Alliance For CAFTAction

Alliance For CAFTAction
PRODUCE TO PROSPER: MAKING DR-CAFTA WORK FOR ALL
Overview | Declaration of Principles | Initiative Components | Results

Overview

With funding from the U.S. Agency for International Development (USAID), Caribbean Central American Action (CCAA) is implementing the Alliance for CAFTAction which is creating private sector alliances across Central America to promote trade led growth by raising the productivity and competitiveness of Central American products and services to help overcome poverty. This activity is developing alliances between regional and academic institutions, business community organizations, and existing trade promotion programs. CCAA’s multi-faceted approach is developing a shared vision, between and among, the business community, civil society, and the public sector in support of the public policy changes required to leverage the Central American Free Trade Agreement (DR-CAFTA) to raise standards and improve competitiveness in the region. The Alliance for CAFTAction represents a timely vehicle for addressing these pressing issues.

The Alliance recognizes the critical role that the business community must take in reaching out to civil society to drive forward the public-private partnership required to more effectively confront the harsh realities of worsening poverty for many of its citizens and increased global competition for many of its businesses. The grant award also provides a very real challenge to the business community to concretely define its “compromiso” in committing time and resources to support this effort. The Alliance is continually receiving input from the leaders around the region to ensure that the program addresses the issues that truly face business leaders, civil society, and the public sector in the region.

As the implementation of the DR-CAFTA trade agreement becomes a reality, each of the countries has realized the great challenges that lay ahead of them and is working on resolving issues. The Alliance for CAFTAction has been active in each country by providing technical information on the free trade agreement to workers and managers from different industry sectors, as well as helping the private sector define solutions to take advantage of the opportunities that free trade presents. The Alliance, with USAID’s support, has been committed to working with the private sector to identify viable strategies for successfully improving business conditions in the region. The measure of our success will be the adoption of a specific policy recommendation by the region’s governments.

The Alliance for CAFTAction is serving as a catalyst to articulate a shared vision between and among the business community, the public sector, and civil society and is rallying for broad-based support for the adoption of the public policy changes required to attract the foreign investment necessary to fully take advantage of the opportunities that DR-CAFTA will bring to people living and working in Central America. The four central components of the initiative are:

Leadership: Coalición Centroamericana

Working with respected individuals from the business community and civil society in each country to create a broad-based regional network that, by signing the Declaration of Principles, publicly commit time and resources to driving forward the successful implementation of CAFTA and raising business, legal and social standards across the region.

Result: Over 160 Declaration of Principles have been signed by Central American and U.S. businesses and organizations who have publicly committed their time and resources to drive forward the successful implementation of DR-CAFTA Over 52 Collaborating Organizations who are supporting the Alliance initiatives.

Grassroots: DR-CAFTA Workforce Briefings

Working with AMCHAM and other business organizations, the Alliance has worked hard to educate the people of Central America about the realities of DR-CAFTA, provide them with access to unbiased information, show them existing participatory mechanisms. More importantly, trainers in each of the 5 countries have discussed with both workers and civil society the benefits that successful implementation will have on their job and family, on their industry and community.

Result: Over 119,000 people in Central America have been equipped with educational information about DR-CAFTA.

Standards: BEST BUSINESS PRACTICE Harmonization Studies

CCAA has received a 6-month no cost extension to focus on the Best Practices portion of the program. The Alliance has constructed a diverse network of “socios” from the U.S. government, regional multilateral institutions, local business organizations, and senior members of the private sector to jointly pursue a common objective. A broad consensus exists that the energy sector represents both the most critical obstacle to growth and the most significant opportunity for action. The recent groundbreaking of the SIEPAC regional transmission infrastructure project is an indication of the importance of this sector to the region. In order for Central America to overcome its specific disadvantages of insufficient energy generation, inadequate urban coverage and uncompetitive pricing, the region’s per annum investment in infrastructure must increase from its current level of 1.5% to at least 4 – 5% of GDP. The single most important barrier to attracting this additional investment is the lack of clear and uniform “rules of the game” codified in a regional legal and regulatory framework.

Result: CCAA has developed the “Regional Legal and Regulatory Framework for Power Generation” program to tackle one of the most complex problems facing the region. This collaborative effort will convene senior leaders from the local public and private sectors, multilateral agencies, US government and multinational corporations to define a common policy agenda and establish their commitment to its execution. The outcome of this initiative will be the agreements by the participants to adopt recommended regulatory changes to create a harmonized legal/regulatory framework for energy generation.

The ultimate goal of this endeavor is to overcome poverty by raising the productivity and competitiveness of Central American products and services. Simply put, Central America must PRODUCE TO PROSPER. As a first step, Central America must exert greater control over its own destiny and understand that the interests of the business community, the public sector and civil society are inexorably intertwined:

For civil society to prosper, the business community must invest sufficient resources to produce well-paying jobs that can compete in a global economy;
For the business community to prosper, the public sector must implement sound policies to produce effective institutions that can operate under a predictable "rule of law";
For the public sector to prosper, civil society must become true stakeholders to produce stable communities that can provide reasonable hope to future generations.

Please note that this project is focused only on Central America as it was prepared and presented to potential donors before the signing of the Dominican Republic – Central America free trade agreement (DR-CAFTA) with the United States.