Senate Committee Approves CAFTA

by Mike Godfrey, for LawAndTax-News.com, New York

04 July 2005

The US Senate Finance Committee voted 54-45 to approve the Central American Free Trade Agreement last week. Now the full Senate will vote on the Agreement, followed by the House of Representatives.

The Senate Finance Committee, by voice vote, "favorably recommended" legislation that would implement the trade pact with the Dominican Republic, Nicaragua, El Salvador, Honduras, Costa Rica and Guatemala. CAFTA would immediately eliminate duties on more than half the value of US farm exports to the region, expand IP protections and open telecommunications and other markets.

The White House has battled hard for CAFTA, calling it vital to Central America and highly favourable for US farmers and businesses. More than 80% of imports from the CAFTA region already enter the USA duty-free, though US exports to the region often face tariffs of 40% or more.

Protectionist forces, particularly sugar growers, have fought back energetically. "This CAFTA agreement will hurt American workers ... and force more immigration into the United States," Sen. Richard Durbin, D-Ill., said. "It couldn't come at a worse time."

Newly appointed US Trade Representative Rob Portman urged the full Senate to give its approval to the deal: "CAFTA-DR is a great agreement that levels the playing field for American workers, farmers and businesses, will boost US exports and will promote stability and democracy among our friends and neighbors," he said.

The House is likely to be even more difficult than the Senate; the powerful Ways and Means Committee is expected to vote on the measure this week.

CAFTA has been submitted to Congress under the fast-track trade negotiating authority granted to the administration in 2002. Such trade agreements can't be modified by Congress, which can only approve them or not, and has just 90 days in which to do that.

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