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 News from Around the Americas | July 2005 
US Senate Approves Central American Free Trade Pact
 Edmund L. Andrews - NYTimes
| | "Free markets and open trade are the best weapons against poverty, disease and tyranny," said President George W. Bush speaking about a pursuing a free trade agreement with all the countries of Central America at the World Affairs Council National Conference held at the Organization of American States in Washington. |
Washington - After a bitter and prolonged battle over the promises and perils of foreign trade, the US Senate voted on Thursday to approve the Central American Free Trade Agreement.
The vote of 54 to 45, which came after weeks of efforts to placate angry sugar producers and other interest groups, was a major victory for President Bush at a time when Republicans and Democrats alike have been alarmed about soaring imports from low-cost countries.
The vote set the stage for an even more difficult fight in the House, where opposition to the trade pact is strong among lawmakers from textile regions in the South, manufacturing states in the Midwest and sugar- producing areas like Florida, Louisiana, Minnesota and Wyoming.
The pact would eliminate most trade restrictions on about $32 billion in annual trade with the Dominican Republic and the five Central American nations of Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua.
Though the volume of trade involved is tiny in comparison to that with China or Europe, both Mr. Bush and his opponents have viewed the pact as a crucial touchstone to the broader challenges of globalization.
For President Bush, the agreement is important as a model for bigger trade deals that would expand export opportunities for American farmers and factories. Mr. Bush and his supporters also say the pact would provide crucial support to fragile democracies that have close economic and political ties to the United States. A defeat would have seriously impaired his credibility as the White House is entering difficult international negotiations on ending agriculture subsidies and opening up global trade in services.
"This is a gateway to other agreements," said Rob Portman, the United States trade representative. "If this agreement goes down, it will signal to the rest of the world that America's leadership role in trade is being abdicated."
Critics, including most Democratic lawmakers, charged that the deal would accelerate the shift of American jobs to countries where workers earn a few dollars a day and where labor-protection laws exist mostly on paper.
As recently as Tuesday, several Republican senators were threatening to rebel against the trade pact because it provided too little protection to sugar producers and too little enforcement of labor standards in Central American countries.
Senator Charles Grassley of Iowa, chairman of the Senate Finance Committee, said the fight over CAFTA had been more difficult than that over any other trade bill "in my memory."
But after intense negotiations between White House officials and leading lawmakers, wavering Republicans settled for modest extra protections and heeded veiled warnings about reprisals to those who balked.
"Up until two days ago, I looked at CAFTA and thought it would do more harm," said Senator Norm Coleman, Republican of Minnesota who had been demanding more protection for sugar producers.
To placate sugar producers, White House officials agreed to limit imports for another two years by paying Central American producers not to export to the United States. The United States would pay with surplus farm products accumulated through its other subsidy programs.
But White House officials also warned sugar producers that they could be punished for their opposition when protections under the current farm bill come up for renewal in 2007.
"Everything will get a fresh look in '07," said Vice President Dick Cheney, in a radio interview on Thursday. "Sugar will be treated the same as everybody else at that time."
Sugar producers, who have been heavy contributors to both parties, are bitterly opposed to the pact because it would slightly relax import quotas that keep American sugar prices much higher than world prices.
Democratic lawmakers, including many who voted to open up trade with China and to pass the North American Free Trade Agreement, were overwhelmingly opposed to the Central American trade pact.
Senator Byron L. Dorgan, Democrat of North Dakota, charged that the agreement offered little to ensure that Central American nations would enforce their own labor and environmental laws.
"Shouldn't we be doing trade agreements with countries that have labor standards?" Mr. Dorgan complained during the Senate debate on Thursday. "Shouldn't we decide on behalf of American workers that we care first and foremost about American workers?"
Senator John Kerry, Democrat of Massachusetts, who voted for the North American Free Trade Agreement and walked a very careful line during last year's presidential campaign, called the deal a "giant step backward."
Democrats charged that although the deal provided tough new mechanisms for protecting patents for pharmaceutical companies and copyrights for movie and music producers, it provided little way to enforce labor laws.
Administration officials said the pact is tougher than previous trade agreements in requiring countries to enforce their own laws. In a deal struck earlier this week with Senator Jeff Bingaman, Democrat of New Mexico, the administration also agreed to spend $40 million a year to help Central American countries beef up enforcement of their own laws. But even supporters of the pact acknowledged it would have a limited impact on wages and working standards.
"I'm concerned about environmental concerns in these countries, and the labor concerns in regard to these countries," said Senator Pat Roberts, Republican of Kansas. "But trade agreements are not the appropriate forum for addressing these issues." |
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