U.S., Others Agree to Rework CAFTA Rules

The U.S. and the six other nations in the Central American Free Trade Agreement agreed to renegotiate a key clothing provision in the accord to secure the support of Republicans representing textile districts.

The U.S. trade representative’s office, which had refused to amend the U.S.-Central American Free Trade Agreement, received a letter from the ambassadors of the six CAFTA nations agreeing to prohibit the use of non-U.S. pockets and linings in duty-free apparel from the region, House of Representatives Ways and Means Committee Chairman Bill Thomas (R-Bakersfield) said Tuesday.

CAFTA would end 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 would do away with a requirement that shirts, trousers and other items from the region can enter the U.S. duty free only as long as they are made from yarn or fabric produced in the U.S.

In a letter to Rep. Bob Inglis (R-S.C.) on Monday, Thomas pledged to push legislation through Congress that would change that, maintaining requirements on the pockets and linings being made in the U.S.

The CAFTA region has an economy smaller in size than Oklahoma, but the trade deal has become a focal point of criticism for the shortcomings of U.S. trade policy. CAFTA, which narrowly passed in the Senate last month, doesn’t have enough votes yet to clear the House, Thomas said. “We haven’t lost a trade vote yet, and I don’t intend to start now,” he said.

Democratic opponents of CAFTA criticized the new textile agreement, saying the Bush administration is unwilling to push for improving labor rules in the agreement in order to get broad bipartisan support, but is willing to change a small element on textiles in order to round up a few Republican votes.

“If they could do it for pockets and linings, I would hope they could do it for something as important as the core rights of workers,” said Rep. Sander M. Levin (D-Mich.), a member of the House Ways and Means Committee and a critic of CAFTA’s labor rules. “But there has been no flexibility on their part.”