CAFTA halfway through Congress
— Senate passes trade pact.
— House debate, vote around corner.
The highly controversial Central America Free Trade Agreement (CAFTA) passed the full Senate July 1, and is now awaiting action from the House of Representatives later this month.
The Senate vote was 54-45 in favor of opening free trade with six Central America countries—Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.
Proponents of CAFTA called the Senate action very positive, however, opponents of the proposal said that the vote shows that there are some concerns with the agreement.
R-CALF United Stockgrowers of America, and several other producer organizations who oppose CAFTA said that the Senate’s vote was the least supportive of any trade agreement voted on by that division of Congress.
“We are grateful for the strong opposition to CAFTA,” said Jess Peterson, director of government relations for R-CALF. “In particular, we thank each Senator that stood up for the U.S. agricultural producer and against the poor precedent that CAFTA set for future FTAs (free trade agreements). U.S. ranchers deserve an agreement that ensures international trade, enhances their business operations and isn’t destructive or detrimental.”
Opponents of CAFTA claim the agreement fails to create a level playing field for U.S. cattle producers, by allowing Costa Rica and Nicaragua to add special and specific safeguards to block beef import surges from the U.S. Costa Rica and Nicaragua are considered the two largest Central American markets for U.S. beef.
“CAFTA fails to address global beef distortions in trade that left unaddressed, only guarantee that U.S. cattle producers will not be allowed to be competitive,” said Peterson. “The U.S. received no special safeguards for beef import surges from CAFTA nations as mandated by Congress, nor does CAFTA follow the guidelines for mandatory country-of-origin labeling (mCOOL) as passed by Congress. The Australian FTA did include these special safeguards for U.S. beef.”
Proponents of the agreement said U.S. beef will not get more competition from Central America product and that opponents of the trade pact are just showing their “protectionist tendencies.”
Aides to U.S. Agriculture Secretary Mike Johanns said there are tariff rate quotas (TRQs) already in place against Central American countries if they export more than a minimum requirement of beef into the U.S. So far there has never been a TRQ placed against beef from any of those countries because they haven’t exported the minimum amount of product over a year.
In addition, officials with the National Cattlemen’s Beef Association (NCBA) said that quality hinders Central America from being much of a competitor in the U.S. beef market. Most Central American beef is from animals that have been grass fed between 18 months and two years and is most suitable for processing, particularly canned or prefabricated products, sources said.
Additional concerns of the agreement include not containing adequate environmental protections, or enforceable protections for such core workers' rights as the freedom to form a union. In fact, opposition said that the U.S. Department of Labor intentionally suppressed an analysis of CAFTA that showed several of the Central American countries included in the agreement have poor working conditions and do not enforce workers' rights laws. The Labor Department reportedly instructed the contractor to remove the reports from its web site, to retrieve paper copies of the report before they were distributed to the public, and to not discuss the studies with outsiders.
The agency has denied those accusations.
CAFTA now goes in front of the full House for discussion and vote later this month. House staffers indicated that a vote could happen sometime during the second full week of July. The biggest sticking point in the House is the debate over details regarding sugar trade with the Central American region. — Steven D. Vetter, WLJ Editor
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