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Cafta narrowly passes house Original Source Link: (May no longer be active)
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Posted on Thu, Jul. 28, 2005
Narrow approval for trade pact
CENTRAL AMERICA DEAL A WIN FOR BUSH, TECH
By Jim Puzzanghera
Mercury News Washington Bureau
WASHINGTON - The House of Representatives narrowly approved a controversial trade deal with Central America early today, handing Silicon Valley's high-tech industry and President Bush a major victory after weeks of intense lobbying and deal-making.
Despite that support and the relatively small size of the market, the Central American Free Trade Agreement, known as CAFTA, struggled to pass in the House, 217-215. The GOP leadership extended the normal 15-minute voting period to an hour as it lobbied for support. The pact passed in the Senate, 54-45, on June 30.
More than 90 percent of House Democrats voted against CAFTA, arguing that it will cost U.S. manufacturing jobs because it is not strong enough on labor and environmental rights in the Central American countries. The vote continued a drop in House Democratic support for controversial trade deals that could hurt the party with the high-tech industry.
The only member of the Bay Area congressional delegation to vote for CAFTA was the lone Republican, Rep. Richard Pombo of Stockton. Reps. Zoe Lofgren, D-San Jose, and Anna Eshoo, D-Palo Alto, undecided until Wednesday night and under pressure from tech executives in their districts, both voted against CAFTA.
CAFTA will immediately eliminate tariffs on 80 percent of U.S. exports to the region, with the remaining tariffs phased out in the next decade. Silicon Valley high-tech firms, which are heavily dependent on exports, strongly backed the deal because it will lower tariffs ranging from 5 to 30 percent on their products, saving U.S. exporters $75 million annually.
``Access to such markets around the world is critically important to the future success of Intel, the U.S. technology industry and our nation's economy as a whole,'' Intel Chairman Craig Barrett said in a written statement. ``More than 70 percent of Intel's revenue currently comes from outside the United States and sales in the Latin American region were our fastest growing during the second quarter of this year.''
Still, CAFTA covers a relatively small market. The six nations involved -- Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua -- have just 44 million people, and the $15 billion in annual U.S. exports to those countries makes it just the 14th-largest foreign market.
But with partisan tensions high in Congress and after the loss of manufacturing jobs to Mexico and China in recent years, CAFTA took on great symbolism.
Supporters say it will boost young democracies in Central America, give the United States momentum to create a larger trade deal that extends through South America and set the tone for a new round of World Trade Organization negotiations.
``The agreement is more than a trade bill; it is a commitment of freedom-loving nations to advance peace and prosperity throughout the Western Hemisphere,'' Bush said in a statement after the vote.
Opponents contend CAFTA will harm workers in the United States and Central America because they say it lacks tough labor and environmental standards. They also said it will make it more difficult to include stronger labor and environmental protections in future deals.
``It is a step backward for workers in Central America and a job-killer back home,'' said House Minority Leader Nancy Pelosi, D-San Francisco.
After months of lobbying by executives from Silicon Valley and other business sectors, Bush and Vice President Dick Cheney went to Capitol Hill on Wednesday morning to try to secure more Republican votes amid a flurry of last-minute deal-making. Many Republicans who represent districts with sugar farmers, textile workers or manufacturing plants are worried CAFTA will hurt those industries.
Hoping to avoid a loss on one of his top legislative priorities, Bush appealed to Republicans to support the deal during a private meeting.
He told them the deal would reduce duties on many U.S. products going to the six countries, creating a ``level playing field'' because the United States does not impose tariffs on most of their products, White House press secretary Scott McClellan said.
Bush also made a national security appeal to the GOP lawmakers, stressing ``the importance of supporting young and emerging democracies in our own hemisphere,'' McClellan said.
In the end, 27 Republicans bucked the president and voted no.
Rep. Ellen Tauscher, D-Walnut Creek, who opposed CAFTA, said the national security argument showed the Bush administration's ``desperation.'' The need for last-minute arm-twisting by Bush and Cheney showed the pact is flawed, she said.
Tauscher, chair of the 41-member New Democrat Coalition, has supported past trade deals. But she came out against CAFTA in early May, along with other leaders of the group. They said Bush did not reach out to pro-business Democrats during the negotiations to determine what would draw their support, and they criticized the administration for not using U.S. clout to force Central American governments to improve worker rights.
Republican House leaders have criticized Tauscher and other Democrats who describe themselves as pro-trade for not backing a deal that needed every vote, and have urged the high-tech industry to withhold their campaign contributions and endorsements from opponents.
Ralph Hellmann, the top lobbyist for the Information Technology Industry Council, said votes against CAFTA could hurt some Democrats when they look for support from the industry.
``It's incumbent upon the tech community to register our disappointment with those members in a variety of ways but continue the education process about why trade is important so we can have their support on bigger deals down the road,'' he said.
The CAFTA vote continued a dramatic slide in support from House Democrats for the most contentious trade legislation of the past 12 years. When the House passed the controversial North American Free Trade Agreement with Mexico and Canada in 1993, 102 Democrats voted for it, including three Silicon Valley lawmakers. Just 15 Democrats voted for CAFTA today.
``I think they are in danger of being viewed as anti-trade,'' said I.M. Destler, a public-policy professor at the University of Maryland and an expert on trade politics.
Republicans were making that charge as both sides headed toward the tight CAFTA vote. But Democrats strongly rejected the anti-trade label.
They noted that a majority of Democrats have supported recent, less controversial trade deals with countries such as Australia and Morocco. Most House Democrats oppose CAFTA, they said, not because it's a trade deal, but because it's a bad trade deal.
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Contact Jim Puzzanghera at jpuzzanghera@krwashington. com or (202) 383-6043.
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