WASHINGTON — The Bush administration appears to be coming up short on votes for the Central American Free Trade Agreement, as the final showdown in the House looms.
With Republicans from states hit hard by international trade joining large blocs of Democrats who oppose the accord's labor provisions, the White House is still looking to swing more votes and the political maneuvering should be intense in the run-up to the House vote this month, possibly as early as next week.
How the textile states vote will be key to the CAFTA battle and members of the House Textile Caucus, comprising some 80 lawmakers, represent a significant voting bloc.
In a survey conducted by WWD, 14 House members from the four largest textile delegations — North Carolina, South Carolina, Georgia and Alabama — said they plan to vote "no" for CAFTA, while eight said they were "leaning no," another seven said they were undecided, two said they plan to vote "yes" and one was leaning "yes." (See voting list, this page.)
As Congress returns this week from a weeklong July 4 recess, one of the fiercest trade battles in a decade looms in the House over CAFTA, which proposes to lower and eliminate tariffs on goods and services flowing between the U.S. and Guatemala, El Salvador, Honduras, Costa Rica, Nicaragua and the Dominican Republic.
Opposition in the House is deep and wide and it has created a major political headache for the Bush administration, which is trying to find enough votes for the embattled trade accord. Republicans control the House with 231 votes, while Democrats represent 202 votes. There is also one independent and one vacancy.
The Bush administration would need a simple majority of lawmakers who are voting on the floor for passage in the House, but a large contingent of GOP members from textile- and sugar-producing states is opposed to the pact, which has made it difficult for the White House to secure the 218 votes it needs for approval. The administration is hopeful that a compromise from the CAFTA countries on a key pocketing provision could sway some votes.
The President was handed a victory in the Senate, which voted 54-45 to approve the treaty on June 30.Rep. Bill Thomas (R., Calif.), chairman of the House Ways & Means Committee, recently said Congress might need to play the China card to get enough votes to pass CAFTA in the House. Thomas said he is preparing legislation to address trade issues associated with China and would like the House to act on the measure before it considers CAFTA.
House members will be watching for China legislation this week and evaluating whether it has enough teeth in it.
The Bush administration has already tried to placate textile-state Republicans with promises to tweak the CAFTA accord, which won the support of Sen. Elizabeth Dole (R., N.C.) and the National Council of Textile Organizations, and splintered the textile industry. Many House members are reluctant to show their hands on a controversial trade vote until the final floor debate, which explains why many are still undecided or "leaning" one way or the other.
The administration is still pinning its hopes on three promises it made to the textile industry to ultimately swing enough votes, but to date only two House textile-state members have stated publicly they will vote for CAFTA.
The linchpin in the administration's fluid Southern strategy appears to be getting firm commitments from the six CAFTA countries to support a proposed amendment by U.S. Trade Representative Rob Portman to change a provision in the treaty for pocketing fabric to require it be made by one of the signatory countries — as opposed to any country in the world, which is the way it stands now in the accord.
That change alone, which requires approval from all six CAFTA countries, could help protect the $100 million in existing U.S. pocketing exports to the region and could give assurances to wary textile-state lawmakers.
House members are continuing to meet with U.S. trade officials and GOP leadership to get firm commitments from the CAFTA leaders showing they support the change. Opponents claim the U.S. will have no leverage after the House votes on CAFTA. In addition, Congress would have to approve any changes to the textile rule of origin, which further complicates matters.
The other two administration pledges are a commitment from Nicaragua, which received 100 million square meters equivalent in allowances to use foreign fabrics and yarn outside of the U.S. and the region, to preserve the $100 million in existing U.S. business, and outlining a process for the implementation of "cumulation" for Mexico and Canada to take part in the agreement. Under CAFTA's cumulation provision, a limited amount of woven apparel, denim apparel and wool apparel made in the CAFTA countries from Mexican and Canadian fabric could qualify for duty-free treatment in the U.S.Rep. Sue Myrick (R., N.C.) — one of the two textile-state lawmakers publicly supporting CAFTA — said the administration can find more votes in the coming days if it is able to demonstrate it has firm commitments from the CAFTA governments.
"I know the trade rep is working on side issues of pocketing and [foreign fabric allowances given to Nicaragua] and if some of that comes to be I think [the administration] will pick up several votes," she said.
Myrick said the majority of textile companies in her district, including Parkdale Mills, American & Efird and Stowe Mills, support CAFTA and want to build on export opportunities.
It appears the administration has inched a step closer to getting some support from the CAFTA countries, according to a letter obtained by WWD. Six ambassadors from the countries sent a draft letter to Portman on June 30, claiming their governments are prepared to engage in consultations after CAFTA "enters into force."
"Moreover, our governments will accept your proposed modification in those consultations," the six ambassadors wrote.
Becky Ruby, communications director for Rep. Phil Gingrey (R., Ga.), said the congressman is undecided, but would vote for CAFTA if "the issues get resolved to his satisfaction," adding a signed letter from six trade ministers before the vote would be favorable.
"Along with these letters, [Rep.] Gingrey is working to get assurances from House and Senate leadership that they will bring up [the pocketing amendment in Congress] in a timely matter to make sure it doesn't get lost in the fray," Ruby said.
As textile-state lawmakers watch the pocketing issue unfold in the run-up to the vote, they are also weighing several other factors in the days before the showdown.
Republican members are under intense pressure from the administration to vote with the President on this key trade accord, but some GOP loyalists from the South are in a bind because of pledges they made to the American Manufacturing Trade Action Coalition, National Textile Association and American Textile Manufacturers Institute during the midterm elections in 2004, saying they would vote against CAFTA.
A total of 14 lawmakers from North and South Carolina and Georgia who were reelected pledged they would vote against CAFTA. The associations did not poll members from Alabama.It is unclear whether members will stand behind their campaign pledges. Sen. Richard Burr (R., N.C.) pledged to vote against CAFTA, but ended up voting for it on the floor of the Senate and Myrick has also backed out of the pledge.
Amy Auth, communications director for Rep. Virginia Foxx, (R., N.C.), who has Sara Lee plants, Unifi and Parkdale Mills in her district, said the congresswoman is planning to vote against CAFTA, even though some of the largest textile and apparel players in her district support CAFTA, and in part because she signed the associations' pledge and is "concerned about any unfettered free trade agreements that send jobs overseas."
Battle scars from past trade fights also weigh heavily on a lawmaker's mind, and the polarization in the textile industry, which has suffered massive job losses over the past decade, makes the vote that much more difficult for some.
In the past 10 years, since the North American Free Trade Agreement took effect, the textile and apparel industry has lost 889,100 jobs, or 57.8 percent of its total workforce, since the end of 1994.
There is no question imports have played a major role in the displacement of U.S. textile workers, and lawmakers who voted for NAFTA and subsequent trade-related legislation are leery of promises for votes.
Charles Norwood (R., Ga.), who plans to vote against CAFTA, said past administrations have broken several promises to the textile industry, although he stressed he trusts Portman's intentions.
"If they can do all of these great things then they need to put them in the agreement now and fix it now," said Norwood. "Don't promise to fix them after the vote. Most times, promises for one reason or another can't seem to be fulfilled."
Norwood, who has Avondale Mills in his district, said the trade accord would hurt the firm's business and "that's enough right there."
Brian Robinson, deputy chief of staff for Rep. Lynn Westmoreland (R., Ga.), who is leaning toward supporting CAFTA, said: "We still have some textile industry in our district and there has been some loud concern from those sectors about the agreement."However, Westmoreland has close ties to Sen. Saxby Chambliss (R., Ga.), who was initially opposed to CAFTA because of concerns about sugar imports, but later voted to support the agreement.
"At the end of the day, the senator was on board with it and that is something we have to consider," Robinson said.
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