CAFTA Passes the Senate

[Annie]

http://www.nytimes.com/2005/07/01/politics/01trade.html?th&emc=th

July 1, 2005
Senate Approves Central American Free Trade Pact
By EDMUND L. ANDREWS

WASHINGTON, June 30 - After a bitter and prolonged battle over the promises and perils of foreign trade, the Senate voted on Thursday to approve the Central American Free Trade Agreement.

The vote of 54 to 45, which came after weeks of efforts to placate angry sugar producers and other interest groups, was a major victory for President Bush at a time when Republicans and Democrats alike have been alarmed about soaring imports from low-cost countries.

The vote set the stage for an even more difficult fight in the House, where opposition to the trade pact is strong among lawmakers from textile regions in the South, manufacturing states in the Midwest and sugar- producing areas like Florida, Louisiana, Minnesota and Wyoming.

The pact would eliminate most trade restrictions on about $32 billion in annual trade with the Dominican Republic and the five Central American nations of Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua.

Though the volume of trade involved is tiny in comparison to that with China or Europe, both Mr. Bush and his opponents have viewed the pact as a crucial touchstone to the broader challenges of globalization.

For President Bush, the agreement is important as a model for bigger trade deals that would expand export opportunities for American farmers and factories. Mr. Bush and his supporters also say the pact would provide crucial support to fragile democracies that have close economic and political ties to the United States. A defeat would have seriously impaired his credibility as the White House is entering difficult international negotiations on ending agriculture subsidies and opening up global trade in services.

"This is a gateway to other agreements," said Rob Portman, the United States trade representative. "If this agreement goes down, it will signal to the rest of the world that America's leadership role in trade is being abdicated."

Critics, including most Democratic lawmakers, charged that the deal would accelerate the shift of American jobs to countries where workers earn a few dollars a day and where labor-protection laws exist mostly on paper....

 

[5stringJeff]

Yay for free trade!!! I hope this passes.

 

[Big Blue Machin]

Don't worry, it will.

 

[Isaac Brock]

I wonder how CAFTA as it relates to NAFTA farm subsidies will play out. There now will be increased agricultural pressure both from the north and the south for potentially less costly agricultural and food products. I can see this undermining many farming families in the United States from their traditional standard of living, while call into question the legality and/or economic viability of farm subidies or in Canada's case, the Canadian Wheat Board.

If over time US farmers do receive increased subsidies in whatever form, it will further weaken their position to sue other ag markets at the WTO like Canadian grain, barley and European imports.

 

[Adam's Apple]

Pretty interesting column by Tom Friedman on CAFTA

http://www.nytimes.com/2005/06/24/opinion/24friedman.html?th=&emc=th&pagewante...