- The Washington Times - Wednesday, April 13, 2005

The Bush administration’s top trade envoy yesterday faced surprising opposition from Senate lawmakers concerned that a U.S.-Central America Free Trade Agreement would hurt segments of the economy and add to a rising trade deficit.

CAFTA is the biggest free trade deal since NAFTA, the U.S.-Mexico-Canada pact approved by Congress more than a decade ago, and yesterday’s objections indicate the vote will be no less controversial.

Senators have been supportive of the Bush administration’s free trade agenda, easily passing four deals during the president’s first term — including a lopsided 85-13 vote in favor of a pact with Morocco. The House also approved the four, though historically it has been less receptive to free trade agreements than the Senate.

Several senators yesterday told Acting U.S. Trade Representative Peter Allgeier that they are not convinced that CAFTA can, or should, win approval.

“I still have serious concerns about this agreement,” said Sen. Max Baucus, a Montana Democrat who is usually an outspoken advocate of free trade.

CAFTA would lower tariffs and codify investor rights in the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Mr. Allgeier, at a Finance Committee hearing, said the agreement would open markets for U.S. exporters, help industries become more competitive, boost pro-spects for workers and stabilize young democracies in the once-troubled region.

“We hope that Congress will agree that America should not turn its back on struggling democracies that want a closer economic relationship that will benefit workers in all our countries,” Mr. Allgeier said.

But lawmakers said they were concerned about turning their backs on industry dear to their states.

Sen. Craig Thomas, a Wyoming Republican who voted in favor of the administration’s first four free trade deals, questioned CAFTA provisions that would allow a small increase in sugar imports.

The U.S. sugar industry relies on a system of quotas that limits supplies and supports prices. CAFTA allows a small increase in imports, a concession that potential free trade partners in Asia and the Americas are likely to seek.

“My point is, you set a precedent,” Mr. Thomas said.

Lawmakers also pointed to the record U.S. trade deficit, which reached $61 billion in February, and cast part of the blame on closer economic ties to Mexico, China and other major trade partners.

Mr. Allgeier defended the agreement, saying it would lower trade barriers in Central America, allowing agricultural exports to rise by $1.5 billion and manufacturing exports to rise by about $3 billion.

The Finance Committee meeting was the first formal hearing on CAFTA and, despite the rocky start, the administration is pressing for a vote as soon as next month.

The pact’s strongest supporters say it will be approved.

“I’m confident that, after careful deliberation of the benefits of this agreement. … Congress will vote for the American farmer and worker and approve this historic trade agreement,” said Sen. Charles E. Grassley, Iowa Republican.

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