Opposition to CAFTA wanes in Nicaragua

Marching down Universidad Avenue toward congress came thousands of protesters, throwing their fists into the heavy, humid air, waving anti-American placards. The demonstration against the proposed Central American Free Trade Agreement (CAFTA) earlier this month was expected to be about 20,000 people strong.

In fact, more like 4,000 people showed up.

In a country that spent a good number of the last 25 years battling US interests here, the predictable opposition to CAFTA has, in fact, been a little weaker - and the support for the trade pact broader and deeper - than expected.

Just down the street from the Managua protest, another scene - less bombastic, but arguably more significant - was playing out at the Crowne Plaza hotel. Eleven presidents of Nicaragua's chambers of industry sat in a vast air-conditioned room below a sign that read: "Yes to economic development, yes to CAFTA."

This summer, President Bush expended hefty political capital to get the controversial trade agreement passed. Four of the six co-signatories have already ratified it: the Dominican Republic, El Salvador, Panama, and Guatemala. Costa Rica's labor unions, with monopolies in energy, telecom, and insurance are blocking its ratification.

In Nicaragua, the argument is more emotional, touching on the economic plight of central America's poorest country, its leftist past, and its troubled relationship with the US. And as the debate plays out, ratification of the agreement is stalled in Nicaragua's congress.

Eric Jacobstein, an expert on trade issues at the Inter-American Dialogue think tank in Washington, says CAFTA is "being used [by Nicaraguan politicians] as a way to express other issues ... not only as a way to oppose the US, but to gain political leverage." Still, he forecasts that despite arguments ahead, CAFTA will eventually pass in Nicaragua.

People like Juan Carlos Pereira, a Harvard Business School-educated Nicaraguan, says CAFTA can bring much-needed jobs to the country, which is way behind other Central American nations when it comes to investment. Honduras and El Salvador each export some $2 billion worth of apparel a year for example. Nicaragua is closer to $600 million. "We lost a decade in the '80s because of the war," says Mr. Pereira. "We are only now starting to catch up and we need CAFTA more than anyone else."

Pereira, who runs Pro-Nicaragua, a government-backed organization that seeks to attract investment says about $400 million worth of projects have come through his office. "That represents about 7,500 jobs that are coming to Central America. I don't know how many will come to Nicaragua, but I will tell you - if we don't have CAFTA, not a single one will come here," he says.

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