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Congress to debate CAFTA-DR today

by Pete Hisey on 6/15/2005 for Meatingplace.com

A reciprocal trade agreement with five Central American countries and the Dominican Republic, Central American Free Trade Agreement-Dominican Republic, is scheduled for debate today after being stalled for over a month when unexpectedly virulent opposition arose earlier this year. Labor unions, the sugar industry, the textiles industry and a few other players launched a surprisingly effective assault on the treaty, which proponents had expected to pass by early May.

The National Pork Producers Council is one of CAFTA's most vocal proponents, since most pork products face a high tariff in most CAFTA countries. Under the agreement, tariffs would slowly disappear over a 15-year period, and those countries would comprise a promising new market. The beef industry foresees a market in premium high-end products for the growing resort and tourist industries in the region.

Opponents, like Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, see a threat in that there are no triggers in the deal that would reimpose tariffs if exports to the United States rise too quickly. Bill Bullard, chief executive, worries that these countries would be in a position to in effect "launder" inexpensive cattle from Brazil and Argentina by developing a slaughter industry, then transshipping the resultant beef to the U.S.

Both sides, though, admit CAFTA-DR is relatively unimportant. Both sides are looking past CAFTA to the wide-sweeping Free Trade Area of the Americas agreement that has been under discussion for several years. That would involve several surging economies, most notably Brazil, and CAFTA would most likely be looked upon as a precedent.
Bush has said one of the main reasons for Cafta and the other trade agreements is to "Promote Democracy". :???:
CAFTA: A lot like NAFTA, but with sugar


Backers of the Central American Free Trade Agreement have their work cut out for them.

While the free trade pact did make its way through the Senate Finance Committee on Tuesday - narrowly, by an 11-8 margin - it faces much opposition when it faces the whole chamber. And with good reason; its predecessor.

The North American Free Trade Agreement, launched in January 1994, has more than doubled total trade between its signatories, the United States, Canada and Mexico. And that can be a good thing. But NAFTA also is widely considered responsible for considerable job loss in the United States. Once trade barriers were knocked down between nations, particularly the U.S. and Mexico, production was free to move south of the border, where workers would do the same labor for lesser wages and benefits.

Critics note NAFTA has been very good for some folks - investors, in particular, whose stock values benefit when companies find a cheaper source of labor. But NAFTA hasn't been kind to the American worker, and North Carolina, where the textile business has been driven under by foreign competition, is strongly perceived as among the sufferers. John Edwards used NAFTA as a campaign issue against his northeastern counterparts in the Democratic race for president, as John Kerry and others were supporters of NAFTA's passage.

The Economic Policy Institute has blamed NAFTA for the loss of 766,000 U.S. "job opportunities" in the pact's first seven years of existence, mostly for non-college-educated workers.

NAFTA also was supposed to be a boon for American farmers, but the EPI - which is critical of the CAFTA proposal, as well - claims that hasn't been the case. EPI economist Robert E. Scott notes that the U.S. food-trade deficit with Canada has grown by $4.3 billion since 1993, and this nation's food-trade balance with Mexico essentially is unchanged. Scott states that net farm income in the U.S. has declined from $5 2.7 billion to $47 billion, and Scott blames NAFTA for the loss of 16,000 jobs in U.S. food production alone.

The farmers who fear this new trade agreement are those in the sugar industry, who stand to face competition from Central America.

There is debate about whether NAFTA can really be blamed for so many American job losses. It is true that more U.S. jobs have been lost to Asian nations than to Mexico.

But in most of these trade agreements, American consumers seem to benefit - through lower-cost products made by lower-wage workers - while American labor waits for the other shoe, in the form of a pink slip, to drop.

The Bush administration signed CAFTA a year ago, but the legislation faces a tough battle to achieve passage. And, fair criticism or not, the average American is less convinced than ever that NAFTA was a good idea.

For critics this bill has too many similarities, all the way down to the name.
6/15/2005 6:10:00 PM

R-CALF Cattle Alert: CAFTA-DR Off to a Rough Start

(Billings, Mont.) – R-CALF USA continues – and will continue – to relay the message in Washington, D.C., and throughout cattle country, that the U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) sets a negative precedent for independent U.S. cattle producers, and that the proposed pact actually is trade-destructive.

The United States Senate Finance Committee on Tuesday met to review the trade agreement and make informal recommendations on the proposed legislation to implement CAFTA-DR. The Committee took part in what is called a "mock" markup, which means the votes are not binding.

"While Tuesday's action carries no official weight, a mock markup simply tests the waters, so to speak, to help those in the political process get a rough idea of whether a certain piece of proposed legislation will succeed or not," explained Jess Peterson, R-CALF USA's director of government relations. "The process merely sends a signal to the Administration about the Committee's stance on CAFTA-DR and the items the committee would like to see addressed."

The agreement was reported up to the Administration by a narrow vote of 11-9.

"R-CALF was disappointed in this vote, and the fact that the CAFTA-DR is inching forward," said Dennis McDonald, co-chair of R-CALF USA's Trade Committee. "However, we were energized by statements from several senators who oppose its passage."

Sen. Kent Conrad, D-N.D., spoke out regarding the continued trade deficits and the fact that the CAFTA-DR seriously jeopardizes agriculture in North Dakota and across the country.

"We need to carefully review the trade strategy of our nation, because if anything is clear, it is that this strategy is not working," said Conrad. "When I look at CAFTA, I see an agreement that adds to our trade deficit with the region. I see a trade deal that only hurts North Dakota and our nation."

Sen. Olympia Snowe, R-Maine, expressed her concern with the job loss that the North American Free Trade Agreement (NAFTA) had created for her state, and voted against CAFTA-DR.

Earlier this week, while addressing a crowd of Colorado ranchers, R-CALF USA President and Co-Founder Leo McDonnell noted the figures provided by CAFTA-DR supporters, who claim that U.S. beef exports to the CAFTA-DR countries will increase $40 million in 10 to 15 years. McDonnell then held up a dime and pointed out that for the individual cattle producer, the dime represented less than a 10-cent increase in value per head.

"In exchange for this increase of almost 10-cents, we give up the safeguards on cattle and beef, lose special provisions that address surging imports, provide South American countries with the access to ship live cattle into Central American countries that will be slaughtered and shipped to the United States as a product of the CAFTA countries," he warned. "Worst of all, we give these countries complete market access, and the slim export opportunity the U.S. has in Costa Rica and Nicaragua is limited by a safeguard on our beef.

"What responsible cattle association would support an agreement such as this?" McDonnell asked.

# # #

Voting Record for U.S. Senate Finance Committee's "mock" markup on CAFTA-DR on June 14, 2005:

Jeff Bingaman, D-N.M. No

Max Baucus, D-Mont. No

Jim Bunning, R-Ky. Yes

Kent Conrad, D-N.D. No

Mike Crapo, R-Idaho No

Bill Frist, R-Tenn. Yes

Charles Grassley, R-Iowa Yes
Orrin G. Hatch, R-Utah Yes

James M. Jeffords, I-Vt. No

John F. Kerry, D- Mass. No

Jon Kyl, R-Ariz. Yes

Blanche L. Lincoln, D-Ark. Yes
Trent Lott, R-Miss. Yes

John D. Rockefeller IV, D-W.Va. No

Rick Santorum, R- Pa. Yes

Charles E. Schumer, N.Y. No

Gordon Smith, R- Ore. Yes

Olympia J. Snowe, R-Maine No
Craig Thomas, R- Wyo. Yes
Ron Wyden, D-Ore. Yes

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