Bush, Congress to Battle Over Trade Pact

The Bush administration, after four years of moving free trade (search) deals through Congress, faces its toughest test in trying to bring six Latin American countries into the open U.S. market that now includes Mexico and Canada.

The votes weren't there in 2004 and may not be this year either because of fears among U.S. sugar and textile producers. President Bush says the accord would open new markets for U.S. goods and services while encouraging economic and democratic reforms in Central America.

The United States signed the Central American Free Trade Agreement (search) with El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica last May. The Dominican Republic signed later.

In the House, always a tougher sell for free trade agreements, most Democrats said CAFTA's labor and environmental standards were too weak and would lead to abuses. Republicans whose sugar and textile industry constituents feel threatened by Central American competition joined with the Democrats to erect an insurmountable hurdle last year.

This year, winning passage will be "difficult but doable," said Rep. Kevin Brady, R-Texas, the agreement's leading proponent in the House. Supporters, he said, hope to pick up about 25 Democrats who believe in the benefits of expanded trade and the importance of strong ties with Central America.

The administration has crafted similar alliances in past trade victories — the Jordan free trade agreement of 2001, the 2002 vote to give the president "fast track" authority (search) to negotiate trade deals, and free trade deals with Chile and Singapore in 2003, followed by deals with Australia and Morocco last year.

The stakes are higher this year. CAFTA is the most significant multilateral pact for the United States since the North American Free Trade Agreement (search) with Mexico and Canada more than a decade ago. It is seen as crucial to the greater goal of establishing a free trade zone for all the Western Hemisphere.

Michigan Rep. Sander Levin, the Democrats' leader on trade issues, said in a recent speech that "CAFTA is in trouble." It neither alleviates the income divide between the poor and wealthy in Central America nor ensures that American workers can compete on a level playing field with Central American workers, he maintained.

The Bush administration has dispatched missions to Los Angeles, Dallas, Tampa, San Antonio and other cities with large Central American populations to press its case. This month Assistant U.S. Trade Representative Christopher Padilla joined Central American ambassadors on a bus tour through North Carolina, carrying a message that CAFTA will help protect textile industry jobs.

Garment factories in Central America are major purchasers of fabric and yarn from the United States. Padilla, in an interview, said lawmakers in North Carolina and other textile states are coming to see that "only by uniting together through CAFTA will the textile makers in the Southeast states and apparel makers in Central America be able to face the oncoming competition from China."

He also emphasized that CAFTA would not change tariffs now imposed on sugar imports above the set quota and that increased sugar imports under the agreement would be "minuscule," about a teaspoon and a half per week for every American in the first year.

Nearly 80 percent of Central American products already enter the United States duty-free. Supporters say the agreement will heavily favor U.S. producers by giving them increased access to Central America's markets for their goods and services.

They also contend that the agreement, which requires countries to enforce internationally recognized labor and environmental standards, will strengthen the region's fragile democracies.

Brady said CAFTA countries have emerged from years of war and dictatorial rule to make major steps toward promoting democracy and human rights. "Kicking them down the ladder would be a major mistake," he said.

Hispanic groups are not united on CAFTA, their desire to improve living standards in Central America tempered by questions over whether the pact will indeed help workers there.

Brent Wilkes, executive director of the League of United Latin American Citizens, said CAFTA will help big business far more than it does workers, and that the labor and environment standards are weaker than those in NAFTA. He said his group would prefer to see a trade agreement as part of a larger package that would legalize Latin American workers in the United States.

The Congressional Hispanic Caucus has not taken a position on the agreement, but 16 of its members recently sent a letter to former U.S. Trade Representative Robert Zoellick expressing hope that CAFTA supporters will not resort to labeling its opponents "anti-Hispanic."

"Both sides can and should debate the substance of CAFTA, including its impact on Latinos in the U.S. and Central America, without resorting to name-calling," they said.