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CAFTA: Boon or boondoggle? Depends on industry sector

Talk about rubbing salt in the wounds: President Bush's speech last Friday at a North Carolina textile mill, lobbying for passage of the Central American Free Trade Agreement (CAFTA), must have seemed the height of irony to the hundreds of thousands of U.S. textile workers who've seen their jobs vanish in the wake of previous trade pacts.

Critics of CAFTA — and there are many — say the legislation, recently passed in the Senate by a 54 to 45 vote, would further decimate an American textile industry that is a mere shadow of what it was five years ago.

CAFTA would end or sharply reduce trade barriers with Costa Rica, Guatemala, Honduras, El Salvador, and Nicaragua, as well as the Dominican Republic in the Caribbean, countries that purchased about $15 billion in U.S. products last year.

The White House says the agreement would level the playing field in trade between CAFTA countries and the United States, and would help “support emerging democracies” in Central America. The agreement, Mr. Bush says, “would be good for American workers, farmers, and small businesses.”

While the measure is generally expected to eventually be approved — perhaps the end of this month — it has had strong opposition, both in Congress and in the business community.

A coalition of state legislators from 21 states recently sent letters to Congress urging opposition, contending that CAFTA's investor protection provisions would give foreign investors operating within the U.S. property rights and legal remedies not afforded to American corporations.

“I fully support trade,” wrote Tennessee State Rep. Mike Kernell, Memphis, “but trade should not be valued above our hard-won and long cherished self-governing freedoms. I find this (agreement) to be an unacceptable threat to (states') sovereignty and democracy.”

The U.S. sugar industry has also weighed in against CAFTA, contending it would allow Central American countries to sell cheap sugar, often produced with child labor, in U.S. markets. That would be devastating to sugarcane growers in Louisiana, Florida, and Hawaii, said U.S. Rep. Charlie Melancon, D-La. His state produces about 22 percent of the sugar on the world market; it is Louisiana's largest row crop, with an estimated economic impact to the state of $2 billion annually, and employs some 27,000 people.

“There's no level playing field — the only people who benefit are the big, multinational corporations, and that's why Bush is behind it,” Melancon declared.

Representatives of the Louisiana rice industry and Louisiana trade and shipping interests say, however, that CAFTA would be of enormous benefit to the state's economy and to the rest of agriculture other than sugar.

The U.S. textile industry, already smarting from hundreds of plant closings and the massive migration of jobs to other countries with cheap labor and little or no government regulation, has been divided on CAFTA.

The National Council of Textile Organizations says 11 major textile and apparel trade associations have voted to support the agreement. The board of directors of the American Textile Manufacturers Institute voted to “vigorously oppose” it and “urge its defeat in Congress, calling it “a job-destroying agreement (that contains) side deals that give away U.S. jobs.”

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