Latest News

CAFTA trade agreement wins House approval

WASHINGTON—The House of Representatives shortly after midnight Thursday narrowly agreed to lower trade barriers with Central American countries, handing President Bush a slim victory on a trade pact that the administration said would advance economic and national security interests.

The 217-215 vote came after furious last-minute work by the administration and Republican leaders to line up the final votes. Going in, the agreement faced the most intense opposition in Congress of any trade agreement in recent history. The Senate approved the agreement late last month.

The Central American Free Trade Agreement would eliminate duties immediately on 80 percent of U.S. exports to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic, but its economic impact would be considerably less significant than that of previous deals. Advocates argued instead that removing trade barriers would stimulate democracy in those six countries and improve diplomatic bonds with the United States.

"It is in the national interest that CAFTA passes," said House Republican leader Tom DeLay, R-Texas. "It is good for our national security and supporting these fledgling democracies at our back door. It is good in our effort against illegal immigration. It is good for our economy."

Opposition to the bill was widespread and not limited to lawmakers whose congressional districts would face more competition from abroad. The lack of enthusiasm stemmed largely from a growing wariness about the increasing globalization of the U.S. economy.

Hoping to ease such worries, House leaders pushed through legislation earlier Wednesday that would tighten enforcement of trade rules with China. It was aimed at reassuring lawmakers such as Rep. Phil English, R-Pa., who's considered an influential voice among wavering Republicans.

Lawmakers from sugarcane- and beet-producing states formed the core of the resistance, arguing that open borders would open U.S. markets to Central American sugar and hurt domestic growers. Other critics said the agreement didn't contain strong labor and environmental provisions and would encourage manufacturers to leave the United States while exploiting Central American workers.

"Under the president's administration, we have lost millions of manufacturing jobs," said House Democratic leader Nancy Pelosi, D-Calif. "He is still in the net-loss column for manufacturing jobs. So as our manufacturing base erodes, as our industrial base erodes, we have a president who is contributing to the further erosion of that base."

Bush made a rare visit to the Capitol on Wednesday morning to rally House Republicans. He kept his schedule open throughout the day to lobby undecided lawmakers. Secretary of State Condoleezza Rice also was at the Capitol, promoting the deal as a means to help Central American countries emerge from recent dictatorships into fledgling democracies.

Advocates argued that CAFTA's failure would feed the political desires of Venezuelan President Hugo Chavez, a critic of the United States and close ally of Cuban President Fidel Castro, and invite a return to the days of socialist regimes and Central American unrest.

On the other side, labor organizations were putting just as much pressure on lawmakers, particularly Democrats. In a letter to Democratic leaders, a coalition of labor officials said: "Simply put, there must be real and measurable consequences for opposing labor on this issue. The stakes are too high for the workers of America. We cannot and we will not give any Democrat a pass on CAFTA."

The labor leaders' letter served as a warning shot to lawmakers such as Rep. Harold Ford, D-Tenn., who's seeking his state's U.S. Senate seat and would be hurt by the loss of union support. Ford, a reliable pro-trade vote, listed himself as undecided, and lobbyists were working on him as the vote neared. Wednesday night he voted against the agreement.

In the end, 202 out of 231 Republicans and 15 Democrats voted for the agreement.

Together, the six countries in the agreement account for just 1.4 percent of U.S. global trade. A World Bank report recently predicted that CAFTA would cause their economies to grow no more than 0.8 percent more per year over the next five years.

Most Central American products already enter the United States without tariffs. The expected increase in U.S. exports of manufactured goods under CAFTA would be about $1 billion a year, according to the National Association of Manufacturers, a trifle compared with total U.S. exports of $818 billion.

"For us it's the continuation of a failed model," said Bill Samuel, a top lobbyist for the AFL-CIO. "It starts with NAFTA (North American Free Trade Agreement), leads to job losses in the U.S. and increasing poverty in the developing world—increasing poverty and environmental degradations. ... It's very important as a symbol of the president's trade agenda being rejected."

Bruce Josten, top lobbyist at the U.S. Chamber of Commerce, countered: "We as a country are a party to a very small number of trade agreements globally, particularly compared to the EU (European Union). If our companies are going to be saddled with tariffs, which are taxes for exports, while everybody else in the world is negotiating agreements that eliminate tariffs, you're just increasingly putting the United States at a competitive disadvantage."


(c) 2005, Knight Ridder/Tribune Information Services.

ARCHIVE GRAPHIC on KRT Direct (from KRT Graphics, 202-383-6064): 20050509 CAFTA trade

Need to map