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CROSSROAD
FOR CAFTA
Publication:
The Miami Herald
Printed: Monday, December 6, 2004
Written by: Jane Bussey |
A
boost in sugar quotas -- added as a sweetener to the Central American
Free Trade Agreement -- has soured crucial agricultural interests on
the largest proposed free trade deal for Latin America in a decade and
triggered an uphill battle for congressional approval.
No one expected strong Democratic support for the yet-to-be-ratified
trade agreement with Costa Rica, El Salvador, Guatemala, Honduras and
Nicaragua -- and the Dominican Republic tagged on -- because of complaints
over weak labor and environmental protection in the pact.
But the sugar and textile industries, normally supportive of trade agreements,
oppose provisions that would give the Central American countries higher
quotas for sugar or the ability to use textiles from countries other
than the United States for duty-free apparel access.
Opposition from these two industries is likely to diminish some Republican
support for the trade agreement and cut into the razor-thin margin the
White House has garnered on other trade agreements and needs to ratify
CAFTA.
The Bush administration remains confident it can win the vote at some
unspecified date when implementing legislation goes to Congress for a
''fast-track'' vote that only allows legislators to vote yes or no on
the accord.
''CAFTA is a great agreement,'' said Richard Mills, spokesman for the
Office of the U.S. Trade Representative. "We are consulting with
Congress, and we look forward to working on it in the next Congress.''
COALITION FORMS
Florida's sugar producers have joined with growers from Louisiana, Texas,
Colorado, Michigan, Minnesota and Wyoming to fight the accord. As negotiated,
CAFTA would immediately raise Central American and Dominican Republic
sugar imports by 100,000 tons, about a 10 percent increase above the
current level of U.S. imports. The industry warns that if larger sugar
imports are offered to all the other countries negotiating bilateral
trade deals with Washington, domestic growers are in danger.
This threat against the industry has spurred sugar companies into an
intense lobbying campaign, teaming up with the textile and apparel industry
and working in parallel with another loose coalition of labor, environmental,
religious, health and consumer activists.
''The coalition that is working against CAFTA is very united. We feel
pretty good about our vote count right now,'' said Robert E. Coker, senior
vice president at the Clewiston-based United States Sugar Corp., one
of the largest privately held agribusinesses in the United States.
U.S. Sugar, along with West Palm Beach-based Florida Crystals Corp. and
the Sugar Cane Growers Cooperative of Florida of Belle Glade, produce
some 2.15 million tons of sugar annually, about one-fourth of U.S. production.
Coker called the inclusion of sugar in CAFTA ''an enormous mistake,''
adding "it has generated a lot of opposition for nothing in return.''
In its fight against CAFTA, the powerful sugar lobby is targeting House
members and organized grass roots efforts: Louisiana growers have gathered
12,000 signatures to oppose CAFTA.
SLOW ACTION
The free trade accord has sat on the back burner for nearly a year since
negotiations concluded because passage was going to require a major battle
on Capitol Hill. Events have not been static elsewhere. In recent weeks,
Washington threatened to exclude the Dominican Republic after its Congress
imposed a domestic tax on U.S. exports of high-fructose corn syrup --
sending the country scrambling to change the law. Guatemala's decision
to repeal a law extending pharmaceutical patent protection an additional
five years -- an extension favored by Washington -- has annoyed the U.S.
drug industry.
But whether sugar, textile and grass roots opposition in the United States
will derail CAFTA is still a big question.
The impact of the trade pact is negligible for much of the U.S. economy;
the five Central American economies combined are about one-fifth the
size of Florida's economy.
But passage or defeat of CAFTA has a much larger symbolic importance.
'From the opponents' side, they say ''if we can defeat CAFTA, we can
derail trade liberalization,''' said Gary C. Hufbauer, a trade analyst
in Washington.
''If CAFTA goes down, the Free Trade Area of the Americas goes into some
kind of black hole,'' Hufbauer said. Resuscitating it would be difficult,
although not impossible, he added.
The practice of signing trade agreements with countries with small consumer
markets and big assembly industries has drawn criticism for economists
who worry about the burgeoning U.S. trade deficit. ''We keep negotiating
trade agreements with countries that can only be net exporters to us,''
said Alan Tonelson, a research fellow at the U.S. Business & Industry
Educational Foundation in Washington.
While it is harder to generate lobbying enthusiasm from large corporations
for small accords, the private sector is gearing up for the battle.
''CAFTA is the whole ball game right now,'' said Robert Filippone, former
trade advisor to Sen. Bob Graham and currently a lobbyist for the Pharmaceutical
Research and Manufacturers of America:
Filippone said he was optimistic that if the Guatemalan and Dominican
issues are resolved, a private sector coalition working for CAFTA could
win passage by one or two votes.
Hufbauer, a senior fellow at the Institute for International Economics,
agrees. ``It can be passed, but only if the president makes it a high
enough priority that he whips together practically all of the Republicans
in the House.''
The agreement would permanently extend duty-free access on apparel to
the Central American countries. The temporary preference program, which
has boosted South Florida's ports as stopover points for textiles and
apparel shipped to and from the Caribbean Basin, is set to expire in
2006.
Still numerous trade experts said that adding sugar to the CAFTA mix
was the ingredient igniting the battle.
The U.S. sugar industry supports negotiating sugar trade in World Trade
Organization talks, where negotiations are intended to address sugar
subsidies in Europe and Brazil that depress world sugar prices.
Most countries refrain from including sugar in bilateral trade accords
because the global sugar trade is complicated by numerous preferential
agreements and a slew of direct or indirect subsidies.
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