July 28, 2005

House Passes CAFTA in a 217-215 Vote

The CAFTA-DR free trade agreement passed the U.S. House of Representatives in a 217-215 cliffhanger vote early today.

Only 15 Democrats supported the trade pact; 27 Republicans opposed it.

The vote came a month after the pact passed the U.S. Senate in a 54-45 vote.

CAFTA-DR was in some ways a referendum on the North American Free Trade Agreement passed a decade ago and the start of debate over future agreements. A month ago, Iowa Democratic Sen. Tom Harkin summed up fears of those opposed in a statement that said:

“CAFTA will force American workers, farmers and businesses to compete with countries that have lower environmental and labor standards, enhancing the incentive for businesses to re-locate operations to that region, threatening U.S. jobs.”

The agreement was opposed by organized labor, the textile industry, U.S. sugar growers and the National Farmers Union. Most farm groups supported the agreement, saying it would give U.S. farmers tariff-free access to markets in countries that already had favorable trade terms and low tariff barriers in the United States.

The pact would eliminate most barriers to trade and investment between the United States, the Dominican Republic and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Passage of the bill came after intense pressure from President George Bush, who made a trip to Capitol Hill Wednesday morning. Vice President Dick Cheney stayed in the House late into the night to lobby wavering legislators, and Secretary of State Condoleezza Rice also went to Capitol Hill on Wednesday to urge passage, joining other Cabinet-level officials who had spent weeks talking to legislators.

The Bush visit marked the culmination of administration efforts. The pact was negotiated a year ago but was not sent to Congress for approval because of fears of its rejection.

Within minutes after the vote, the White House released a statement from President Bush. “By lowering trade barriers to American goods in Central American markets to a level now enjoyed by their goods in the U.S., this agreement will level the playing field and help American workers, farmers and small businesses.”

The immediate economic impact is likely to be small, at least for the United States, because the combined economies of the six countries are equivalent to about 1 percent of the United States.

But the political impact is likely to be much larger. For both supporters and opponents, the pact fueled debate over how best to respond to globalization, competition from low-wage countries and the loss of manufacturing jobs in the United States.

“As our manufacturing base erodes, as our industrial base erodes, we have a president who is contributing to the further erosion of that base,” said Rep. Nancy Pelosi of California, the House Democratic leader.




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