CAFTA passage sparks job fears
Engler pushes trade pact, but critics say deal could hurt auto workers, state sugar beet farmers.
The Detroit News | August 3 2005
By Louis Aguilar
When President Bush signed a free trade pact Tuesday with six Latin American countries, he was flanked by supporters, including John Engler, head of the National Association of Manufacturers and former governor of Michigan.
Bush said the Central American Free Trade Agreement would "advance peace and prosperity in the region."
Engler told reporters that the measure was a "win-win" situation.
But the ceremony belies the fierce battle CAFTA has sparked over the future of U.S. trade policy and the bitter opposition from many Michigan players, including labor unions such as the United Auto Workers and sugar beet farmers from western Michigan.
CAFTA eliminates $33 billion in tariffs on goods traded between the United States and Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. That includes a 30 percent auto tariff in El Salvador and an average 11 percent tariff on autos and parts in the other nations.
Critics contend the pact sets a dangerous tone for upcoming trade agreements with Thailand, Argentina and Brazil, which they say could threaten tens of thousands of jobs in Michigan and other U.S. states.
"This wasn't about free trade-against -protectionism," said Sen. Carl Levin, a Democrat who voted against CAFTA.
"But trade has to be expanded in the right way and CAFTA is exactly the wrong way. It doesn't protect the rights of workers overseas and it encourages a race to the bottom in wages."
Michigan exported $35.6 billion in goods to the world in 2004, according to the U.S. Department of Commerce, but the CAFTA nations represented a small slice of that market -- about $125 million.
The UAW and other labor groups contend CAFTA doesn't adhere to an international standard of workers' rights set by the World Trade Organization that advocates the right to organize and prevents child labor and discrimination.
While the UAW doesn't expect significant job loss of auto workers as a result of CAFTA, upcoming trade agreements with Thailand, Argentina and Brazil could have "tremendous impact on Michigan workers," said Alan Reuther, UAW legislative director.
"Thailand is the second largest producer of pickup trucks. Argentina and Brazil have auto facilities. We can get flooded with products and tens of thousands of jobs could be affected," Reuther said.
Michigan's sugar beet industry, which contributes an estimated $115 million to the state economy, is sour on CAFTA because of fears it will result in a surge of cheaper sugar. Other Michigan commodities were expected to benefit, including beef, dairy and soybeans, according to the American Farm Bureau.
Rep. Candice Miller, R-Harrison Township, whose district represents many sugar beet farmers, voted against CAFTA despite provisions that limited the amount of imported sugar.
Bush remained steadfast in his support of CAFTA Tuesday.
"The best way, as far as I'm concerned, to make sure we continue to have sustained economic growth is to promote trade that is fair for the folks here at home and that is leveling the playing field," he told reporters.