The United States and five Central American nations yesterday signed a free-trade agreement as a way to solidify economic reform and democracy in a region that was a Cold War battleground through the 1980s.
But staunch Democratic opposition and limited time make any congressional vote unlikely before a lame-duck session following the Nov. 2 election.
The Central American Free Trade Agreement was signed with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
The pact would, when it takes effect, eliminate duties on 80 percent of U.S.-made industrial and consumer goods, and phase out the rest over 10 years. Farm goods would become duty-free over 15 years.
Other provisions would protect investors, patents and copyrights, and open service sectors to competition.
“CAFTA is about trade, but it is much more than a trade agreement. It offers new hope for easing poverty, fostering development and strengthening democracy,” said U.S. Trade Representative Robert B. Zoellick.
Sen. John Kerry, presumptive Democratic presidential nominee, and his party’s leaders in Congress say the pact would harm workers and damage the environment in the United States and Central America.
“Unfortunately, the free trade agreement that was signed [yesterday] marks a disappointing and unnecessary step backward in our nation’s efforts to ensure that opening markets results in higher living standards on all sides and not a race to the bottom on worker rights and environmental protection,” Mr. Kerry said.
Mr. Kerry said he would renegotiate the pact if he were elected president.
The senator has traditionally supported free-trade agreements, voting in 1993 for the North American Free Trade Agreement, for example, but he has skipped votes on more recent pacts and has not publicly stated his position on others in the works.
The Bush administration is pursuing a series of free-trade agreements, including deals with Australia, Morocco and Bahrain.
Business and farm groups widely, though not unanimously, support CAFTA.
Opposition outside the signing ceremony at the Organization of American States building was small — about a dozen protesters occasionally chanting slogans. But through the week, Central American and U.S. groups, the AFL-CIO and the anti-poverty group Oxfam organized events to describe the potential downside of enacting the trade pact.
“CAFTA will increase poverty in Central America because it will displace farmers and industrial workers and will increase the cost of health care,” said Otton Solis, president of an opposition party in Costa Rica.
Higher health care costs would result from new rules that extend protection for brand-name drugs at the expense of cheaper generics, he explained.
Despite stiff opposition, the Bush administration and allies in the House and Senate said that they hope the agreement wins approval this year, after the Dominican Republic, a Caribbean nation that borders Haiti, is folded into the pact.
“While I don’t see a vote before the November election, I hope one will occur soon after,” said Rep. Cass Ballenger, North Carolina Republican and one of two members of Congress to speak at the signing ceremony.
Central American trade officials at the ceremony also exhorted U.S. officials to approve the pact, often noting civil wars that raged through the region in the 1980s and early 1990s.
“CAFTA is about not going back to the old ways and the bad habits,” said Miguel Lacayo, El Salvador’s top trade official. “It is about anchoring our economic reforms and democratic progress.”