- The Washington Times - Friday, June 17, 2005

Europe’s top trade official yesterday said Congress’ approval of the Central American Free Trade Agreement would “send a very positive signal to the rest of the world.”

“A lot of people outside of America are banking on this going through. We want to see it happen,” Peter Mandelson, the EU’s trade commissioner, said at a joint press conference with U.S. Trade Representative Rob Portman.

Mr. Mandelson is in Washington to discuss trade and economic issues before a summit between the United States and the 25-nation European Union next week.

The two trade officials discussed ongoing World Trade Organization talks, a dispute focusing on rival aircraft manufacturers Boeing and Airbus, as well as broader economic issues confronting governments on both sides of the Atlantic.

The CAFTA statement followed a press conference touching on the broader set of topics, and Mr. Mandelson did not elaborate.

But his comment indicates how important the pact with six Latin American nations has become to the broader Bush administration trade agenda.

“If CAFTA goes down to defeat, it is going to cast a chilling shadow over America’s trade agenda and our place in the global economy,” said Dan Griswold, director of the Center for Trade Policy Studies at the Cato Institute, a libertarian Washington think tank that supports the pact.

“CAFTA has huge symbolic importance beyond its economic impact. The rest of the world understands that,” he said.

Opponents, though, see CAFTA as simply bad trade policy. Democrats, especially, want more stringent labor standards negotiated into the pact.

“Sadly, the Bush administration ignored virtually all Democrats when it negotiated this CAFTA. Not surprisingly, virtually no Democrats support this CAFTA,” Rep. Charles B. Rangel, New York Democrat, said last week.

CAFTA would establish rules easing trade and investment among the United States, Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

The pact would have little impact on the overall U.S. economy, but would have an effect on some domestic sugar producers and textile manufacturers, coupled with broad opposition from organized labor.

Congress is expected to vote on the deal this or next month. Lawmakers vote yes or no; they cannot amend trade agreements, and a simple majority prevails.

A setback on CAFTA probably would undermine ongoing negotiations with other countries, especially Colombia, Ecuador, Peru and Panama — nations in the region that would face congressional opposition on similar grounds as the CAFTA countries unless the administration were to take a different approach.

The Free Trade Area of the Americas, with 34 nations in the hemisphere, already is stalled and U.S. efforts to build a series of blocs to pressure Brazil, Argentina and other reluctant countries would be stopped.

The administration and its supporters have argued that failure to approve CAFTA would harm ongoing WTO talks, which are focused on reducing agriculture subsidies and policies that harm poor countries.

Mr. Portman yesterday acknowledged that WTO talks had “lagged,” and called for a renewed effort by U.S., EU and other world leaders to reinvigorate the talks.

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