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Senate panel considers Cafta trade pact: Vote won’t occur until Wednesday at earliest

Senate panel considers Cafta trade pact
Vote won’t occur until Wednesday at earliest

By William L. Watts, MarketWatch

June 28, 2005

WASHINGTON (MarketWatch) - The Senate Finance Committee won’t hold an important vote on the controversial Central America Free Trade Agreement before Wednesday, delaying action on the pact by at least a day.

Panel chairman Chuck Grassley, R-Iowa, cited scheduling conflicts and other votes for the delay. The panel spent around an hour Tuesday discussing the treaty and will meet again Wednesday morning.

The delay comes as administration officials, lawmakers and representatives of the sugar industry have begun meetings designed to address the lobby’s objections to the pact.

Sen. Max Baucus of Montana, the panel’s senior Democrat, criticized a sugar-related proposal from the administration as inadequate, and criticized the administration for not working more closely with sugar producers.

The proposal would aim to keep sugar imports below a certain threshold set in the current farm bill by paying the Cafta countries in cash or commodities not to ship sugar to the United States, news reports said.

"The offer is nothing new. Essentially [Agriculture Secretary Mike Johanns] has offered to do what the law already requires him to do - purchase surplus sugar in the U.S. market. That is no deal and I am disappointed that some may use this as a thin cloak to vote for a deal that is unambiguously bad for the sugar industry," Baucus said.

Agriculture Secretary Mike Johanns, U.S. Trade Representative Rob Portman "and others have said they want to find a solution to the sugar industry’s concern with Cafta. But instead of taking the time to work on this issue in good faith the administration has rushed ahead with this bill," Baucus said.

Sen. Craig Thomas, R-Wyo., said he also feared the administration was moving too fast.

Thomas, who voted in favor of the agreement in a test vote earlier this month only after the administration agreed to participate in talks with sugar producers, said the administration’s sugar proposal was a "good plan," but too short-lived. The plan would expire at the end of 2007, along with the provisions of the current farm law, Thomas said.

The CAFTA agreement is backed by most major industry trade groups, but has faced stiff opposition from sugar producers, some textile manufacturers and labor unions. Opponents contend the pact gives Central American nations an advantage due to lax labor and environmental standards.

The House is expected to present the toughest hurdle to the agreement, which would establish a Nafta-style agreement between the United States, Nicaragua, Honduras, El Salvador, Guatemala and Costa Rica, and would provide a linked agreement with the Dominican Republic.

The House Ways and Means Committee plans to take up Cafta on Thursday.

Under the fast-track trade negotiating authority that Congress granted the White House in 2002, trade agreements can’t be modified by the House or Senate. Lawmakers can only vote up or down on legislation that would implement trade agreements negotiated by the administration.

The White House formally submitted the legislation to Congress last week. Under fast-track, that gives Congress 90 working days to approve or reject the legislation.

William L. Watts is a reporter for MarketWatch.

 source: Market Watch