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Mar 24 / Elizabeth DiNovella

Obama Didn’t Get the Memo on CAFTA

President Obama and Salvadoran President Mauricio Funes discussed immigration, drug trafficking, and the economy during Obama’s trip to El Salvador. But missing was mention of the controversial Central America Free Trade Act (CAFTA).

Repeal CAFTA

Thousands of protesters held marches and demonstrations against CAFTA while Obama was in town. The free trade agreement is big news in El Salvador as corporations are suing the country for daring to have environmental laws.

The Milwaukee-based Commerce Group sued the Salvadoran government for $100 million in “foreign investor protections” under CAFTA. The government of El Salvador revoked the Commerce Group’s environmental permits for its gold mining after the company failed its environmental audit. Commerce Group filed a lawsuit for alleged lost profits before the International Centre for Settlement of Investment Disputes, the private tribunal of the World Bank.

Last week, the tribunal threw out the case on a technicality. But its ruling states that Commerce Group’s case was not “frivolous,” and that the company had the right to sue under CAFTA. The government of El Salvador still needs to pay $800,000 in legal fees.

“The fact that a corporate attack on a sovereign country’s domestic environmental policy before a foreign tribunal would even be possible—much less cost a country almost a million dollars when they win the case—highlights what is wrong with our current trade agreement model,” says Public Citizen’s Lori Wallach.

We Demand a Law that Prohibits Metallic Mining in El Salvador

Commerce Group isn’t the only company suing the government of El Salvador for investor protections rights. Pacific Rim, a Canadian company, also filed a lawsuit for lost profits before the World Bank tribunal. The next phase of the Pacific Rim case starts in May.

Investor rights have been a controversial component of CAFTA from the start.

As a candidate, Obama said, “I will ensure that foreign investor rights are strictly limited and will fully exempt any law or regulation written to protect public safety or promote the public interest.”

But as a President, Obama has inherited Bush era free trade agreements with Panama, Colombia, and Korea that await Congressional approval. Obama hasn’t struck out investor rights from any of these.

Representative Tammy Baldwin, Democrat from Wisconsin, along with eighteen other Democrats, has co-sponsored a congressional letter asking the President to amend “investor-state provisions of CAFTA.”

The Congressional letter asks the President to “commit to removing the investor-state private resolution mechanisms from the pending free trade agreements with Korea, Panama, and Colombia.”

Obama: Hands Off Central America!

More than 140 religious, environmental, and human rights organizations just signed a different letter to the President asking him “to address the underlying policy issues in CAFTA that threaten the exercise of democracy in our hemisphere.”

“CAFTA violates the security and sovereignty of our people, as it generates legal conditions under which transnational corporations can sue in an unjust manner,” said Héctor Berríos, with the National Roundtable Against Metallic Mining, a Salvadoran group. “We are asking President Obama to modify the clauses that relate to investment, among others, for all the damage they have caused our population.”

Before President Obama even arrived in El Salvador, a few thousand people marched to the U.S. Embassy in San Salvador to deliver a letter to him.

In the letter, a coalition of social movement groups noted that special attention should be paid to the economic crisis, climate change, immigration, and CAFTA.

Movement leader Pedro Juan Hernández told Diario Colatino, “it is necessary to establish a new economic model that benefits the majorities, not CAFTA.”

But Obama didn’t get the memo.

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