Senate Endorses Easing of Latin Trade Barriers

The Senate gave broad bipartisan approval Wednesday to a bill to lower trade barriers for two dozen developing nations of Central America and the Caribbean that have long pressed to join North America’s lucrative free-trade zone.

The 76-19 vote could lead to enactment of the few pieces of significant trade legislation since Congress approved U.S. participation in the World Trade Organization in 1994.

While the bill would stop short of bringing the Caribbean Basin into the North American Free Trade Agreement--comprised of Mexico, Canada and the United States--it would offer the region modest new openings into the U.S. market for such goods as clothing, footwear, watches, tuna and petroleum.

Caribbean nations have complained that since the passage of NAFTA they have lost thousands of jobs as apparel and other manufacturers moved to Mexico to exploit the advantageous trade rules.

The Senate bill, supported by President Clinton, would also grant trade benefits to 48 nations in sub-Saharan Africa. In exchange, participating countries are supposed to encourage open-market and democratic reforms. Before the Senate bill can become law, it must be reconciled with a version the House approved last summer that exclusively targets Africa.

Backers were hoping to finish the legislation in time to demonstrate a U.S. commitment to free trade before a World Trade Organization summit begins this month in Seattle. They also acknowledged that many leaders of impoverished nations were closely following the vote, eager for a positive signal on trade from the world’s wealthiest nation.

The vote, said Sen. William V. Roth Jr. (R-Del.), chairman of the Finance Committee and chief sponsor of the bill, “gives a clear statement to our neighbors in the Caribbean, Central America and Africa that we are willing to invest in a long-term economic relationship--a relationship of partners in a common endeavor of expanding trade, enhancing economic growth, and improving living standards.”

Further, Roth said, the Senate had sent “a very clear signal” to the world that “liberal trade policies are still supported, overwhelmingly.”

California’s two Democratic senators were split, with Dianne Feinstein supporting the bill and Barbara Boxer opposed.

A Boxer spokesman, David Sandretti, said the senator faulted the bill for failing to give adequate protections to workers and the environment and for leaving African nations with a crippling foreign debt burden.

Other senators from textile-producing states, led by Sen. Ernest F. Hollings (D-S.C.), complained that the trade bill would unleash a flood of cheap textile and apparel imports into the United States and cost jobs for the domestic industry.

The shape and timing of a final trade bill were still unclear late Wednesday. John Feehery, a spokesman for House Speaker J. Dennis Hastert (R-Ill.) said he did not know whether it would be possible for leaders of the Senate and House to hammer out a consensus by the end of this year. A vital point in the talks will be whether the House will agree to include the Caribbean Basin in the bill. But Rep. Edward R. Royce (R-Fullerton), the chief sponsor of the African trade bill in the House, said he did not believe that would be a problem.

Analysts said passage of the bill could signal a modest degree of new momentum for free trade in U.S. politics on the eve of an election year. Gary Hufbauer, a senior fellow at the Institute for International Economics, a Washington think tank, said the vote was an encouraging sign of movement on trade policies “even though these are not big-stakes deals.”

U.S. exports to sub-Saharan Africa are worth just over $6 billion a year and to the Caribbean Basin, more than $20 billion. But those figures are dwarfed by U.S. trade with other parts of the world.

Other analysts pointed out that the stakes are higher for Central America, the Caribbean and sub-Saharan Africa than for the United States. The Caribbean Basin, said Peter Hakim of the Inter-American Dialogue, another Washington think tank, has more than 50 million people and “as much claim to being part of North America as Mexico does.”