children while volunteers searched for the families).
ActAlliance is a coalition of 137 churches and faith-based organizations working together in over 100 countries, dedicated to helping poor and marginalized people. Within the diversity of organizations that make up its membership, ACT Alliance endeavors to respond to emergencies around the world – local or global, large or small – with an ecumenical commitment to respond to the needs of communities when they are at their most vulnerable (ActAlliance).
References
ActAlliance (2016). Retrieved from http://actalliance.org/
Bucheli, M. (2006). Good dictator, bad dictator: United Fruit Company and Economic Nationalism in Central America in the Twentieth Century. University of Illinois. Retrieved from http://www.business.uiuc.edu/Working_Papers/papers/06−0115.pdf
Byrnes, S. (2008). Balancing Investor Rights and Environmental Protection in Investor-State Dispute Settlement under CAFTA: Lessons from the NAFTA Legitimacy Crisis. Business Law Journal, 8(103). University of California Davis. Retrieved from http://blj.ucdavis.edu/archives/vol-8-no-1/balancing-investor-rights-and-environmental-protection-in-investor-state-dispute-settlement-under-cafta.html
Chen, M. (2015). How US ‘Free Trade’ Policies Created the Central American Migration Crisis. The Nation. Retrieved from http://www.thenation.com/article/how-us-free-trade-policies-created-central-american-migration-crisis/
Gao, G. (2014). 5 facts about Honduras and immigration. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank/2014/08/11/5-facts-about-honduras-and-immigration/
Laliberte, S. with Chawla, A. (2005) Why We Oppose CAFTA-DR. Oakland Institute. Retrieved from http://www.oaklandinstitute.org/node/2315
Miller, H. and Tingley, D. (2010). The Political Economy of U.S. Foreign Aid: American Legislators and the Domestic Politics. Economics & Politics, 22(2), pp.200-232. Princeton University. Retrieved from www.princeton.edu/~hmilner/forthcoming%20papers/PoliticalEconomyofUSforeignaid.pdf
Perez-Rocha, M. (2014). What ‘Free Trade’ Has Done to Central America. Institute for Policy Studies. Retrieved from http://www.ips-dc.org/free-trade-done-central-america/
Scalise, D. (2014). Honduran Update: Deportation, Hunger, Violence.. Hope? Panoramas. University of Pittsburgh. Retrieved from http://www.panoramas.pitt.edu/content/honduran-update-deportation-hunger-violence-hope
Taylor, J., Naude, A. and Jesurun-Clements, N. (2008). Does Agricultural Trade Liberalization Reduce Rural Welfare in Less Developed Countries? The Case of CAFTA. Applied Economic Perspectives and Policy (2010) volume 32, number 1, pp. 95–116. Retrieved from http://aepp.oxfordjournals.org/content/32/1/95.short
The World Factbook (2016). Central Intelligence Agency. Honduras. Retrieved from
https://www.cia.gov/library/publications/the-world-factbook/geos/ho.html
