A divided U.S. House of Representatives narrowly approved the Central American Free Trade Agreement on Thursday. The Republican-controlled House voted 217-215 in favor of CAFTA, after a final push by President Bush and top aides.
Only 15 of the House's 202 democrats backed CAFTA, and 27 republicans opposed it. The Senate approved CAFTA last month 54-45, and the bill now goes to the president for his signature.
The agreement eliminates tariffs on U.S. exports to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. It also locks in and expands the duty-free access those countries already have to the U.S. market.
"House passage of CAFTA-DR will create jobs and economic growth here at home and promote democracy, prosperity and hope in the Central American region,” says Rob Portman, U.S. Trade Representative. “This win sends a powerful signal to the region and the world that the United States will continue to lead in opening markets and leveling the playing field.”
The pact's approval came as international negotiators struggle to make progress toward a new world-trade agreement. A congressional defeat of CAFTA would have dealt a major blow to the talks by raising questions about Washington's ability to follow through on trade deals.
Labor unions and House Democrats lobbied hard against CAFTA because they said it would weaken labor provisions and mean job losses for U.S. workers. They also wanted stronger environmental terms.
The Bush administration countered the argument saying CAFTA labor provisions were the strongest of any trade pact yet. It has pledged to support $160 million in aid to CAFTA countries over the next four years for labor-enforcement and environmental programs.
“For pork producers, CAFTA-DR represents an opportunity to expand market access, eliminate current tariffs and reduce barriers to U.S. pork and other agricultural products in critical markets,” says Don Buhl, National Pork Producers Council president. “Iowa State economist Dermot Hayes has estimated that when this agreement is fully implemented, pork producer profits will increase by almost five percent annually.”
The American Farm Bureau Federation estimates the pact will boost U.S. farm exports to the region by $1.5 billion annually. The National Association of Manufacturers also expects gains. Many other business groups, ranging from media companies to high-tech firms, also backed the pact.
Associated Press, Reuters