Daniel Arauz/Flickr/CC BY 2.0
A year ago, as part of her role in addressing the root causes of migration from Central America, Vice President Kamala Harris announced a call to action for businesses and social enterprises “make important new commitments to sustainably address the root causes of migration by promoting Economic Opportunity.”
As attention turns to the midterm elections, keeping that promise will become even more critical if Democrats hope to maintain control in Washington.
The first pillar of the Root Cause strategy is to address economic insecurity and inequality in the region. To that end, Harris has focused primarily on promoting private sector investment in the region, recently touting pledged investment from several major US corporations.
Despite these actions, illegal immigration to the southern border has grown rapidly since President Biden was sworn in, increasing at a faster rate in his first six months than in any other period since the Border Patrol was established there. almost a century ago. More than 2 million migrants were arrested trying to enter the United States illegally from Mexico in 2021. Compared to the average of 500,000 people arrested per year before, it is clear that the United States need to take a different approach.
Yet without significant changes, this trend will continue, with U.S. Customs and Border Protection reporting that there were 153,941 encounters along the Southwest land border in January alone.
It is abundantly clear that more work needs to be done to support the long-term economic growth needed to tackle the root causes of migration, largely fueled by a lack of job opportunities. Since many Central American countries, especially the Northern Triangle (composed of Honduras, Guatemala, and El Salvador) have borrowed heavily to provide their citizens with support programs during the COVID-19 pandemic, it will probably take many years for these countries to recover economically. , making timely action even more critical.
Instead of focusing on a dispersion of private sector investment, the Biden administration should consider structural changes that would promote long-term growth, particularly by changing policies that can be found in the Free Trade Agreement. Central American exchange (CAFTA-DR).
CAFTA-DR was originally created to promote “stronger trade and investment ties, prosperity and stability across the region and along our southern border”. Although this agreement has succeeded in boosting trade among member countries, there is still much to be done to strengthen the agreement to boost economic development in the region.
A recent report by the Mosbacher Institute at Texas A&M University pointed out that garment production in Central America is being stifled by a CAFTA-DR provision that limits the yarns and fabrics that can be used in garments to benefit from trade in duty free. This report highlights how “in developing countries, the export of garments creates jobs, reduces poverty and contributes to economic growth”.
While China and Vietnam’s share of US apparel imports has increased, Central America’s share has remained constant or declined. But not only is the amount of clothing products produced and exported in the region not increasing, Central America exports a small variety of clothing products, especially compared to China and Vietnam.
This lack of growth and diversity in apparel is largely due to the “rule of origin” requirement which mandates that apparel products, unlike other products covered by CAFTA-DR, be sourced entirely from member countries. This rule is maintained at the insistence of a handful of monopolistic yarn producers and allows them to make record profits and charge a premium while suppressing the creation of garment jobs in the Northern Triangle. This anti-competitive rule must be addressed if the administration is serious about creating apparel jobs in this hemisphere.
In addition, this rule and its exceptions are less well understood by small and medium-sized producers, present an administrative burden that is too costly for these companies and thus limit the ability of the agreement to promote employment growth in the production sector. ‘clothing.
Allowing exceptions to the term wire rule for items that are not produced locally in sufficient quantities would allow Central America to modernize and diversify. And boosting the Central American garment industry would also go a long way to promoting economic equality, given that the sector is a key driver for female employment in the region. In addition, it would help attract migrants from seasonal agricultural work to more stable employment.
Updating the rule of origin requirement to allow for more diverse inputs would also have the added benefit of helping secure supply chains by moving apparel production to Central America and away from Asian countries.
Without structural changes to the restrictive rules that govern trade between the United States and Central America, it can be expected that economic growth will continue to be stifled in the region, and therefore migration to the United States United is accelerating.
If Democrats hope to thwart the projected loss of congressional seats midterm, they should work to deliver on their promises, such as addressing the root causes of migration by updating rule-of-origin requirements in the CAFTA-DR.