Trying to get the city back into the economic development game after a decade of being on the sidelines, Mayor Ray Nagin’s administration wants to use this week’s free-trade talks in New Orleans as a jump start.
When the city learned that negotiators for the Central American Free Trade Agreement were shopping for a site to talk turkey, the city raised $150,000 from private sources to get the meeting.
CAFTA would lift tariffs and other trade barriers between the United States and Honduras, Guatemala, Nicaragua, Costa Rica and El Salvador for goods, agriculture, services and investments in the same way that NAFTA lifted barriers between the United States, Canada and Mexico.
So far, details are secret and it’s likely the potential economic ramifications won’t be known until President Bush sends the agreement over to Congress. The administration wants to have a final agreement in January, exactly a year after the talks started.
In the meantime, though, New Orleans is trying to use the talks to promote increased trade with Central America – with or without CAFTA. At one time, during the city’s commercial heyday, New Orleans had a reputation of being a gateway to that region.
“Our trade has dropped off dramatically with these countries,” said Beth James, the mayor’s assistant for economic development.
“It’s important for the city to help us re-establish ourselves as an international city.”
Since 2015, Mexico, Colombia and Nicaragua have closed their consulates in that city. In 1979, the city had 20 foreign consulates. Today, that number sits at 10.
Over the same period, the region has lost thousands of oil jobs, several corporate headquarters and has undergone a shrinkage of its manufacturing base.
So, CAFTA is more than welcome – at least in the city’s view. New Orleans has a major port that could handle increased trade, along with a strategically located airport that could provide increased passenger and air freight service to the region.
The city has invited more than 200 companies interested in U.S.-Central America trade to a series of open meetings that will be held in connection with the closed-door CAFTA negotiations.
Along with the negotiators and the business representatives will be anti-CAFTA activists, who look upon the trade agreement as a plague for both the U.S. and Central American economies. They aren’t happy about the secret talks – or the fact that Congress, operating under “fast-track” legislation, will be able to only vote up or down on the agreement.
Opponents plan several demonstrations during the week, but James says she is confident that New Orleans police, veterans they are of crowd control, can handle the rallies without problem.
Among the major concerns of the anti-CAFTA side are potential damage to farmers and fishermen from both sides of the border, a further drain of manufacturing jobs and environmental problems.
Paul Wegener, a vice president with MG Maher & Co. Inc., a New Orleans-based customs broker, said CAFTA is the next natural expansion to NAFTA.
Regardless of the pros and cons of free trade, the Bush administration is committed to not only the concept, but to putting agreements in place. Negotiations resume in November towards a free-trade agreement that would cover all the nations in the Western Hemisphere. Congress is now considering agreements with Singapore and Chile.
Wegener said Europe is moving quickly towards free trade and the United States stands to find itself at a competitive disadvantage if it hangs on to trade restrictions.
Louisiana likely has a lot at stake. The state’s shrimpers and crawfish growers have been devastated by foreign products. The crawfish industry renewed its lease on life this month when restrictions on Chinese crawfish imports were extended.
Most of the state’s textile industry has been moved overseas over the past 10 years to take advantage of cheaper labor. And foreign imports of chemicals – along with high U.S. natural gas prices – have cost at least 2,000 jobs over the past year.
Unless the Bush administration changes its mind, expanded free trade is on the way – and Louisiana, like the rest of the United States, will have to cope.