US Senate passes Dominican Republic free trade deal

by Laura Bonilla

Saturday, July 2, 2005

WASHINGTON, USA (AFP): The US Senate has approved a controversial free trade pact with Central America and the Dominican Republic by a close 54-45 vote, with a battle likely at its next stage in the House of Representatives.

The Dominican Republic-Central American Free Trade Agreement (or CAFTA-DR) is likely to go before the House after the July 4 holiday recess.

The key test in the Senate came late Thursday after the House Ways and Means Committee voted largely along party lines to implement the trade pact with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua .

The pact would eventually eliminate most tariffs on the roughly 30 billion dollars (25 billion euros) in goods traded annually between the United States and the participating nations.

US President George W. Bush, expressing appreciation for bipartisan support over the bill, said the CAFTA-DR agreement was good for American workers, farmers and small businesses.

"When passed it will eliminate trade barriers immediately on 80 percent of US-made goods and the rest within a few years, which will help increase sales abroad and job creation at home.

"The agreement is also a strong boost for young democracies in our own hemisphere, whose success is important for America's national security and for reducing illegal immigration," Bush said.

Senate Majority Leader Bill Frist said the bill would "open the door to 44 million new consumers of American goods."

Under an existing scheme, 80 percent of Central American goods are exported tariff-free to the United States. The proposed agreement would level the playing field for US exporters.

How the package will fare on the House floor remains tough to gauge. Most Democrats and a handful of Republicans from districts with substantial sugar, textile and other manufacturing interests have signaled their opposition to the pact.

Maryland Democrat Ben Cardin said the measure would eliminate the use of trade sanctions in any disputes.

"This is not a good agreement for Central America and is not a good agreement for the US," he said.

Massachusetts Senator and former presidential candidate John Kerry said the accord was a step backwards: "Under CAFTA, workers don't even have the same standing to end child labor that corporations have to end copyright theft."

The New York Times Friday said that while the White House lobbied Congress to win support for CAFTA, the US Labor Department for more than a year has tried to block the release of reports that harshly criticized labor standards in Central America.

A series of reports by the International Labor Rights Fund commissioned by the Labor Department and released in April at the insistence of Democratic House of Representatives member Sander Levin, said labor conditions in Central America and the Dominican Republic were dismal, and that enforcement of labor laws was weak.

Levin told the daily the Labor Department held the reports in secrecy after they were submitted in early 2004.

The Bush administration has made a number of concessions to individual lawmakers to garner sufficient support for the pact.

The administration on Wednesday finalized a proposal designed to reassure sugar state lawmakers that the pact will not result in a huge influx of Central American sugar onto the US market.

The administration promised it would maintain a cap on sugar imports for the duration of the current domestic farm bill and would begin a study to examine the feasibility of converting sugar into ethanol.

Jim McDermott, a Democrat from Washington state, said: "My fear is that what you're going to do to get this agreement passed is make a million side deals."

Representative Mark Foley, a Florida Republican, voted yes, but emphasized that he was doing so only in hopes that the administration, which has outlined a plan to minimize the trade pact's impact on the sugar industry, will come up with a more comprehensive sugar proposal.

Under the fast-track trade negotiating authority that Congress granted the White House in 2002, trade agreements cannot be modified by the House or Senate. Lawmakers can only vote up or down on legislation that would implement trade agreements negotiated by the administration.

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