The Central America Free Trade Agreement passed a hurdle today, as the Senate Finance Committee approved the trade proposal. Of course, it still needs the full-Senate's approval.

Countries that would be involved with CAFTA include Dominican Republic, Nicaragua, El Salvador, Honduras, Costa Rica and Guatemala.

It's expected that a full-Senate vote will come yet this week or quickly after Congress returns from the July 4th recess. The National Pork Producers Council, and the pork industry in general, supports CAFTA. The U.S. sugar industry and some labor groups oppose the proposal.

The Bush Administration strongly backs CAFTA as a way to expand trade markets for more U.S. products.

There remains conflicting concerns over Central American countries' labor laws and inequality there. The Bush Administration has assured that it would spend $40 million over the next 10 years to promote labor laws in the region. The Administration also said it would commit funds to help Central American subsistence farmers adjust to an expected influx of U.S. agricultural products.

Passage is still dubious in the U.S. House. The House Ways and Means Committee plans to consider CAFTA on Thursday.

Under the 2002 passage of fast-track trade negotiating authority trade agreements can't be modified by the House or Senate. Lawmakers can only vote up or down on legislation to implement trade agreements negotiated by the Administration.

The White House submitted CAFTA legislation to Congress last week. Under fast-track, Congress has 90 working days to approve or reject the legislation.

Source: Reuters, MarketWatch.