Proposed CAFTA raising concerns

Published 12:00 am Wednesday, December 31, 2003

With the country still reeling from the effects of the North American Free Trade Agreement, trade representatives from the United States and five Central American countries entered into another historic free trade agreement Wednesday.

Proponents of the Central America Free Trade Agreement, modeled after the 10-year-old NAFTA, said the agreement will not only give additional outlets to American products, it will also &uot;eliminate tariffs, open markets and promote investment, economic growth and opportunity&uot; for the countries involved.

The $15 billion combined trade volume with the CAFTA countries, Honduras, El Salvador, Costa Rica and Guatemala, is much smaller than NAFTA countries which with Mexico alone is $232 million, and has been pushed by the Bush Administration for more than a year. The administration and several trade and interest groups said CAFTA’s passage is seen as vital to President George Bush’s desire to establish hemispheric free trade partnerships.

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&uot;They are all very small countries, but the administration is pushing the agreement as a way to build upon free trade in the western hemisphere,&uot; said Mike Lewis, a spokesman for Rep. Terry Everett.

Trade representatives from both the U.S. and CAFTA member countries feel the agreement aids in that endeavor.

&uot;In early 2002 President Bush put forward his vision for the region, a free trade agreement with Central America that expands economic freedom and opportunity for all our peoples, and which supports regional stability, democracy and economic development,&uot; said Robert B. Zoellick, U.S. Trade Representative.

Among the highlights of the agreement include:

n The elimination of duties on 80 percent of U.S. exports of consumer and industrial products to CAFTA countries within 10 years.

n Textiles and apparel will be duty-free and quota-free immediately if they meet the agreement’s rule of origin, promoting new opportunities for U.S. and Central American fiber, yarn, fabric and apparel manufacturing. The agreement’s benefits for textiles and apparel will be retroactive to Jan. 1, 2004.

n More than half of current U.S. farm exports to Central America will become duty-free immediately, including high quality cuts of beer, cotton, wheat, soybeans, key fruits and vegetables, processed food products and wine among others.

While advocates of the agreement applaud its goals, opponents insist it will only continue the trend of American manufacturers moving outside the U.S. to produce their goods resulting in even more job losses.

&uot;It’s going to allow for an unfair competitive edge and could result in layoffs and Alabamians losing jobs,&uot; said George Clark, president of Manufacture Alabama, a full-service trade association that represents manufacturers and partner industries throughout the state. &uot;There’s a problem with all trade agreements not effectively providing any substantial benefits from the huge job loss we’ve had.&uot;

Clark said that while the information the organization has received has been minimal, they are against the agreement because of the potential job losses associated with it.

&uot;We’re still looking into it, but we do have some information,&uot; he said. &uot;If I were asked for a position, I would say we are in opposition to it and I know several of our companies are actively working with congressional representatives in opposition of the agreement.&uot;

While limited information has been released on the agreement, several key congressional leaders have already spoken out against the agreement including presidential candidate Rep. Dick Gephardt, D-MO, and Sen. Richard Shelby, R-AL.

&uot;I am deeply disappointed to see that these sorts of free trade agreements continue to be negotiated,&uot; Shelby said. &uot;History has shown us the tremendous negative effect such agreements have had on our economy. I believe that this new agreement will only accelerate the outflux of quality American jobs to countries with a low-wage labor force.&uot;

A draft of the agreement will be released in January and it is expected to come before Congress for a vote in next spring.

&uot;I would say at this point it is still very early in the process and to my knowledge Congress has not seen the legislation,&uot; said Marshall McComber, a spokesman for Rep. Mike Rogers. &uot;Congressman Rogers feels that any agreement that is positive for the 3rd district which will help the economy and expand the job market he’ll support. If, however, this or any other agreement does not benefit the 3rd district the Congressman will not support it.&uot;

Clark agreed, and said more research needs to be done on the issue of free trade agreements.

&uot;One thing we need to do in Alabama and on the federal level is take a hard look at the all trade agreements and see the net effect they are having on many jobs,&uot; Clark said. &uot;I think people need to push back away from the table and take a second and third look at these agreements and look at the impact on the jobs lost here in Alabama. We’re doing all we can in Alabama to help manufacturing, not hurt it.&uot;