- The Washington Times - Sunday, January 9, 2005

The Bush administration hopes to start moving the Central American Free Trade Agreement through Congress quickly this year, before lawmakers turn their focus to Social Security legislation.

CAFTA, an ambitious trade pact with six Latin American nations, is shaping up as the most contentious trade measure on Capitol Hill since President Bush won trade promotion authority in summer 2002 by a single vote.

It is considered a referendum on trade policy and will signal to other nations in the region whether the administration can negotiate and win passage of new trade agreements.

“The window of opportunity right now is open. With CAFTA, the longer it sits around and the longer the forces against it marshal themselves, the more difficult the fight could be later on,” said an administration trade official, who asked not to be named.

The official said the White House would like to get the agreement through the House Ways and Means and Senate Finance committees before the panels begin considering Social Security reform.

“It’s our goal to create a sense of inevitability that the vote is coming,” the official added.

The administration is talking with congressional leaders to set a specific schedulefor timing for the vote, though a Senate aide said “it would certainly be nice to get it done before the summer.”

CAFTA would reduce tariffs and create new trade and investment rules with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The six countries together are America’s 12th largest export market and 15th largest import supplier, with trade in goods valued at more than $30 billion a year.

The pact is “likely to have a minimal impact on production, employment or prices” in the United States, a U.S. International Trade Commission report said.

But it is a cornerstone of Bush administration policy in the region.

“CAFTA is still the president’s number one trade priority. It will be the key trade vote in Congress this year,” said Rep. Kevin Brady, Texas Republican and the administration’s point man for the agreement in the House.

The White House and governments in Central America say the pact creates economic opportunity and cements political reforms in a region that was a Cold War battleground and continued to be wracked by violent civil strife into the 1990s.

The CAFTA vote also will signal congressional support for ongoing negotiations, including the Free Trade Area of the Americas, with 34 democracies in the Western Hemisphere, and bilateral pacts with Panama, Peru, Colombia, Ecuador and other developing nations.

Broad business coalitions — including banks, insurance, software and entertainment industries — support CAFTA. Many manufacturers and farmers also support the deal, though those groups are not unanimous.

Multinational apparel companies, for example, see an alliance with Central America as the best way to fend off competition from cheap-labor China, while some domestic textile companies say the pact will cost U.S. jobs.

Likewise, many U.S. grain farmers think the pact will allow them to increase exports, while sugar farmers say they will be driven out of business by cheaper imports.

The pact also faces opposition from those who worry that the pact does not protect worker rights and would encourage companies to relocate to countries where environmental standards are not enforced.

“The major issue is the failure of the agreement to address the realities of globalization and how they [affect] the lives of Americans and the lives of people in other countries,” said Rep. Sander M. Levin, Michigan Democrat and a party leader on trade issues.

Mr. Levin said he is especially concerned that the pact calls on the Latin nations to enforce their own labor and environmental laws, rather than setting standards and providing a mechanism to enforce them.

The administration probably will need some Democratic support to pass the agreement. Twenty-five House Democrats in 2002 voted for the barely passed trade promotion authority, a law that empowers the White House to negotiate trade agreements and send them to Congress for a yes-or-no vote, without amendments.

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