NAFTA on steroids

You can debate the merits of CAFTA ? the Central American Free Trade Agreement ? all you want, as there are strong arguments on both sides.

We will say, though, that pitching the agreement in the bulls-eye of North Carolina?s textile heartland, an area ravaged by NAFTA, is an odd tactic.

Yet that?s precisely what President Bush is scheduled to do today in visits to Belmont and Dallas.

The agreement would knock down many trade barriers between the U.S. and five Central American nations ? Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua ? in addition to the Dominican Republic. Because of the latter nation, the agreement is also referred to as DR-CAFTA.

The measure recently passed the U.S. Senate in a 55-45 vote. Both of North Carolina?s Senators, Elizabeth Dole and Richard Burr, favored the accord.

However, this issue doesn?t neatly fall along party lines, and CAFTA may yet be derailed in the GOP-dominated House. Eleventh District Rep. Charles Taylor, R-Brevard, for example, is opposed to the measure.

Rep. Taylor said, ?In 1994 when President Clinton was urging me to vote for NAFTA, which he signed into law when it was passed by the then-Democratic majority, I refused to support it and tried to get the bill, if passed, spread over some 10 to 15 years in order to give our region an opportunity to transition. ? I have voted against all of these trade pacts and will vote against CAFTA because although CAFTA isn?t as bad as NAFTA, it still, like all the trade pacts, fails to provide and monitor a system of symbiotic trade relations, i.e. guaranteed equal trade rather than just dumping goods, either legally or illegally, on our businesses in this country.?

In terms of raw numbers, the impact of CAFTA simply isn?t very big. The market clout of the CAFTA nations has been pegged at $85 billion, about the size of New Haven, Conn.?s economy. Increased trade with the region, or for that matter decreased trade, will be a drop in the bucket, and will almost certainly do little to alleviate the U.S. trade deficit. In May alone, the U.S. received $55.3 billion more in imports than it sent out in exports, and that number was actually an improvement on previous months. Despite that improvement, for the year the trade deficit was on a path to hit nearly $700 billion, up from last year?s record of $617.6 billion.

Improved trade agreements might help those numbers, but as long as we?re importing vast amounts of oil at record prices, the deficit simply isn?t going away.

So what will the 2,000-plus page CAFTA do?

Proponents say it could mean more than $2 billion in additional U.S. exports. Opponents say it will harm laborers in Central America and possibly workers here. Particularly worried are backers of the U.S. sugar industry.

At this point we?ll say we are in favor of the concept of free trade. However, free trade isn?t always particularly free. The aforementioned sugar industry is working hard to make sure the wording of CAFTA protects its interests; other businesses, like the pharmaceutical and telecommunications industries, are doing likewise. CAFTA also carries investment provisions like those in NAFTA, which allows corporations to challenge laws designed to benefit the public if the company is damaged by those laws. One case spawned by this occurred when a Canadian firm, Methanex, tried to wring $1 billion out of California because of that state?s ban on a gasoline additive that was polluting its drinking water. Methanex was unhappy because of reduced sales of a product it produced that was the main ingredient in the pollutant.

That brings up one of the big problems with CAFTA; it follows the NAFTA model. While there are many numbers you can crunch to show whether NAFTA worked or not, the numbers we see in this state are shuttered mills. The owner of one N.C. textile firm, Amy Daugherty, told The Associated Press that ?CAFTA is NAFTA on steroids.?? At a news conference with Daugherty, Charles Saunders, president of another textile company, and American Manufacturing Trade Action Coalition officials pointed out that since NAFTA, more than half the nation?s 1.5 million textile and apparel jobs have vanished. Some 230,000 of those jobs left our very own state.

It seems an odd foundation to be building on, yet CAFTA appears to be more of the same. Moreover, it?s a major step toward the creation of the Free Trade Area of the Americas, FTAA, ranging across all of the North and South American continents.

Most Americans don?t know about FTAA, or much about CAFTA. What has been missing in this debate is, well, debate. This accord could have a major impact on our lives.

The representatives we elect have a responsibility to provide details before voting on this measure. Further, they are elected to draft laws on our behalf and seem to largely be abdicating that responsibility with CAFTA, basically placing the power to make the rules in the in the hands of businesses ? perhaps not even businesses based in this country. We hope the House takes time to look before making this leap.

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