President Bush is to welcome Thursday the leaders of five Central American nations plus the Dominican Republic to the White House to press the case for the Central America Free Trade Agreement (CAFTA). The accord would lower trade barriers among the seven countries, in hopes that closer commercial ties will boost the economies of all nations involved. But the pact's fate is far from assured in the U.S. Congress, which must approve the measure before it can go into effect.
The battle over CAFTA has begun. This week, the presidents of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic took the unusual step of crisscrossing the United States to personally lobby business groups and politicians on the accord's behalf.
On Capitol Hill, backers of the trade deal say the United States has nothing to lose from CAFTA, and everything to gain. At a news conference, Senator Charles Grassley from the agriculture-rich state of Iowa said the accord will tear down barriers to U.S. exports.
"Today, over 99-percent of the food and agricultural products that we import from the region is duty-free. Meanwhile, our food and agricultural exports are hit with tariffs averaging 11 percent, with some tariffs ranging as high as 150 percent," he noted.
Standing next to Senator Grassley was Bob Jones, representing the giant U.S. conglomerate Kraft Foods.
"[About] 96x percent of the world's consumers live outside the United States. If we are going to continue to expand our business, exports are key. And about 46 million consumers live in six CAFTA countries," he added.
U.S. grocery products lobbyist Manly Molpus says CAFTA will bring long-term benefits.
"The Central American region is an attractive market to us. These countries are comprised of young, growing populations, and as incomes rise, consumers in these countries will likely switch from basic staples to more value-added products. And as they do, we want to be there with our well-known [product] brands," he explained.
CAFTA is designed to foster U.S. investment in Central America and strengthen intellectual property protections. It follows the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and is seen as an intermediate step toward a proposed hemisphere-wide Free Trade Area of the Americas.
But if U.S. business interests are lining up in support of CAFTA, organized labor, environmentalists and other advocacy groups stand firmly opposed.
The secretary treasurer of America's main labor federation, Richard Trumka, denounced CAFTA at a Capitol Hill rally Tuesday.
"America is losing good jobs due to bad trade deals,” he said. “And America's manufacturers cannot compete because the deck is stacked against them [trade regimes are unfair]. Over the past four years, more than 2.7 million [U.S.] manufacturing jobs have disappeared."
The head of the U.S. steelworkers' union, Leo Gerard, said CAFTA is a bad deal for everyone except major transnational corporations.
"CAFTA would lower labor standards, it would lower environmental standards, it would lower living standards," he added.
Across Central America, farmers, laborers and students have demonstrated against the pact, arguing that local small-scale enterprises cannot compete with their giant U.S. counterparts.
Dominican union organizer Rafael Abreu traveled to Washington to voice his concerns.
"What we need is a new world equilibrium, where there are good-quality, decent jobs that allow people to live with dignity,” he explained. “A trade deal of this sort that impoverishes workers will only cause more people in countries like the Dominican Republic to migrate illegally to the United States."
U.S. sugar producers also object to CAFTA provisions that would relax U.S. import quotas on the commodity, which many countries can produce more cheaply than the United States. But Kraft Foods representative Bob Jones says it is vital that no country be allowed to take an industry or sector off the table if the trade deal is to succeed.
"As a country that enjoys the world's strongest economy, our message to other countries simply cannot be that we are only interested in free trade in those goods and services in which we maintain a competitive advantage," said Mr. Jones.
The legislatures in El Salvador, Guatemala and Honduras have already approved CAFTA. Costa Rica, Nicaragua and the Dominican Republic appear to be awaiting U.S. action on the pact before proceeding themselves.
In Washington, Congress is expected take up the measure within several weeks. White House spokesman Scott McClellan says President Bush has two goals: expanding trade and "leveling the playing field" for U.S. goods. He says CAFTA accomplishes both.