Introduction

At the Summit of the Americas in Chile five years ago, nothing symbolized the achievement of a decade more powerfully than the participation of the five republics of Central America. In the 1980s, three of these countries -- El Salvador, Guatemala, and Nicaragua -- had been battlefields. The other two, Costa Rica and Honduras, had been staging grounds for armies. The wars left 200,000 people dead and more than one million in refuge abroad. But by the time of the summit, with its formal launch of the Free Trade Area of the Americas (FTAA) talks, each Central American country was a peaceful democracy and a full participant in the summit's vision of economic integration, shared destiny, and the creation of a community of new world democracies.

Today, an interim free trade agreement joining the United States with the region, known for short as "CAFTA" (Central American Free Trade Agreement), is the leading indicator for the fate of the FTAA. It is also the foundation for Central America's economic development and consolidation of democracy in this decade. And, with CAFTA talks tentatively set to conclude this December, and the larger U.S. trade agenda bruised earlier this month by the breakdown of World Trade Organization talks, CAFTA has also become a symbol for the larger debate about America's trade with its poorer neighbors.

Many progressives, fearing that Central America's recent success is due in part to weak labor policies, have come to view labor conditions in the region as the principal issue for the agreement. They argue that the litmus test for CAFTA should be inclusion of a chapter requiring adoption of "core labor standards," enforceable through sanctions. But while CAFTA participants (including the United States, as noted in the Appendix) can do more to bring labor law and enforcement in line with international standards, sanctions are not the best approach; they are at least as likely to hurt workers as to help them, and would also make the larger vision of the Santiago summit harder rather than easier.

Progressives should view CAFTA through a different symbolic lens: as a model for integration in the Western Hemisphere and a way to stabilize democracy and development in Central America a decade after the wars. Labor policies have a place here; but as a labor policy tool, CAFTA will succeed if its focus is on broader approaches aimed at human resource development and improved legal regimes rather than on sanctions. The final agreement can thus be evaluated on three basic principles:

• It should genuinely open the markets most important to development and growth, from sugar and clothes to high-tech goods and services;
• It should improve literacy and skills to enable Central American workers to improve their living standards and job opportunities; and
• It should represent an approach to integration in the Americas that helps create a consensus among all democracies participating in the FTAA talks.