House showdown looms on trade pact By Susan Milligan, Globe Staff - July 1, 2005 - WASHINGTON -- The Senate yesterday approved a controversial free-trade agreement with five Central American countries and the Dominican Republic, setting up a showdown in the House over the most fought-over trade deal in a decade.

Breaking News Alerts The Bush administration and congressional supporters argue that the Central American Free Trade Agreement, or CAFTA, would open markets for US businesses and foster stability in a region that has suffered from poverty and political volatility. The pact's critics fear that easing trade restrictions with the six nations would lead to further erosion of manufacturing jobs in the United States and a tacit sanctioning of labor abuses abroad.

''If there's anything we need today, it's strong, viable economies in Central America" to encourage political stability and reduce illegal immigration, Senator John McCain, Republican of Arizona, said during floor debate. ''If people cannot feed themselves or their families where they are, they will go to places where they think they can. The stakes are very high."

The Senate's 54-to-45 vote followed a White House negotiation that brought on board two key senators who had worried about CAFTA's impact on the US sugar industry. The senators agreed to the trade deal with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic after the White House assured them they would provide protections for US sugar producers at least through 2007.

A win would give a political boost to the White House, which is struggling against lackluster support for the war in Iraq and the president's plan to create private Social Security accounts.

But the outcome is uncertain in the House, where Democrats and Republicans alike worry that the pact could result in the loss of more manufacturing jobs from their districts. ''Things are still very close" in the House, said Senate Finance Committee chairman Charles Grassley, Republican of Iowa and a chief proponent of CAFTA.

The trade deal -- which would eliminate nearly all tariffs on US imports to the region over the next decade -- is small, compared with other trade agreements approved in the past decade. The six countries in the CAFTA agreement bought about $15 billion in US goods in 2003. The nations' combined gross domestic product is about $100 billion -- less than one-tenth of the GDP of the United States, which hopes to sell more goods to the region, according to Dean Baker, co-director of the Center for Economic and Policy Research.

But CAFTA has become a potent symbolic fight about trade policy in general and the loss of US manufacturing jobs in particular. Democrats have seized on the job losses to paint the Bush administration as favoring big business more than US workers.

''The bottom line is this: CAFTA is not a good deal for America," said Senator John Kerry, Democrat of Massachusetts. ''The administration has turned a blind eye toward America's workers. I won't do that, and I hope my colleagues won't, either."

Many Democrats opposing the CAFTA package have voted for much broader trade deals in the past, including the North American Free Trade Agreement and the easing of trade barriers with China. But with US manufacturing jobs on the decline, those same lawmakers have made CAFTA a test of Congress's commitment to workers. ''Globalization is as inevitable as gravity," said Senator Dick Durbin, Democrat of Illinois. But ''I believe that this treaty is a mistake" because it does not protect US American workers from job losses or foreign workers from abuses such as child labor, he said.

The Bush administration has said it would seek $40 million a year to help CAFTA nations enforce labor and environmental laws. Opponents say the pledge isn't enough because workers don't have the right under the deal to lodge an official protest to violations of the trade pact.

The House Ways and Means Committee voted to approve CAFTA yesterday, and the full House is expected to take it up after Congress returns from its Independence Day break.

The White House hopes its deal on sugar -- which includes a study to determine whether sugar could be used to create ethanol, a gasoline additive -- will woo some lawmakers from states from Louisiana to Idaho, where sugar cane and sugar beets are grown. But lawmakers from farm states may balk at the bill, said Representative Jo Ann Emerson, Republican of Missouri.

Democrats and Republicans from agricultural districts are angry at the Bush administration's refusal to back efforts to reverse an administration policy enacted this year to make it harder to sell foodstuffs to Cuba, she said. Emerson said those lawmakers might be reluctant to extend trade advantages for Central America when Cuba is being shut out as a market, she said. ''Obviously, they're not serious about trade at all," she said.

© Copyright 2005 Globe Newspaper Company.
http://www.boston.com/news/nation/washington/articles/2005/07/01/senate_approves_controversial_cafta

Press Release Source: Electronic Industries Alliance

WASHINGTON, June 30 /PRNewswire/ -- Electronic Industries Alliance (EIA) President Dave McCurdy issued the following statement in reaction to the U.S. Senate's passage of the Central American-Dominican Republic Free Trade Agreement (CAFTA) this evening:

"With its passage of CAFTA, the Senate has voted to bolster economic development and expand the benefits of free trade for the U.S. and the nations of Central America. CAFTA will help the high-tech industry's domestic competitiveness by opening significant markets to U.S. exports, while promoting stability and economic growth in the Western Hemisphere. Last year, U.S. firms exported $15.7 billion worth of goods to the six CAFTA countries, and trade in electronics and high-tech products accounts for several billion dollars in exports alone. CAFTA's gains will also be realized quickly, since 99 percent of all U.S. industrial exports will receive duty-free treatment immediately upon implementation of the agreement. Additionally, CAFTA allows U.S. manufacturers to recover the cost of duties paid on materials imported from third countries and subsequently exported again. We commend the Senate's vote and the Bush Administration's work on this important trade measure. The Electronic Industries Alliance and its 1,300 high-tech, telecom, government I.T., and consumer electronics member companies now call on the House of Representatives to pass this legislation promptly."

About EIA: The Electronic Industries Alliance (EIA) is the leading advocate in Washington, D.C., for the U.S. high-tech industry. The Alliance is a partnership of electronic and high-tech associations and companies whose mission is to promote the market development and competitiveness of the $400 billion U.S. high-tech and electronics industries through domestic and international policy efforts. EIA's corporate members -- nearly 1,300 -- provide products and services ranging from microscopic electronic components to state-of-the-art defense, space and industry high-tech systems, as well as the full range of telecommunications and consumer electronics products. Headquartered in Arlington, Va., the Alliance is made up of the Electronic Components, Assemblies & Materials Association (ECA); the Government Electronics & Information Technology Association (GEIA); JEDEC; the Telecommunications Industry Association (TIA); and leading consumer electronics companies who participate in EIA's Environmental Issues Council.

Denver Justice & Peace Committee

ACTION APPEAL: APRIL 2005 CAFTA Talking Points

• If passed, CAFTA will threaten the livelihoods of millions of small farmers in Central America and the DR, while increasing domination by agricultural monopolies and hurting U.S. family farmers.
• CAFTA threatens to prevent access to affordable life saving medicines in a region where half the population live in poverty.
• CAFTA will prohibit governments in the region from ensuring that foreign investment serves national development goals, and has a provision like NAFTA's Chapter 11 that would allow foreign corporations to sue governments that pass strong labor, public health or environmental laws.
• CAFTA does NOT include adequate enforcement for violations of internationally recognized labor and environmental standards.
• CAFTA includes rules that promote privatization and deregulation of services including education, health care, postal service, construction, transportation and water supply. Such policies have proved particularly devastating for families living in poverty.
• CAFTA will pave the way for more trade agreements such as the Andean Free Trade Agreement and the Free Trade Area of the Americas which would extend this flawed model to the whole Western Hemisphere .

After 10 years of NAFTA, we know firsthand the devastating effects of this economic model. Expanding it in CAFTA ultimately threatens workers, farmers, women, the environment, and democratic institutions in the U.S. and the region. I strongly urge Representatives and Senators to stand up for trade justice by voting NO to CAFTA in Congress and sending the message to the Administration that U.S. trade policies must promote fair trade and sustainable development policies designed to reduce poverty in the U.S. and the region.”

Further background info you can use during your call:

Hundreds of civil society groups representing labor, environmental organizations, family farmers, consumers, Latin American solidarity, and immigrants' rights organizations have already expressed their opposition to CAFTA, and many Congressional Reps have taken this to heart. Though CAFTA has been ratified in 3 Central American countries despite huge protests and police violence this strong cross-border opposition to the agreement has prevented the Bush Administration from submitting it to Congress up until now. However, the clock is ticking and with the beginning of Senate and House hearings on April 13th and 21st, it is clear that CAFTA supporters are pushing for a vote by Memorial Day. The vote on CAFTA is effectively a referendum on NAFTA; if it is defeated, it will be mark a huge step towards stopping other such free trade agreements and open the way for an alternative trade model that truly addresses issues of poverty and inequality. A coalition of progressive organizations in the US is celebrating an April Week of on Trade by focusing on CAFTA.

http://www.denjustpeace.org/Legislative%20Updates/LegslativeupdateApril2005.html