CAFTA...and free trade

At the beginning of October, Costa Rica will be voting on CAFTA, the Central American Free Trade Agreement. I’m not sure what “free trade” is. I’d be willing to bet the name’s a bit misleading. On the surface it’s a treaty between Costa Rica and the United States to do business without tariffs. But there’s a lot more to it than that. If it were that simple it wouldn’t have the intense debate that seems to be swirling around it.

I just heard about it last week, so I’m not going to pretend I know anything about it.

But, a few things: When the United States embarked on free world trade, we didn’t vote on it. Congress, or the president—someone or somebody; see I don’t even know who—just said this is the way it’s going to be. Costa Ricans get to vote on it. Score one for the Costa Ricans.

Another thing: Last week I was in Costa Rica working with a company that builds Web sites for the agency I work for. There are about 150 people working at the company, 150 jobs that aren’t in the United States. I’m not grousing about the loss of job. I only point that out because at a company like that, one that clearly stands to benefit from CAFTA, or TLC as it is known by its Spanish lettering in Costa Rica, there are opponents to the agreement. Doesn’t make sense, does it? You’d think these people would see the clear benefit of such an agreement. More jobs offloaded to Costa Rica from the U.S.

But maybe they know something others don’t know.

Way back when, when the so-called paradigm shifted in corporate America, corporations said they could no longer guarantee a lifetime job, but what they could provide was training and growth, and when it was time to move on, workers could take that training and growth to their new companies. This could keep corporations competitive, lowering costs and overhead. Workers thought this was a deal, the old what’s good for GM is good for America. (Imagine they swallowed that old chestnut!) The big thing was, American workers had all of their money tied up in stocks and 401(k)s. So, basically, American workers opened up a vein to keep the Dow Jones pumped up and so they could have money when they retired. What they missed was there was a whole lot of living to do before they retired. There were cars to buy and fix and mortgages to pay and college tuition bills to absorb. But those jobs corporate America promised weren’t there. They were in India and obviously places like Costa Rica. So they couldn't afford cars and houses and education. We know, said all the big, fat, white men is suits, let's come up with free trade, since no one can afford our stuff here in the U.S., let's come up with a way to sell it in other countries. (See, the middle-class, which traditionally bought all the stuff America produced was shrinking, so corporate America had to build another middle-class somewhere else.)

Production (jobs) went off-shore and we started down that road to being information-driven. The U.S was going to strategize. Ideas were the only thing we’d manufacture. Information would be the only product the U.S. ultimately produced, while the rest of the world actually made the hard product itself. The advice here was change…change jobs, the way you think, the way you work. Hell, change your underwear, as long as you changed something. But it doesn’t always work out, because there are too many chiefs and not enough Indians. Exactly how many MBAs do you need to write a marketing plan?

The only reason I bring this up is because any time rich businesspeople float an idea past you, you can be certain the first people who are going to benefit from the idea is them.