Iowa Public Television


CAFTA Continues to Get Hammered

posted on June 10, 2005

Hello, I'm Mark Pearson. A government report released this week indicates America's record trade deficit continues to grow.

According to the Commerce Department, the nation's trade gap rose 12 percent in April. While the increase was less than some economists had predicted, the trade deficit is running at an annual rate of $686 billion -- on pace to top last year's record.

Hoping to bring the scales closer to balance, the Bush administration is aggressively promoting the Central American Free Trade Agreement, or CAFTA.

The deal would phase out protective tariffs and quotas in 6 Central American countries. Critics of CAFTA, especially the U.S. sugar industry, claim it would hurt producer prices.

The Bush administration counters that CAFTA would have a minimal impact on the sugar industry while opening export markets to 44 million Central Americans.

CAFTA was negotiated more than a year ago, but Congress still must approve it. And this week, lawmakers got an earful from those opposed to the deal.

CAFTA Continues to Get Hammered The Central American Free Trade Agreement, commonly known as CAFTA, continued to draw fire this week during a Senate Agriculture Committee hearing.

Jack Roney, American Sugar Alliance: "We regard CAFTA as a life and death issue. American sugar farmers who will lose their jobs are insulted by CAFTA supporters who trivialize the potential harm with cutesy, misleading depictions of additional access and teaspoon or packets per day comments."

Sugar growers remain strongly opposed to CAFTA. And, some key Republican lawmakers are breaking rank with the Bush administration by criticizing the pending agreement.

Sen. Saxby Chambliss, R - Georgia: "Many senators believe that paying Central America governments for surplus commodities or direct appropriations will be politically difficult to sustain or justify."

According to a recent report by the International Trade Commission, CAFTA will benefit the U.S. economy by less than .01 percent. And opponents claim modest gains will be offset by significant job losses.

Jack Roney, American Sugar Alliance: "CAFTA will cost thousands of sugar farmers and workers their jobs. The certain dangers of CAFTA to the U.S. economy, far out-way the marginal possible benefits.

CAFTA would allow six Central American countries to ship more sugar to the United States. While the trade deal has special clauses limiting the amount, U.S. sugar growers worry any increase will harm their market.

Secretary of Agriculture Mike Johanns continued to defend the deal, saying it would allow only the six Central American countries to ship about one day's worth of U.S. production into this market.

Mike Johanns, Secretary of Agriculture: "Basically, the broad powers we have over sugar, there just isn't enough sugar involved to impact how we manage the sugar program in the farm bill."

Johanns insisted CAFTA is crucial to the World Trade Organization's current "Doha round" of global trade negotiations. He warned that if the agreement doesn't pass, the U.S. will have real challenges ahead.

Mike Johanns, Secretary of Agriculture: "If we back away now, we will send a bad message to these countries. How do you negotiate a WTO agreement when you can't get a trade agreement through?"

The agreement was negotiated more than a year ago and President Bush is urging Congress to approve it before taking a month-long vacation in August. However, opponents in the House claim they now have enough votes to defeat CAFTA. Republican supporters say it won't happen as long as the current situation exists.

Tags: agriculture government Latin America news trade