WASHINGTON — The push to put trade with the Caribbean Basin on an equal footing with Mexico under the North American Free Trade Agreement will be revving up again this year.
How this parity will eventually be granted remains to be seen, however. and there may be a lot of political wrangling before it becomes a reality.
Congressional backers of Caribbean parity say they will be moving ahead with legislation to make it happen, and businesses in Florida, where parity is seen as crucial to a flourishing Miami-based apparel trade, will be making their presence felt on Capitol Hill.
The relationship between Miami and the Caribbean Basin Initiative countries has been fostered by the 807 programs of the U.S., providing duty breaks on apparel using fabric cut in the U.S., assembled by cheap labor in the Caribbean and imported back into the U.S.
Nevertheless, the new free trade status of Mexico — under NAFTA, which went into effect Jan. 1 — is seen as putting this 807 process, and the investments in it by U.S.-based apparel companies, at a competitive disadvantage.
The issue is not new, and last fall, when the battle for NAFTA passage was being fought, it was proposed that Caribbean parity be part of the NAFTA-implementing legislation. The White House backed away from this, and sources say it might still be reluctant to make an immediate push directly for parity.
Congressional sources say the administration is still weighing a broader approach — an accession program in which Latin American countries could be admitted to NAFTA without negotiating separate agreements.
In December, President Clinton, meeting with the leaders of Central American and CBI nations, expressed sympathy with their concerns. He stopped short of endorsing Caribbean parity, but instead said he favored an economic development program for all Latin America. The President directed U.S. Trade Representative Mickey Kantor to study the issue and report back early this year.
A spokeswoman for Kantor said the CBI parity study was not completed, adding she had “no idea” when it would be.
Among the moves afoot in Congress is the plan by Rep. Sam Gibbons (D., Fla.), chairman of the House Trade Subcommittee.,to give CBI countries equal treatment with Mexico for three years until they can negotiate their own NAFTA agreement.
Gibbons said he wants to attach his CBI plan to the implementing legislation for the new GATT treaty for liberalization of world trade reached in December by the Uruguay Round talks. It’s expected this won’t be considered before early summer.
Gibbons said he expects the administration to soon announce its position on CBI parity.
“I never detected any opposition,” Gibbons told WWD.
In the Senate, Sen. Bob Graham (D., Fla.) is rewriting his bill in an effort to defuse some of the opposition it has encountered. Specifically, Graham plans to take out the provision that would give footwear parity benefits. Senate Majority Leader George Mitchell (D., Maine) has avidly fought any plans that could harm the domestic footwear manufacturers, which have a base in his home state.
Graham’s bill also would permit CBI nations to join NAFTA, only after making political concessions to the U.S., just as Mexico had to do.
“For example,” one source said, “we know there is still great concern about labor issues in the U.S. and so it is likely the CBI countries would have to act to allow unions in free trade zones, where a great deal of apparel and other products are made.
“In addition, these nations probably would have to open their markets to U.S. goods that now may largely be kept out, so it is uncertain whether the CBI countries will really want to go along with this.”
It’s also unclear as to how Congress itself will react to these bills. Some House staffers say Congress is unlikely to tackle the CBI parity issue so soon after the bruising battle over NAFTA and with GATT on the table.
Also, the crush of legislation already facing Congress, including health care reform, welfare reform and a crime bill, already is taxing the agenda, they say.
Congressional textile industry proponents, including House Textile Caucus Chairman John Spratt (D., S.C.) and Rep. L.F. Payne (D., Va.), a caucus member, are opposed to parity, for fear that the U.S. will lose more jobs to the Caribbean. Last year when the administration was considering whether to link a CBI parity provision to NAFTA, Spratt advised against it, saying it would cost more House votes for NAFTA than it would gain.
Meanwhile, a coalition of Florida businesses, led by Richard Salem, an attorney and a member of the state’s International Affairs Commission, plans to pursue CBI parity in defense of the trade that travels through Florida ports.
“Florida and the interests of America would be best served by taking care of the Caribbean Basin,” Salem said in a telephone interview from his Tampa office. Salem and Florida’s Gov. Lawton Chiles are planning a congressional lobbying campaign to begin next month.
Despite the political hemming and hawing, parity also has clear-cut support from the American Apparel Manufacturers Association.
Larry Martin, AAMA’s government relations director, said, “We have asked Kantor and other administration officials directly to support parity. We believe we have a lot of support for it on the Hill and in the administration.”
The AAMA lobbyist said that while it has supported the Gibbons bill, it would support any legislation that can achieve parity for the CBI nations.
“This is vital, since removal of U.S. import duties under NAFTA for Mexican apparel manufacturers put those in the CBI at a significant disadvantage,” Martin said.
Some observers believe, however, the apparel and textile industries may have to make a particularly strong pitch to Kantor to have him come out actively in favor of CBI parity, after the criticisms they heaped on him for his handling of their interests in the GATT Uruguay Round.
The solution, one trade source contended, “is to take this out of the realm of Kantor versus the textile lobby, to have Congress work with the administration on parity as part of a broader plan for the region.
“This way,” the source added, “you don’t face the problem of either Kantor or the textile lobby having to beg the other for action.”