Senate Debates Central America Free Trade Agreement

KWAME HOLMAN:

Ever since leaders of the U.S, five Central American nations and the Dominican Republic settled on a new free trade agreement just over a year ago, the Bush administration and business interests have lobbied members of Congress fiercely to ratify the deal.

And they watched closely as the Senate debated the agreement today. Many Republicans, echoing the arguments of the administration, stressed that the agreement would promote both economic development and political stability in Central America. Arizona Republican John McCain:

SEN. JOHN McCAIN:

If there is anything that we need today, it is strong viable economies in Central America so that they can progress, so they can be strong, and they can again be the allies of the United States of America.

KWAME HOLMAN:

The countries in the trade agreement are Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. Supporters say it will break down trade barriers and most duties now levied on U.S. farm and manufactured goods in the six countries; tear down obstacles to U.S. investors; and strengthen intellectual property rights.

While the amount of trade affected by the agreement comprises only a small percentage of all U.S. trade, Colorado Republican Wayne Allard said CAFTA still would increase significantly U.S. exports to the region.

SEN. WAYNE ALLARD:

This agreement will create the second largest U.S. export market in Latin America, $16 billion, behind only Mexico and the 14th largest U.S. export market in the world.

KWAME HOLMAN:

But many Democrats argued CAFTA was just further evidence of the Bush administration's troubled trade policy. North Dakota's Kent Conrad:

SEN. KENT CONRAD:

I have come to the conclusion that our trade policy is not working. It's not a free trade policy; it's not a fair trade policy. Increasingly, it is a failed trade policy.

KWAME HOLMAN:

Those criticizing the agreement also point out that the CAFTA countries would not be required to make substantial improvements to their records on workers' rights and environmental protections.

And, they say, like previous trade deals CAFTA will add to America's soaring trade deficit and the loss of manufacturing jobs. Massachusetts Democrat Edward Kennedy said it was those American jobs that the Senate should have been discussing today.

SEN. EDWARD KENNEDY:

Our work force, in a country that has the greatest economy, certainly the greatest national security, and the greatest military, we want to keep it that way. The way you keep it is having a strong manufacturing base. And the way that you do that is you invest, invest, invest.

You invest in those workers to make sure that they have good training and upgrade their training. You invest in innovative and creative ways to expand our ability to manufacture and expand. You think we're debating those issues? No. We're trying to pass legislation that is going to put a greater risk to those workers that do have jobs, that's what this does.

KWAME HOLMAN:

But fellow Democrat Ron Wyden said voting down CAFTA would only help China gain economic dominance in the Central American region, and cause even greater U.S. job losses.

SEN. RON WYDEN:

You reject the agreement, you send a message to China, you ought to head for Central America as fast as you can because you have not got an opportunity to get a toe hold in America's backyard, you're cutting off the opportunity for a lot of American exporters, people who make those value added products, the high skill, high wage products and technologies, to sell those goods in Central America.

KWAME HOLMAN:

However, South Carolina Republican Lindsey Graham said Chinese competition already has devastated his state's textile industry, and argued the same will happen throughout the Americas if CAFTA is approved.

SEN. LINDSEY GRAHAM:

What's going to happen very clearly to me is that Chinese companies are going to move into the CAFTA region, they're going to take material produced in China, made in China, with slave wage conditions, horrible conditions, throw a label on it as if it was made in CAFTA and get it into our country in a way they couldn't do directly from China.

KWAME HOLMAN:

Senators from both parties agreed on how CAFTA would affect U.S. sugar producers, an issue that temporarily threatened to hold up the pact. Louisiana Republican David Vitter spoke for many of them when he said increased sugar imports from the CAFTA countries would overwhelm the U.S-based industry.

SEN. DAVID VITTER:

This agreement will allow an additional 122,000 tons of imported sugar into the U.S. in its first year alone, with annual increases following. These steady increases in imports threaten to flood the U.S. market and truly devastate the Louisiana sugar cane industry as domestic sugar is displaced by highly subsidized foreign imports.

KWAME HOLMAN:

Last minute concessions by the administration to U.S. sugar makers may not have convinced Vitter to vote yes, but a few of his sugar state colleagues did go along. Even if the Senate approves CAFTA later this evening, the pact is likely to face tougher resistance in the House, where members of both parties also had threatened to vote against it. They too cite concerns over the pact's labor rights provisions and its potential harm to domestic sugar producers.