White House faces fight over growth of free trade

5/15/2005

WASHINGTON - The White House is growing increasingly worried that one of President Bush's top initiatives - ratification of the Central America Free Trade Agreement - could go down to defeat, creating a major blow to his efforts to promote free trade.

This past week Mr. Bush brought the presidents of the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Costa Rica to the White House to insist that passage of CAFTA is vital to U.S. interests and important to spreading democracy.

Standing on the steps to the Rose Garden, Mr. Bush thundered his support for the trade pact and said that the more freedom there is in America's own backyard, "the safer and more prosperous all of the Americas will be."

With passion, he argued, "The Central America and Dominican Republic free trade agreement presents us with an historic opportunity to advance our common goals in an important part of our neighborhood. By passing this agreement, we would signal that the world's leading trading nation was committed to closer partnership with countries in our own backyard, countries which share our values."

But all indications are that if the vote to ratify the treaty were held now, Mr. Bush could lose.

Mr. Bush signed the treaty a year ago to open markets of 44 million more consumers to American goods, services, and agricultural products. But even in the Republican-controlled House, the pact has run against opposition.

One of the leaders of the Democratic opposition is Toledo's Marcy Kaptur, the senior Democratic woman in the House, who fought without success against ratification of the North American Free Trade Agreement in 1994 and argues that CAFTA would be as detrimental to workers and the environment as she insists NAFTA was.

She says she has been gratified that more House Republicans are being recruited to fight CAFTA than fought NAFTA. One significant reason is not her contention that free-trade agreements cost Americans jobs as companies move operations to cheaper countries but that Republican lawmakers represent southern states that produce sugar and textiles and do not want an influx of cheap foreign sugar and foreign textiles.

If CAFTA goes into effect, sugar producers from Central America would be permitted to increase exports to the United States by 150,000 metric tons of over 15 years. The domestic sugar industry says that would crush it.

U.S. textile manufacturers, who have been hit hard by cheap imports of clothing from China, say they are taking a stand against CAFTA unless the Bush administration clamps down on trade with China.

Fear of China's growing economic clout in the world is another key element of the opposition to CAFTA. Instead of the Bush administration's mollifying words about China, they want to hear red-meat attacks on China's trade practices. Commerce Secretary Carlos Gutierrez told reporters at a recent breakfast session that the administration refuses to equate CAFTA with trade problems with China.

Denying those who say NAFTA has hurt American workers, Secretary Gutierrez said that NAFTA has been a success and a good precedent for assuming CAFTA would be good for the United States as well.

In the Senate a prominent Republican, Sen. Lindsey Graham of South Carolina who is the co-chairman of the CAFTA Action Caucus, is trying to defeat the trade deal.

His co-chairman, Sen. Byron Dorgan (D., N.D.) said this week that he thought Mr. Bush's bringing six foreign presidents impacted by the trade deal to lobby Congress was "unprecedented and desperate lobbying" by foreign heads of state.

Honduran President Ricardo Maduro this past week conceded that some U.S. manufacturing groups may be hurt by the deal but that he considers CAFTA a "main pillar" in keeping his region stable. He said the agreement would reduce crime, including narcotics trafficking. "I guarantee you if we lose more democracies in Central America, that is going to be bad news for the United States," he said.

Mr. Dorgan and Mr. Graham say they are going to block CAFTA because it is representative of failed trade pacts that have created a string of record-breaking trade deficits where the United States once had trade surpluses.

They are strongly supported by Sen. Harry Reid (D., Nev.), the Senate minority leader. His major argument is that the nation is on the verge of having a trillion-dollar trade deficit, which he thinks would be a catastrophe, and says CAFTA would make the deficit even worse..

Rob Portman, a former Ohio Republican congressman who has just been confirmed as the U.S. trade representative, says that CAFTA is an historic opportunity to cement democracy in the Western hemisphere and that the leaders of Central American countries have every right to try to convince Americans the trade deal is a good one for everyone involved.

He also argues that more factories will move to Asia if CAFTA is not ratified. As for lax worker standards and environmental standards in Central America, he says they will improve as they deal with the United States and that the benefits of creating new markets for American workers and farmers are worth the trade off.

But the National Farmers Union a few days ago said it is opposing the trade deal because it poses "a significant threat to family farmers and ranchers." The group's president, Dave Frederickson, said, "We've heard these promises of prosperity of trade agreements in the past. For a variety of reasons they never seem to come true. I do not see what makes this one any different."

The more opposition that has been expressed, the more opponents are coming out to oppose CAFTA. This past week a number of Latino civil rights and immigration activists opposed CAFTA for forcing signatory countries to "rewrite their domestic policies to conform to new patent rules that will increase medicine prices and undermine access of poor farmers to seeds."

A former member of Congress, Esteban Torres, a Latino leader with Hispanic Action, said this past week the major reason to oppose CAFTA was the failure of NAFTA, which he voted for when he was in the House. "While the intentions of NAFTA were good, I now know that NAFTA in reality has been a tragic failure. I sided in support of NAFTA, but today I look back on it as a broken promise. With Congress considering the arguments used by CAFTA proponents, the themes strike hauntingly familiar chords to those used in favor of NAFTA. Those that make them have failed to learn from the last 11 years. CAFTA, based upon the failed NAFTA model, will only make a bad situation worse."

The National Association of Manufacturers, which calls CAFTA an "unambiguous winner," and the U.S. Chamber of Commerce, which has been surprised by the swift growth of the opposition to CAFTA, insist just as passionately that NAFTA has not failed.

Votes in Congress may occur this month although it is not clear whether there will be compromises - side agreements - that the Bush administration does not want but may have no choice but to accept if the White House is to avoid an embarrassing defeat.

Contact Ann McFeatters at: amcfeatters@nationalpress.com or 202-662-7071.