Thursday, July 28, 2005

Why CAFTA Is a Good Thing

I'm for free trade agreements, period; ideologically, it's a no-brainer for me. There are other, more tangible reasons to support the just-passed agreement, though, and Investor's Business Daily lays some of them out here (hat tip to RealClearPolitics):
"CAFTA is a larger U.S. export market than Russia, India and Indonesia, combined," said Ayse Oge, trade consultant with Los Angeles-based Ultimate Trade, who notes that Central American consumers are desperate for U.S. goods.

The model of course is NAFTA, which helped boost the economies of Mexico and the U.S. in the past decade. "We would not be here without NAFTA," notes Jose Otanon, CEO of Grupo S.E.P. of Lynwood, Calif., whose company sells insurance for burials in Latin America. "Most Mexicans and Salvadorans never had insurance. They can get it now."

According to recent estimates, the jobs and incomes CAFTA creates will boost purchasing power by $15 billion in the U.S. and $5 billion in Central America.
I find the above very illuminating; the Progressive Left is forever carping about capitalism's exploitation of the poor, yet it is capitalism that is their only hope. $15 billion in purchasing power isn't much in an economy the size of the U.S. (although I ask you: would you rather have the $15 billion extra or not?), but $5 billion is proportionally much greater for the far poorer nations of Central America...and ultimately, more prosperous neighbors are more democratic, peaceful neighbors who are far more likely to trade with the U.S. and support free market economic policies.

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