On March 1, 2006 the U.S.-Central America Free Trade Agreement (CAFTA) went into effect between the United States and El Salvador, the first of six Central American nations and the Dominican Republic that would eventually become part of the deal. The agreement, modeled on the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico, was seen by the Bush Administration as the first step in a new way toward creating a hemispheric free trade zone after the defeat of the Free Trade Area of the Americas.Perla reviews the impacts that another neoliberal trade pact, CAFTA, has had on the Central American countries. It appears that this treaty has had largely the same effects on these countries as NAFTA did on Mexico: the wiping out of small farmers, increased imports of US subsidized bio-engineered grains and foodstuffs produced by large corporations from the US and a corresponding decrease in exports of like items to the US. This dramatic change has cause numerous secondary social effects like drug trafficking, gang violence, migration north to the US (see this), and US government political interference of behalf of corporations in the governance of Central American countries.
The trade agreement has given the U.S. government's opportunity to leverage development aid into political influence, and corporations the legal mechanisms to challenge environmental regulations. Recent examples of U.S. intervention in Salvadoran domestic affairs, like pushing for a Public Private Partnership Law, and the U.S. protest over the Salvadoran government’s awarding an important seed purchase program to local cooperatives instead of a Monsanto subsidiary, occurred within the framework laid out in CAFTA.