The Central America Free Trade Agreement appears to be in for a rough ride when the Bush administration submits the trade pact to Congress sometime later this year.
One of the latest to express misgivings about the agreement with five Central American countries and the Dominican Republic is Georgia Sen. Saxby Chambliss, chairman of the Senate Committee on Agriculture, Nutrition and Forestry.
“I am very concerned about the Central America Free Trade Agreement,” Chambliss said in a statement. “While I generally support free trade agreements and fully recognize the importance of exports to the agriculture industry, it is important that all producers share in the benefits of trade liberalization.”
Chambliss joins a growing number of senators and House members in both parties who are finding reason to disagree with the administration's rosy picture of CAFTA's benefits. The unexpected criticism has led administration officials to begin firing back at opponents in a series of speeches and press conferences.
“With 96 percent of the world's consumers living outside the United States, it's clear that continued trade opportunities for our farmers isn't a luxury, it's a necessity,” said Agriculture Secretary Mike Johanns at a March 28 news conference.
Johanns, who appeared with acting U.S. Trade Representative Allen Johnson at the briefing, said CAFTA would help level the “playing field” between the United States and Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua and the Dominican Republic.
“CAFTA nations already have access to the U.S. market,” Johanns said. “In fact, 99 percent of their products can now enter the United States duty-free under other agreements. But our farmers and ranchers don't have the same access to CAFTA markets.”
But opponents note that it will be 10 to 15 to 20 years before U.S. exporters have the same access to Central American markets under CAFTA and that, in many cases, those markets will not be significant.
“CAFTA proponents overestimate the agreement's potential benefits, often ignoring the fact that nations included in CAFTA represent small populations with low purchasing power,” said National Farmers Union President Dave Frederickson, speaking at a press briefing attended by three members of Congress.
“The CAFTA, and the U.S. trade agenda as a whole, seems more inclined to negotiate with countries that want increased access to U.S. markets rather than countries interested in buying more U.S. agricultural products.”
Commodity organizations also are divided over CAFTA. The American Soybean Association, National Corn Growers Association, National Association of Wheat Growers and the USA Rice Federation support it; the National Cotton Council opposes it in its current form.
Cotton Council leaders say they are concerned that CAFTA grants preferential treatment to textile components produced in third countries, such as China, outside of Central America and the Dominican Republic.
“A good CAFTA is essential to preserving a viable U.S. cotton and textile industry and is expected to increase the use of U.S. cotton and its products, but exceptions to the rules-of-origin contained in the agreement continue to raise concerns that the agreement is not as beneficial as it could be,” said the Cotton Council's Woody Anderson.
Anderson, chairman of the NCC executive committee, has asked the Bush administration to work with cotton and textile industry organizations “to find ways to reduce detrimental impacts on the United States and its CAFTA partners” in the current agreement.
Those comments were echoed by the American Manufacturing Trade Action Coalition, which also opposes CAFTA. “This deal is riddled with loopholes that will destroy tens of thousands of U.S. textile and apparel manufacturing jobs,” said AMTAC's Auggie Tantillo. “To make matters worse, most of the loopholes in the deal will benefit China.”
While Chambliss didn't give any specifics on his objections to CAFTA, he did say he was concerned about the long-term effect of such agreements on U.S. farm policy.
“I am still examining the impacts of the CAFTA, and I am particularly sensitive regarding the long-term impacts of the agreement that may alter certain U.S. farm programs,” he said. “While many commodities in Georgia benefit from this agreement, including cotton, free trade agreements should remain faithful to current U.S. policy and not restrict options available to Congress in future farm bills.”
His comments came after administration officials and ambassadors from Guatemala, Costa Rica and the Dominican Republic visited Atlanta to try to win more support for the agreement.
Chambliss said he planned to consult with his colleagues and discuss his concerns with the U.S. trade representative. “I would like to support the CAFTA, but as it currently stands I will vote against the agreement when it comes to the Senate floor.”
Administration officials attempted to downplay Chambliss' opposition.
“When a member says I'll vote against it if it comes up today, it means, ‘Come up here and explain what it means for me,’” said Chris Padilla, an assistant U.S. trade representative.
But Chambliss and House members such as Reps. Collin Peterson, D-Minn., ranking member of the House Agriculture Committee, Dennis Rehberg, R-Mont., and Earl Pomeroy, D-N.D., are beginning to raise questions about who truly benefits from such trade agreements.
“CAFTA, like the failed trade policies of the past, is being sold on wildly optimistic projections that sound good but never seem to materialize,” said the National Farmers Union's Frederickson, who was flanked by the three House members at the press briefing. “The fact is that the United States continues to come up on the short-end in trade agreements.
“There is no better example that our trade policy isn't working than the fact that for the first time in nearly a half-century the United States will import more agriculture products than we export.”
Recent public opinion polls seem to bear out claims that voters are becoming disenchanted with trade agreements like the North American Free Trade Agreement, which reduced trade barriers between the United States, Canada and Mexico in the mid-1990s.
A poll conducted for the National Journal said that 51 percent of respondents believed that NAFTA has been bad for the U.S. economy because cheap imports have hurt wages and cost jobs.