WASHINGTON — The Bush administration’s planned signing today of the Central American Free Trade Agreement sets the stage for a Capitol Hill battle over the accord.
However, it is unclear whether President Bush will send CAFTA to Congress this year, and if he does, whether lawmakers will debate it before the November election.
U.S. Trade Representative Robert Zoellick is to sign the trade deal in the Hall of the Americas at the Organization of American States with the trade ministers from El Salvador, Costa Rica, Nicaragua, Guatemala and Honduras. The region already accounts for 15.5 percent of the imported apparel market in the U.S. and these countries are eager to boost that market share.
The signing sets in motion a 60-day timetable for Bush to send the bill to Congress, which would have 90 legislative days to consider the measure. The U.S. forged a separate trade agreement with the Dominican Republic, which it plans to sign as early as the end of June. That pact is to be integrated into CAFTA and sent to Congress as one trade package.
CAFTA faces several hurdles, including a truncated Congressional calendar because of the presidential nominating conventions and elections, opposition among Democrats and some Republicans in an emotionally charged political atmosphere related to job losses and outsourcing, and opposition from lobbies such as textiles and sugar.
In addition, the five Central American governments have to approve the trade pact and they are also facing opposition at home from farmers who say the U.S. unfairly subsidizes agriculture.
Timing is key to retail and wholesale importers are booking next year’s apparel orders in the region now.
“Lots of decisions have been made or will be made shortly in regards to sourcing in 2005,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association. “If CAFTA isn’t passed this year, companies may think Central America is not worth the risk and will place their sourcing in Asia.”
Robert DuPree, vice president of the National Council of Textile Organizations, an industry lobbying group, said: “This will be an incredibly tough vote for a lot of members of Congress because it could be the last vote cast in September before the elections and it is a vote portrayed as giving away hundreds of thousands of jobs.”
Zoellick and his five counterparts have argued the deal will cut trade barriers among the countries, bolster economies in Central America and lead to lower prices for consumers.
Lawmakers and labor and human rights organizations voiced their opposition Thursday.
The need for trade agreements to set labor standards for trading partners has been a concern for the bulk of Democratic lawmakers and a growing number of Republicans. The issue has picked up steam as U.S. manufacturing jobs have fallen by some 2.6 million since 2001, and lawmakers question the role weaker labor standards in foreign countries have played in the downturn.
Michigan Rep. Sander Levin, the top Democrat on the House trade subcommittee, said Thursday that CAFTA would fail in the House largely because of the pact’s “enforce-your-own-laws” labor standards, which carry no sanctions for violations.
Presumptive Democratic presidential candidate John Kerry has called for CAFTA to include enforceable labor standards and would renegotiate the pact accordingly.
— With contributions from Joanna Ramey