Congressional Vote on Central America FTA ''Unlikely'' Before November Election
House Democrats accuse the White House of not ''engaging'' Congress in crafting the trade pact
WASHINGTON, DC - 06/03/04 - A congressional vote on the recently signed US-Central America Free Trade Agreement (CAFTA) is "unlikely" to take place before the November elections in the US, according to US Trade Representative Robert Zoellick.
At a recent press conference in Washington announcing the conclusion of a free-trade agreement between the US and Bahrain, Zoellick said that, given time constraints and opposition to the accord, the Bush Administration will probably wait until after the November elections to pursue a vote on the agreement between the US and the Central American nations of El Salvador, Guatemala, Nicaragua, Honduras, and Costa Rica.
Zoellick suggested that a congressional session following the elections may present an opportunity to approve the agreement before the end of 2004, but he acknowledged that remarks by presumptive Democratic presidential candidate Senator John Kerry of Massachusetts - who has vowed to veto and renegotiate CAFTA, if elected - complicate efforts to court the support of congressional Democrats.
At the same time, a number of congressional Democrats are accusing the Bush Administration of not engaging Congress in crafting CAFTA, and they are calling for modifications of the agreement.
In a statement following the May 27 signing of the trade pact, Rep. Charles Rangel (D-NY) - ranking Democrat on the House Ways and Means Committee, the ranking Democrat on the House Ways and Means Trade Subcommittee, Rep. Sander Levin (D-MI); and Trade Subcommittee member Rep. Xavier Becerra (D-CA) questioned the Administration's commitment to trade with Central America.
"With the CAFTA agreement to be signed tomorrow, the Bush Administration shows it is not serious about increasing trade with Central America. If it were serious, it would have reached out to Congress - to Democrats and Republicans - and put together a bipartisan agreement. Instead, the Bush Administration lost a major opportunity," the legislators' joint statement said.
The congressional Democrats urged the US trade representative to modify CAFTA provisions relating to labor standards and to access to low-cost generic medicines. They warned that the agreement, as currently constructed, is unlikely to be approved.
"Thanks to the Bush Administration, the CAFTA is on a midnight train to nowhere - in an election year or any year," the legislators said.
Despite opposition to the CAFTA among some Democrats as well as some Republicans from sugar- and textile-producing districts, Rep. Kevin Brady (R-TX), charged with spearheading congressional support for CAFTA, predicted that the agreement will be approved.
"When the Central America Free Trade Agreement comes before Congress, I am confident that it will have the votes to pass," Brady said in a press release.
For its part, the US' largest industrial trade association, the National Association of Manufactures (NAM), has said it would "work to secure congressional approval of the agreement at the earliest opportunity."
Frank Vargo, the NAM's vice president for international economic affairs, hailed CAFTA as "the highest-quality trade agreement yet."
In a May 28 press release, he said: "The outstanding rules in this cutting-edge agreement can serve as mileposts for future trade accords in the Americas, including the US-Andean Free Trade Agreement and the Free Trade Area of the Americas."
Zoellick has lauded the 2,400-page CAFTA as "a historic agreement that will eliminate tariffs and trade barriers and expand regional opportunities for the workers, manufacturers, consumers, farmers, ranchers and service providers of all the countries."
The USTR pointed out that whereas the Central American countries already enjoy duty free access to the US market for 75% of their exports, CAFTA - upon entry into force - will immediately eliminate tariffs on more than 80% of US exports.
CAFTA has been endorsed by every national business association and virtually every farm association in Central America, he added.
Negotiations on the CAFTA began in January 2003.
Following nine rounds of negotiations, agreement was reached with El Salvador, Guatemala, Honduras, and Nicaragua on December 17, 2003, and with Costa Rica on January 25, 2004. The draft text was made available to the general public on January 28, 2004, only three days after conclusion of the negotiations and three weeks before the President notified Congress on February 20, 2004, of his intent to enter into the CAFTA.
Negotiations to include the Dominican Republic in CAFTA began in January 2004 and concluded on March 15, 2004, but a period of Congressional consultation on that agreement required under the Trade Act has not yet concluded.
A date for signing an agreement that includes the Dominican Republic will be announced after those consultations are complete, Zoellick said.
CAFTA is a key export market for important US manufacturing sectors such as information technology products, agricultural and construction equipment, paper products, chemicals and medical and scientific equipment, all of which will enjoy immediate duty-free access.
US exports to the five CAFTA countries have grown over 70% since 1996 and now total $10.9 billion in 2003.
More than half of current US farm exports to Central America will become duty-free immediately, including high quality cuts of beef, cotton, wheat, soybeans, fruits and vegetables, processed food products, and wine, among others.
Each of the 50 US states, as well as the District of Columbia export to the CAFTA region with California, Florida, North Carolina, Texas, Louisiana, Georgia, Alabama, Massachusetts, South Carolina, and Pennsylvania leading the list.
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