Senate OKs CAFTA; Fight Expected in House

The Senate on Thursday approved a controversial free-trade agreement that eliminates tariffs on U.S. goods and services in six Latin American countries, but the measure still faces an uncertain future in the House despite strong backing from President Bush.

In approving the Central American Free Trade Agreement 54 to 45, the Senate gave Bush a welcome legislative victory at a time when much of his domestic agenda, including an overhaul of Social Security and changes in immigration laws, has stalled. Ten Democrats and independent James M. Jeffords of Vermont joined 43 Republicans in supporting the measure.

CAFTA received a second boost Thursday as the House Ways and Means Committee approved it, sending the measure to the House floor for what is expected to be a hard-fought vote in the coming weeks.

Even though it involves a modest $15-billion-a-year market, CAFTA has become a focal point in the larger dispute over free trade and globalization, especially among Democrats who contend that it may cost American jobs and lacks sufficient protections for Latin American worker rights and for the environment.

Some Republicans in sugar cane and sugar beet growing areas, as well as some representing textile states, also have expressed doubts about CAFTA’s effect on important local industries.

It was primarily these concerns that accounted for the 12 Republican senators who voted against the measure Thursday, but last-minute concessions on sugar fattened the GOP total in the Senate. Sens. Saxby Chambliss (R-Ga.) and Norm Coleman (R-Minn.) announced their support Wednesday after Agriculture Secretary Mike Johanns agreed to cap sugar imports until 2008 and to study subsidizing the use of sugar to make ethanol.

“We got a deal,” Coleman explained in an interview. “My only concern was sugar.”

Sen. Dianne Feinstein (D-Calif.), who opposed the North American Free Trade Agreement and similar free trade agreements with Chile and Singapore out of concern for environmental protection and potential U.S. job losses, voted for CAFTA. Sen. Barbara Boxer (D-Calif.) voted against it.

The Bush administration has contended that CAFTA, signed in August, would help ease America’s trade deficit by allowing the U.S. to compete more effectively against China, especially in the clothing market. Garment factories in Central America and the Dominican Republic make up the second-largest market for U.S. textiles.

And the American Farm Bureau estimates that CAFTA would expand U.S. agricultural sales by $1.5 billion annually.

Bush personally has touted the agreement, saying that it would raise living standards in the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The president called that “good immigration policy.”

Under present rules, about 80% of Central American products enter the U.S. duty free. In effect, CAFTA makes that reciprocal by eliminating nearly all barriers to the sale of U.S. goods, services and farm products in Central America.

The measure “levels a playing field that presently is a one-way street,” said Sen. Charles E. Grassley (R-Iowa), chairman of the Finance Committee and CAFTA’s floor manager. “I prefer to call this a fair-trade agreement,” he said. “The other side has free trade already.”

In a harbinger of the fight awaiting both sides in the House, several Senate Democrats who previously strongly supported free trade inveighed against CAFTA, saying that it typified the Bush administration’s “pattern of misplaced priorities.”

In the House, a number of Democrats who have supported free trade in the past also are fighting CAFTA.

But Rep. Kevin Brady (R-Texas), the CAFTA leader in the House, found the margin of victory in the Senate encouraging “given how partisan this thing’s been.” Brady accused Democrats of opposing CAFTA largely to deprive Bush of a victory.