Commentary : It’s Sale Time on American Jobs : Trade: Lifting tariffs on imports from Caribbean basin nations is unwarranted and beggars our own workers.

Small and mid-sized companies are questioning a $1-billion cash bonanza proposed for large apparel corporations that have sent thousands of jobs overseas.

A trade bill sponsored with the stated intent of spurring Caribbean and Central American economic growth instead is likely to funnel hundreds of millions of dollars into the pockets of large apparel corporations such as Cayman Islands-based Fruit of the Loom and major retailers such as the Gap stores.

By eliminating import tariffs on apparel and certain other goods imported to the U.S. from the Caribbean, the Senate bill will take about $1 billion out of the federal treasury over the next five years.

The bill’s supporters argue that this $1 billion will, somehow, end up back in the Caribbean, creating prosperity and building factories in the 24 countries to which it would apply. If that were true, this would be a bill deserving of our overwhelming support.

The truth is that it’s highly unlikely that a single cent will reach the Caribbean and Central American populations for which it is intended. The vast majority of this sum will go to a handful of huge American corporations whose lobbyists have spent three years and hundreds of thousands of dollars of “soft money” political contributions promoting the bill.

According to one published report, up to $200 million of this $1 billion is likely to go, over the next five years, to Fruit of the Loom, once a large employer in the U.S. and now the single largest employer in Honduras and El Salvador. That company has saved about $80 million a year by moving its U.S. factories to these cheap-labor nations. Fruit of the Loom has reincorporated in the Cayman Islands in order to avoid paying U.S. taxes. It’s hard to see why Congress should be offering financial aid to such a corporation.

Another trade journal has reported that a second $200 million is likely to go to Sara Lee Corp., a major American clothing company, which has sold or abandoned its domestic producers and now imports its goods, many under the Hanes brand, from overseas. Additional benefits will be seen by retail giants such as Wal-Mart and the Gap.

Left out of this discussion is the fact that, as trade with the region has flourished, wages paid to Caribbean and Central American workers have fallen dramatically. Since 1989, trade with Honduras and El Salvador has increased 2,500%, but wages in those countries have dropped by 59% and 27%, respectively. In some of these countries, 60% to 90% of the manufacturing base is already made up of transplanted American apparel companies.

The theory behind free trade with the Caribbean has always been that we will create a prosperous middle class in these countries that can then buy Apple computers and McDonald’s hamburgers. But under the current system, where exports skyrocket and wages tumble, workers in these countries will never be able to afford American products.

Instead of supporting the highly deceptive bill, Congress should set aside the $1 billion to implement a targeted economic policy that creates prosperity for Caribbean and Central American workers and promotes democracy for its citizens.