CAFTA approved by US House
Central American Free Trade Agreement Approved by U.S. House
July 28, 2005 (Bloomberg) — The U.S. House of Representatives approved the Central American Free Trade Agreement, overcoming objections by unions, sugar producers and textile makers in what became the most contentious trade fight in Congress in a decade.
The vote was 217-215 in favor of Cafta and was held just after midnight Washington time. With only a minor procedural step in the Senate ahead, today’s vote effectively completes what was more than a yearlong process for U.S. ratification of Cafta.
The agreement ends most tariffs on more than $33 billion in goods traded between the U.S. and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. It also makes permanent the duty-free access to the U.S. that most products from Central America now have.
President George W. Bush, who reached agreement with the first of the six nations in 2003, made Cafta the centerpiece for his trade agenda this year. He primarily sold the measure to lawmakers on the premise that it would solidify democratic gains in a region wracked by civil war, curb the threat of terrorism and build momentum for a World Trade Organization accord.
The administration was able to garner just enough votes by pledging to maintain caps on sugar imports, getting commitments from Central America to renegotiate some textile export provisions, and by meeting with U.S. lawmakers at least twice this week about Cafta’s geopolitical'' necessity.
The administration won't continue toexpand this energy and capital on these smaller agreements,’’ said former U.S. Trade Representative Clayton Yeutter, a lawyer at Hogan & Hartson LLP in Washington. There will be a great deal more attention paid'' to the WTO now, he said.
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Cafta was backed by most U.S. companies such as computer-chip maker Intel Corp., software developer Microsoft Corp. and pharmaceutical company Pfizer Inc., which say the trade deal will open up markets for their products and create momentum for further trade liberalization in this hemisphere and globally.
Legislatures in El Salvador, Guatemala and Honduras have already passed Cafta, while governments in Costa Rica, the Dominican Republic and Nicaragua are still debating the measure.
Most of the Democrats and some of the Republicans who opposed the agreement today, did so as part of a broader critique of Bush's trade policy. The U.S. trade deficit widened to a record $612 billion last year, driven partly by the largest bilateral gap in history with China.
Democrats, who met earlier today to ensure a united front against the agreement, also argue that Cafta wouldn't improve workers' rights and incomes in the region.Cafta is a step backward for workers in Central America, and a job killer for Americans,’’ House Democratic Leader Nancy Pelosi said in a speech on the floor. ``Nothing in the agreement will help raise sub-standard wages in the region.’’
