- The Washington Times - Friday, October 24, 2003

United States and Central American negotiators settled key portions of a proposed free-trade agreement during negotiations this week, but they still have to address some of the most politically sensitive areas before an end-of-year deadline.

The agreement is an integral component of the Bush administration’s trade strategy to pursue simultaneously deals with individual nations, regions and at the global level.

Lead negotiators from the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, meeting in Houston for the eighth round of U.S.-Central America Free Trade Agreement (CAFTA) talks, reached an agreement to lower barriers for about 99 percent of traded industrial and consumer goods.

Tariffs, the fees paid when products cross the border, would be eliminated over 10 years under the tentative agreement, negotiators said.

Industrial and consumer products are one of the easiest areas to resolve. Negotiators said they made progress in other areas, but farm goods, opening markets for services such as telecommunications, and labor and environmental provisions remain difficult problems.

“We still have some difficult issues before us, but I think that this round clearly demonstrates that we made major strides in our goal toward concluding this negotiation by December,” Regina Vargo, lead U.S. negotiator, said yesterday.

In the private sector, U.S. sugar producers have been especially wary that the agreement could undermine their domestic market, and Central American farmers are worried that subsidized U.S. commodities, such as corn, could destroy their livelihood.

Labor and environmental provisions also have attracted much attention, especially in Congress. The Republican-controlled Congress, likely to vote on CAFTA in an election year, has a final say on trade pacts; President Bush last year won the right to negotiate agreements and submit them to lawmakers for a yes-or-no vote without changes.

Democrats have been adamant that the agreement include provisions that would mandate strong labor standards. In a letter sent Thursday to U.S. Trade Representative Robert B. Zoellick, House Minority Leader Nancy Pelosi and other top party officials said it must address “the serious problem of the region’s lower labor standards and enforcement capacity.”

In a separate letter earlier this month, Montana Democrat Max Baucus, a party leader on trade issues, and eight other senators told Mr. Zoellick that the CAFTA pact must contain environment and labor chapters that “suit realities in Central America.”

“CAFTA is one of the first in a growing list of [free-trade agreements] expected to come before Congress in the next few years. The CAFTA debate will set the tone for those to follow,” the letter said.

The administration also is negotiating a hemisphere Free Trade Area of the Americas, and smaller deals with Australia, Morocco, Bahrain and five countries in southern Africa. Mr. Bush recently announced plans to start talks with Thailand.

Past trade agreements, including those with Chile and Singapore approved by Congress earlier this year, generally included provisions that required countries to enforce their own labor laws. Democrats argue that labor laws in the five Central American nations aren’t adequate.

“Using a standard of ‘enforce your own labor laws’ is unacceptable for nations that do not incorporate internationally recognized labor standards [rights to associate and bargain collectively and prohibitions on child labor, discrimination, and forced labor] in their laws and have a history of nonenforcement of their inadequate laws,” the House letter said.

In Guatemala, for example, the U.S. State Department has continuing concern over the failure to prosecute perpetrators of violence against labor leaders and reinstate workers who have been illegally fired, according to a September department report.

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