WASHINGTON — Momentum is a relative term in Washington, but it is one the White House has latched onto, as the debate over the Central American Free Trade Agreement intensifies.
More than a year has passed since the U.S. completed negotiations with Guatemala, Nicaragua, Costa Rica, El Salvador, Honduras and the Dominican Republic, but President Bush has not yet sent CAFTA to Congress, in large part because of strong opposition on the Hill, according to trade veterans.
The battle over CAFTA is expected to be one of the most definitive trade fights in Congress since the North American Free Trade Agreement was implemented in 1994, and the administration’s recent efforts to bolster support for the agreement reflect the tension between the White House and the Hill.
As the Bush administration kicked the pro-CAFTA campaign into high gear last week, opponents of the trade pact galvanized efforts to block the deal.
President Bush stepped into the spotlight last week as he hosted the presidents of the six CAFTA partners, who were on a lobbying blitz through the U.S.
“CAFTA brings benefits to all sides,” Bush said in a Rose Garden ceremony at the White House honoring the six presidents.
He said the deal would strengthen fledgling democracies in the region and, conversely, level the playing field for U.S. manufacturers, including textile producers.
“By passing CAFTA, we would open up a market of 44 million consumers who already import more of our goods and services than Australia or Brazil,” Bush said in a speech. “And we would create incentives for factories to stay in Central America and use American materials rather than relocate to Asia, where they are more likely to use Asian materials.”
The textile industry has been considered one of the remaining hurdles against CAFTA’s passage in the House, which is considered to wage the toughest battle. Other opponents include the sugar industry, faith-based groups and organized labor.
Blocs of House Republicans, including the Textile Caucus, which currently has about 80 members, have joined scores of Democrats who have said they will vote against CAFTA, in the face of a mounting trade deficit and widespread manufacturing job losses often linked to the impact of trade.
Leaders of the House New Democrat Coalition — moderate Democrats who often support free trade agreements — have even taken a tough stance against CAFTA, citing concerns for workers’ rights and calling on the administration to renegotiate what they feel is a flawed pact.
For the moment, the Bush administration has the textile vote in its crosshairs and is concentrating on lawmakers in Southeastern states, including the Carolinas and Georgia.
Political maneuvering is going strong, as the administration seeks to secure votes in the House. It recently dangled commitments to the National Council of Textile Organizations, a key textile lobbying association, in exchange for its support of the deal, and in so doing fractured textile industry lobbying, with the American Manufacturing Trade Action Coalition and National Textile Association remaining opposed to the accord.
The stakes are high for both sides of the divided textile industry, which has lost hundreds of thousands of jobs in the past decade.
The CAFTA region is the second-largest market for U.S. textiles and accounted for $4.2 billion in exports in 2004. The region represented 22.5 percent of all U.S. textile exports.
The administration’s pledges to the textile industry will play a key factor in which way many lawmakers ultimately vote. Rep. Howard Coble (R., N.C.), co-chair of the House Textile Caucus, has slated a panel discussion for May 24 to discuss the pros and cons of CAFTA for caucus members. The six-member panel will include representatives from the government, NCTO and American Apparel & Footwear Association — on the pro-CAFTA side — and executives from AMTAC, National Textile Association and UNITE HERE on the opposition.
At least one of the pledges to NCTO has raised concerns and could impact the potential support among lawmakers.
The administration is seeking a modification to the negotiated accord to require that pocketing and lining fabrics be supplied by the U.S. or the six signatory countries in order to be exported duty-free, but any amendments have to be approved by all of the countries involved in the trade deal.
In a wrinkle that could have a negative impact, some of the Latin American leaders said late last week they are not sold on whether to support the Bush administration’s proposed change. That doesn’t sit well with lawmakers seeking concrete commitments on which to base their votes.
Sen. Lindsey Graham (R., S.C.) said at a press conference last week it would be “irresponsible” to move forward with a vote on CAFTA until the six other signatory countries indicate whether they will support the change. House lawmakers are also concerned about whether the commitments are attainable or enforceable.
It is still difficult to gauge how House Textile Caucus members will weigh NCTO’s endorsement against the remaining industry opposition and whether one association’s support will be enough to swing key votes.
Ultimately, the votes could come down to whether a lawmaker’s key constituents support or oppose the pact.
Many House Republicans representing textile constituencies remain undecided, but a few are willing to go on the record opposing CAFTA.
At the time the deal with NCTO was announced on May 10, Coble’s chief of staff, Ed McDonald, said the congressman would vote ‘no’ on the agreement if a vote were held that day, but he stressed Coble is still gathering the facts. Many textile firms in Coble’s district support CAFTA, sources said.
“Congressman [Robin] Hayes (R., N.C.) is still concerned about the loopholes China can get around and the continued dumping of its cheap goods to the detriment of our domestic textile industry,” said Carolyn Hern, Coble’s communications director. “From what we understand, those loopholes have not been addressed in any deal that was made [with NCTO]. That is still a great concern for him.”
Hern noted that nothing is “cut and dried” at this point. He added, “Other countries have to do what is best for their country, and at this point I’m not sure they are looking out for the U.S. textile industry.”
Rep. John Spratt (D., S.C.), co-chair of the House Textile Caucus, said he is still opposed to CAFTA, despite the administration’s recent commitment on pocketings and linings.
“That is a small one, and it is not enough for me to turn [in favor of] the deal,” he said in a phone interview. “I wonder how that will be policed.”
Spratt assailed CAFTA’s textile and apparel rule of origin, which allows numerous exceptions for foreign fabric and yarn.
“The problem with those exceptions is they have not just weakened the rule of origin but they are devilishly difficult to police,” Spratt said, both on the U.S. side and in the region.
He also criticized the CAFTA countries’ “notorious lack of transparency in their Customs’ operations, and consequently that makes the already attenuated proposal thin as a reed.
“Those of us who have seen our textile industry diminish and fade away look upon this as one of the last stands,” Spratt said.
Rep. Sue Myrick (R., N.C.), on the other hand, said many textile employers in her district have said they privately support CAFTA, and she is leaning toward supporting it.