CAFTA's Upshot More Political Than Economic
Wednesday, July 27, 2005
The grand debates about open markets, workers' rights and U.S. interests in the Western Hemisphere don't matter much anymore. Within days, and possibly hours, the Central American Free Trade Agreement is likely to face an exceedingly tight vote in the House, and its fate hangs on issues of less than cosmic import -- such as pockets and linings.
To a handful of Southern Republicans with textile mills in their districts, it is no small matter what sort of fabric is used in the interior portions of garments that would enter the U.S. market duty-free under CAFTA. So the Bush administration essentially promised this week that the fabric in such pockets and linings will be from the United States -- and that pledge won the support for CAFTA of at least five Republican lawmakers in the past two days.
Cajoling, deal-cutting and browbeating were always in the cards for CAFTA because it is by far the most controversial trade agreement in years. While Congress easily approved recent pacts eliminating trade barriers between the United States and middle-income countries such as Australia and Singapore, the administration's proposal for a similar deal with six low-wage Latin American nations has drawn overwhelming rejection from House Democrats, mainly on the grounds that labor rights are inadequately protected in those countries. Several dozen Republicans, many of whom face hostility toward free trade in their districts, also are refusing to or are reluctant to cast pro-CAFTA votes.
Administration officials and House Republican leaders are scrambling to ensure that they are at least within striking distance of a one-vote majority when the roll call begins, on the assumption that a number of lawmakers from their party can be persuaded to vote yes if their support is essential. House members said yesterday that some of the incentives for votes are being hidden in huge energy and highway bills now in conference committees and that the full cost of those incentives will not be known until that legislation is later scrutinized.
Asked yesterday whether he had the CAFTA votes, House Speaker J. Dennis Hastert (R-Ill.) said: "Still working on it." But his office and that of House Majority Leader Tom DeLay (R-Tex.) said they plan to start debate on the treaty as soon as tonight, with a vote possibly tomorrow or Friday.
Although opponents hold out hope that they can defeat the treaty, they have increasingly acknowledged in recent days that the determination of the agreement's backers may be too much for them to overcome.
At an anti-CAFTA rally yesterday, Rep. Sherrod Brown (D-Ohio) cited a statement by Rep. Jim Kolbe (R-Ariz.) that the House leadership will "twist some Republican arms until they break in a thousand pieces." Brown also predicted: "This will be a vote in the middle of the night. They'll keep the vote open for several hours, in violation of the rules. If it passes, it will be by fewer than five votes."
Whether that scenario materializes or not, it highlights the stakes in the fight. CAFTA's economic ramifications are minor: The markets of the countries involved -- Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and the Dominican Republic -- are too small to register more than a blip in the $11 trillion U.S. economy. But the political implications are huge.
A defeat would deal a major setback to President Bush's second-term agenda, exposing him as vulnerable to Republican defections at a time when his political clout has increasingly been called into question. It would also deepen doubts about the ability of DeLay, who has been hobbled by ethics charges, to keep his troops in line.
Congressional rejection of CAFTA could also severely diminish the chances for negotiating much more significant trade deals, in particular the ongoing Doha round of negotiations for a global accord among the World Trade Organization's 148 member countries. Foreign governments would be less willing to offer concessions to Washington if U.S. lawmakers balk at approving a trade pact with six small nations. For that reason, many free-traders are sympathetic with the administration's efforts to corral the last few CAFTA votes.
"These things like the deal on pockets and linings -- it's incredibly petty," said Claude E. Barfield, a trade specialist at the American Enterprise Institute. "But at this point, to have CAFTA go down now would really be a blow psychologically. The world economy would not change, but it would hurt other trade initiatives."
The pro-CAFTA forces hit a snag yesterday when House Democrats blocked a bill that would strengthen monitoring of China's trade practices and allow U.S. companies to seek duties on goods found to be receiving subsidies from the Chinese government. The bill was brought up under special rules that require a two-thirds vote, in accord with a promise by House leaders to Rep. Phil English (R-Pa.) and a few industrial-state allies in exchange for CAFTA support.
House leaders vowed to bring the bill up again today under normal rules.
"I don't think that will slow up the process," said U.S. Trade Representative Rob Portman. But, he said, "it's pretty much member-by-member now. We're building momentum one vote at a time."