House passes CAFTA agreement in tight vote
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House passes CAFTA agreement in tight vote
After last-minute lobbying, Bush gets a CAFTA win

Globe Staff  |  July 28, 2005
By Rick Klein

WASHINGTON -- President Bush eked out a hard-fought victory early this morning on his top trade priority, with the House of Representatives narrowly approving a free-trade agreement with Central American countries. The measure was widely viewed as a referendum on the Bush administration's trade policies.

The House's vote was held open for more than one hour to ensure passage, with the margin in favor of the Central American Free Trade Agreement by two votes. The final tally was 217 to 215.

The midnight arm-twisting capped a frenzied lobbying push by the Bush administration and House Republican leaders to secure support for the measure, which engendered strong opposition from Democrats and Republicans. House passage was the last obstacle to the pact's final approval because the Senate passed the measure last month.

In an indication of the stakes, the president made a rare lobbying visit to Capitol Hill yesterday to make personal appeals to wavering GOP House members. He urged members to think beyond the interests of their districts and argued that the United States should reward nations that support US policies in combating terrorism and pursuing democratic forms of government, according to members who attended the closed-door meeting.

''Those countries that democratically elected the president -- that are asking us collectively for help in this trade bill -- will be responded to positively," said Bill Thomas, Republican of California and chairman of the House Ways and Means Committee.

Unlike in previous trade agreements, the overwhelming majority of Democrats opposed the Central American pact, arguing that the Central American Free Trade Agreement would cost American jobs. The agreement's failure to include adequate workforce and environmental standards warrant its rejection, said House minority leader Nancy Pelosi, Democrat of California.

''It is a step backward for workers," Pelosi said. ''If the president wins this vote, he will have expended enormous resources to do so. He has all the power of the presidency, and all we have on the House Democratic side is the fact that we are right."

CAFTA, signed by Bush in May 2004, would eliminate most tariffs and import restrictions between the United States and five Central American nations -- Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua -- as well as the Dominican Republic. The agreement is expected to add $1.9 billion to the $16 billion-a-year Latin American market for US goods when fully implemented.

The agreement took on outsized political importance as the top trade agenda item being pushed by the Bush administration. It has become a lightning rod for tangentially connected issued such as outsourcing of jobs, the economic and environmental effects of globalization, and the legacy of the 1994 North American Free Trade Agreement, the pact upon which CAFTA is modeled, said Mark Smith of the US Chamber of Commerce, which supports the agreement.

''If you take the agreement for what it is, it's kind of a slam-dunk case," said Smith, the chamber's managing director of Western Hemisphere affairs. ''But the reality is -- and why it's so difficult -- is this has become a proxy war on a number of different issues."

Bush administration officials said a defeat of CAFTA could hurt the United States in the current round of world trade talks and harm the administration's ability to strike more important deals with bigger economic powers in the future.

But critics warned that opening markets to countries with lower wages and labor standards would cause further losses in US manufacturing jobs. Studies have blamed NAFTA for the loss of between 500,000 and 900,000 jobs, though some claim those jobs would have been lost anyway as the American economy has evolved to reflect globalization.

''We need to negotiate better trade agreements, quite honestly," said Representative Stephen F. Lynch, a South Boston Democrat. ''It's a one-way agreement: We continue to ship jobs to them, and they continue to ship goods to us. That's not the way it's supposed to work."

Some Republicans who usually vote with their party broke with GOP leaders on the pact, citing concerns about domestic job losses and a growing trade deficit.

''I simply cannot support a free-trade agreement that I believe would do nothing to address these problems," said Representative Bob Ney, Republican of Ohio and chairman of the House Administration Committee. ''Before we move forward with new efforts to lower the barriers to international free trade, we must review the consequences of the policies of the past and address the problems of the present."

Bush joined Vice President Dick Cheney and US Trade Representative Rob Portman in meeting with House Republicans to make a case for CAFTA. He had private meetings and phone calls with other members later in the day, though the White House declined to identify the members involved in the meetings.

Representative C.L. ''Butch" Otter, Republican of Idaho, said GOP leaders promised pork-barrel spending and future legislation to undecided members, with a massive highway spending bill scheduled to be completed this week as a prime location for pet projects. Otter said he opposed CAFTA, despite personal lobbying from Bush at the White House.

''They're pulling out all the stops," Otter said. ''They're either promising or threatening. They've done everything they could."

Democrats sought to maintain party unity, with organized labor groups lobbying for CAFTA's defeat. Party leaders told members who are inclined to support free trade that every vote for CAFTA allows a Republican member to oppose it, according to Democratic House members.

Shortly before taking up CAFTA, the House voted 255 to 168 to establish a new monitoring system designed to ensure China's compliance with US trade regulations. The measure is opposed by the Bush administration and some business groups, which argue that it sends the wrong message to a burgeoning economic powerhouse with whom the United States is seeking to build a better relationship.

Democrats accused Republicans of pursuing a toothless bill on China to win votes for CAFTA by giving on-the-fence House members a chance to support a get-tough policy on trade before voting to open more markets. Senate minority leader Harry Reid said the China measure will not pass the Senate.

 

 


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