Administration fighting an uphill battle to win approval

WASHINGTON - After more than a year of false starts, the Bush administration sent a free trade agreement with Central American nations and the Dominican Republic to Capitol Hill June 23, setting up what is expected to be this summer's political blockbuster.

Lobbying over the Central American Free Trade Agreement, known as CAFTA, has reached a fever pitch in the past few weeks as the Bush administration has battled a broad coalition of labor, environmental and farm groups who oppose the treaty. "Hand-to-hand combat" is how Agriculture Secretary Mike Johanns has described the process.

Hours before the legislation was sent to Congress, President Bush invited ambassadors from CAFTA nations to the White House to offer a ringing endorsement: "CAFTA is more than a trade agreement, it is a signal of our nation's commitment to democracy and prosperity for the entire Western Hemisphere. We urge the United States Congress to pass CAFTA."

Trade pact

The pact signed with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Caribbean nation of the Dominican Republic has languished for more than a year in the face of stiff opposition from Democrats who fault weak labor and environmental protections, as well as from Big Sugar, cattle ranchers, textile mills and others.

The six CAFTA countries offer only a small market for U.S. exports. Their combined economies of $85 billion only are about the size of the economy of Orlando, Fla. And two-way trade is just $32 billion, a fraction of America's total $2.3 trillion foreign trade last year.

But the CAFTA countries play a key role as a location for offshore assembly plants for U.S. apparel, and the finished clothing fills cargo containers arriving in south Florida ports and airports. Sugar growers across the nation say CAFTA's increased allotments for Central American sugar imports would destroy their industry.

Other agricultural producers share those worries. Ethanol makers in the Midwest, for example, are concerned that cheap Brazilian ethanol brought in duty-free via Central America could swamp their nascent industry.

Meanwhile, retailers, importers and the U.S. Chamber of Commerce have been working overtime - including during an advocacy day June 22 - to promote the accord as a way to break down trade barriers.

But CAFTA's significance goes well beyond just the trade numbers. The fight over CAFTA has been transformed into a debate over the free trade agenda itself. If Congress fails to pass CAFTA, a new treaty would have to be negotiated with all the member nations and it could cloud prospects for a Free Trade Area of the Americas and upset already difficult talks in the World Trade Organization.

Lobbying legislators

So important is passage of CAFTA to breathe new life into stalled FTAA talks that Jorge L. Arrizurieta, who spearheads the effort to land a possible FTAA headquarters in Miami, has traveled to Washington four times in recent months to lobby Florida legislators in favor of CAFTA.

Florida sugar producers, along with their counterparts in the sugar beet industry, have been implacable foes of the agreement, forcing the administration to look for a compromise to prevent imports from overwhelming their industry. But June 23, the American Sugar Alliance, an industry group in Washington, reported that there still was no deal on sugar.

Sugar's opposition to CAFTA is one reason Florida politicians aren't universally supporting the accord.

"Sugar just has a grip," says Republican Rep. Clay Shaw, one of the few Florida legislators who has openly supported CAFTA.

Says Jack Roney, director of economics for the American Sugar Alliance: "Unless we defeat this, we won't be around to worry about people's opinion."

Uphill battle

The administration still is fighting an uphill battle to win approval for the trade accord.

"Bush will pull it out," says trade economist Gary Hufbauer, one of the strongest Washington voices in favor of trade agreements. "But he clearly has his work cut out for him."

But Democrats think they have the votes to defeat it. "Today, we would beat CAFTA decisively," says Rep. Sherrod Brown, D-Ohio. Brown lists 190 Democrats and 40 to 50 Republicans as voting against CAFTA.

At this point, winning CAFTA passage may require as much old-fashioned political pork as Congressional arm twisting. "Chance of passage is dependent in part on the president's opening up the bank," says Brown.

One reason CAFTA is a harder sell than any previous trade agreement negotiated by the Bush administration is that pro free trade Democrats have objected to weak labor protections.

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