- The Washington Times - Wednesday, June 29, 2005

The Bush administration is gathering support for the Central American Free Trade Agreement, winning a key Senate vote yesterday while making deals with lawmakers to assuage concerns on sugar imports and labor rights.

The Senate Finance Committee approved CAFTA with a voice vote, setting up a vote by the full Senate as soon as this week.

CAFTA would bind the United States, Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua to a set of rules covering trade and investment.

The administration has promoted it as a way to open new markets for U.S. companies and to cement reforms in fragile democracies. But the deal has run into stiff opposition from unions, which say CAFTA will harm workers; sugar producers, who worry that imports will run them out of business; and some manufacturers.

Final passage in the Senate is considered likely, but the House, which is expected to vote in July, is still too close to call.

The administration won key support, though, after striking a deal on sugar. Sen. Saxby Chambliss, Georgia Republican, and Sen. Norm Coleman, Minnesota Republican, yesterday afternoon said the administration won their support, and they expected other lawmakers from sugar states to follow.

“We ended up negotiating an agreement with the administration that holds sugar harmless,” Mr. Coleman said.

The deal would leave intact a 1.5 million-ton cap on imports that is crucial to supporting U.S. prices. Sugar over the cap would be purchased by the Agriculture Department and made available for conversion into ethanol or another nonfood use, Agriculture Secretary Mike Johanns said in a letter to Mr. Chambliss. Central American sugar farmers also could be paid not to export to the United States.

The deal also keeps off the market sugar from Mexico, which under NAFTA is due an increase in sugar exports, and countries that strike trade agreements in the future. It lasts through 2007, when legislation governing farm programs expires.

The deal came after Sen. Max Baucus, Montana Democrat, and Sen. Craig Thomas, Wyoming Republican, voted against CAFTA in committee, largely because of concerns regarding sugar. It is not clear whether the deal will satisfy them.

It did not assuage the sugar industry.

“There is no deal, and it’s obvious that there will be no deal,” said Terry Jones, president of the American Sugarbeet Growers Association. Sugar farmers want a longer-term solution, he said.

The administration also picked up support with a pledge to support a $120 million allocation over three years on labor and environment enforcement, and as much as $150 million over five years on rural development in CAFTA countries.

The funds are not guaranteed, but Sen. Jeff Bingaman, New Mexico Democrat, said he swung in favor of the deal after receiving a letter from U.S. Trade Representative Rob Portman outlining the administration’s commitment to the spending.

The administration hopes the pledge also brings other Democrats into the pro-CAFTA fold — especially in the House.

“I think this will address some members’ concerns,” said a U.S. trade official, who asked not to be named.

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