Star Tribune, Minneapolis
2 Minnesotans hold CAFTA cards
Star Tribune Washington Bureau Correspondent
Published July 25, 2005
WASHINGTON, D.C. — In a showdown that could be a defining moment in President Bush’s second term, Congress is preparing to vote this week on the proposed Central American Free Trade Agreement (CAFTA).
And all eyes are on two Republican congressmen from Minnesota.
Rep. Mark Kennedy, who recently announced his support for the agreement, is getting deluged with urgent pleas to change his mind. He received a visit this month from a caravan of sugar beet farmers angry and worried about how the looming vote could affect their livelihoods in Minnesota’s Red River Valley, one of the nation’s top sugar-producing regions.
Rep. Gil Gutknecht, among the few House members who have not yet taken a position on CAFTA, is known as both a conservative free-trader and a prairie populist. Since the House vote on the agreement is expected to be close, his choice could prove decisive.
Last-minute lobbying over the trade agreement is intense. The sugar industry has pumped more than $306,000 into congressional political coffers in the past six months.
Half of that, about $163,000, came from political action committees and individuals associated with American Crystal Sugar and the Southern Minnesota Beet Sugar Cooperative, two of the state’s perennial top political contributors.
"Minnesota is hot," said Phillip Hayes, a spokesman for the American Sugar Alliance, an industry group leading the fight against CAFTA. "The state is very important for us."
Political unease over soaring trade imbalances is increasing in both parties, making CAFTA a pivotal referendum on trade.
Gutknecht’s silence on the trade agreement is increasing the suspense around the vote. It is also putting more lobbying pressure on Kennedy, a U.S. Senate candidate who was undecided about the treaty until the end of June, when the Bush administration added protections for U.S. sugar growers.
That deal, brokered with the help of Sen. Norm Coleman, R-Minn., cleared the way for Senate passage of the treaty by a 54-45 vote. It was a major victory for Bush. But it set the stage for a difficult fight in the House.
U.S. sugar producers remain adamantly opposed to CAFTA. They contend that easing trade regulations with the six low-wage nations covered by the deal — El Salvador, Honduras, Nicaragua, Guatemala, Costa Rica and the Dominican Republic — will bring tons of additional cut-rate sugar into the United States. Coupled with new sugar imports from Mexico and a pending trade deal with Thailand, passage of the trade agreement is viewed by the producers as the beginning of the end of the domestic sugar industry.
Since January, sugar growers have donated $6,500 to Gutknecht and $7,200 to Kennedy, who they still hope to win over before the vote.
Kennedy said that is unlikely.
"What would ’Mr. Smith Goes to Washington’ do in a case like this?" he said, noting that the majority of his farm constituents favor the treaty.
But the pressure continues, and it’s not just on lawmakers.
"I feel an obligation, a moral pressure," said Octavio Ruiz, a labor activist with the Minnesota Fair Trade Coalition, which helped organize a rally this month at Kennedy’s St. Cloud office. "This is all I have been eating and sleeping for months."
Labor groups call CAFTA a symbol of the larger debate over globalization and its effects on labor and human rights standards.
The stakes are just as high for Bush and business groups, who consider CAFTA a vital part of the administration’s free-trade agenda. GOP leaders are telling their ranks in the House that CAFTA’s defeat could help make the president a lame duck.
Unlike the 1994 North American Free Trade Agreement (NAFTA) with Canada and Mexico, which passed with widespread Democratic support, CAFTA will likely need an overwhelming number of Republican votes to pass. House leaders say they may delay a final vote on the trade agreement unless it appears they have significant bipartisan support.
Some centrist Democrats have lined up behind CAFTA, warning that their party could be hurt by an anti-trade stance. Others are echoing Republican arguments that the trade agreement could spur social reforms in Central America.
Still, all the Democrats in Minnesota’s congressional delegation oppose CAFTA, while all the Republicans have come out in favor — except for Gutknecht.
Gutknecht, who declined to be interviewed, has come to personify the unease that other rural Republicans who represent sugar regions in states such as Florida, Louisiana and Minnesota have about the agreement.
In Minnesota, opponents of CAFTA are trying to turn up the heat on Gutknecht, as well as Kennedy and Coleman, who announced support for the agreement recently. Rep. Collin Peterson, a Democrat who represents the Red River Valley, said that Kennedy has hurt his 2006 Senate prospects by breaking with the state’s $2 billion-a-year sugar industry, which supports more than 32,000 jobs.
’Burn their bridges’
Kennedy argues that the state’s sugar growers will be protected by administration guarantees to divert excess imports into a new ethanol program.
Minnesota sugar growers counter that the deal gives them no more protection than what current import quotas allow.
CAFTA backers have tried to isolate sugar growers by touting expected gains in other farm exports. Some estimates show Minnesota’s sugar industry taking a $13 million hit from increased sugar imports under CAFTA, while the state’s overall farm exports would increase by $47 million.
Many large agriculture groups, including the American Farm Bureau Federation, strongly support CAFTA. That has made life a little easier for Coleman and Kennedy, who can point to broader benefits for the state’s farmers.
"The most important thing the sugar industry could do is not burn their bridges with other farm groups that all support the treaty," Kennedy said.
The industry begs to differ. As the House vote approaches, the state’s sugar lobby has issued a statement saying, "We know what’s best for us."