Senate OKs Central American Free Trade Agreement

WASHINGTON -- The Senate on Thursday endorsed a free trade agreement with six Latin American nations, handing a major win to President Bush, who has promoted the accord as a mark of U.S. commitment to democracy and prosperity in the hemisphere.

The vote was 54-45 in favor of the Central America Free Trade Agreement, setting the stage for a final battle in the House, where the agreement's many critics have vowed to defeat it.

"The stakes could hardly be higher," said Sen. John McCain, R-Ariz., a supporter. "It's important because at stake is the future of Central America in its economic and political dimensions and hence its security dimensions."

U.S. officials signed the agreement a year ago with the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua as well as the Dominican Republic in the Caribbean. It needs congressional approval to go into effect, however.

Action in Congress has been slowed by strong opposition from Democrats, who say its labor provisions are too weak and will lead to continued worker rights abuses in the region, and lawmakers from sugar beet and sugar cane-growing areas, who say it will hurt local industries.

Bush said the agreement was "good for American workers, good for our farmers and good for small businesses."

"The agreement is also a strong boost for young democracies in our own hemisphere, whose success is important for America's national security and for reducing illegal immigration," Bush said.

The Bush administration, which has never lost a trade battle in Congress, has turned on the pressure in recent weeks. Bush has met with all six CAFTA leaders at the White House and administration trade officials have been camping out on Capitol Hill, seeking to win over undecided lawmakers.

One argument has been that the defeat of CAFTA would be a blow to the U.S. leadership position in future market opening negotiations with the World Trade Organization and other Western Hemisphere nations.

Supporters also stressed that CAFTA would be a bulwark to protect the hemisphere from further inroads by China.

Sen. Ron Wyden, D-Ore., said "the Chinese would love an opportunity to get an economic toehold in our backyard," an opportunity supporters said would open up if CAFTA were rejected.

The agreement would eliminate, immediately or over time, almost all tariffs and other trade barriers to U.S. imports. It would provide better protections for U.S. patents and trademarks and digital software such as music and videos, and establish a legal framework for U.S. investment.

Led by U.S. Trade Representative Rob Portman and Agriculture Secretary Mike Johanns, the administration has had some success in answering lawmakers' concerns about labor and sugar.

Sen. Jeff Bingaman, D-N.M., said he would vote for the agreement after Portman pledged U.S. financial aid to help the Latin American countries strengthen their labor laws and assist poor farmers who might be hurt by competition from American imports.

Agriculture Committee Chairman Saxby Chambliss, R-Ga., and Sen. Norm Coleman, R-Minn., also came out for the accord after the administration offered concessions to protect the sugar industry. Those included a pilot program to determine whether a sugar-based ethanol initiative is feasible.

But much of the industry said the administration's offers were insufficient, and several senators from sugar beet states agreed. The usually pro-free trade Sen. Max Baucus, D-Mont., said, "Those of us who have sugar producers in our state still do not know for sure what CAFTA means for our constituents."

Sen. Pat Roberts, R-Kan., a supporter, said free trade fatigue had made approval of CAFTA more difficult than other recent agreements with Chile, Singapore, Australia and Morocco.

He said the benefits of free trade agreements are often overstated, and farmers in his state were "a little weary and a little wary of this animal that we let out of the chute and call free trade."

The six CAFTA nations now import about $15 billion worth of American products annually, making the region the 13th largest U.S. market.

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The bill is S. 1307.

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On the Net:

Congress: http://thomas.loc.gov/

U.S. Trade Representative: http://www.ustr.gov/