WASHINGTON — The Senate was set to vote on the Central American Free Trade Agreement Thursday night after a contentious debate on a cornerstone of the Bush administration's trade agenda.
If the proposed accord passes, it would go to the House, where it would face a tough fight from opponents who have argued that it will boost imports and do further damage to domestic apparel and textile manufacturers as well as sugar producers. The House Ways and Means Committee approved CAFTA by a 25 to 16 vote.
The pact is intended to eliminate trade barriers with Costa Rica, El Salvador, Guatemala, Nicaragua, Honduras and the Dominican Republic. Proponents, including retailers and importers, say the Central American region gives them an alternative to sourcing in Asia. Some U.S. companies are prepared to increase their investment in Central America if CAFTA gets congressional approval.
"CAFTA is a good bill; it's a fair bill, an even-handed bill that members on both sides of the aisle should be able to support in that this legislation expands the market for America's goods and thereby grows jobs here at home," Senate Majority Leader Bill Frist, (R., Tenn.) said on the Senate floor.
But a fellow Republican, Sen. Lindsey Graham of South Carolina, suggested the agreement would cost even more jobs in his state, where textile and apparel industry employment fell to 46,500 from 78,500 from May 1993 to May 2005.
"The trade agreement we've negotiated with Central America — CAFTA — has many loopholes that China will exploit, just like they've exploited every other trade agreement we've ever done, and the cumulative effect ... has just been devastating to the textile industry and other industries," he said.
Top administration officials, from President Bush to Commerce Secretary Carlos Gutierrez, have lobbied publicly for the pact. The administration failed in a last-minute attempt to strike a deal with senators representing sugar-producing states, who fear increased imports.
The sugar issue would loom in the House, where a bloc of Democrats also oppose the trade bill on grounds that it doesn't adequately protect workers from exploitation.
The textile and apparel industry is split on CAFTA. Fabric producers generally oppose the deal because it allows the use of materials from any of the signatory countries, while fiber producers support the pact because of the potential export opportunities.
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