Iowa Public Television


CAFTA Creates Rifts in Politics, Industry

posted on May 13, 2005

Hello, I'm Mark Pearson.

International trade dominated the American political and financial scenes this week.

*The Commerce Department reports the U.S. trade deficit fell sharply in March, to the lowest level in six months. *The reason? U.S. exports climbed to an all-time high ... and textile imports from China slowed. *Even so, the U.S. remains on pace to set a record annual trade shortfall of nearly $700 billion.

Critics say the trade gap demonstrates the failure of the Bush administration's free trade policies ... the same policies currently at the heart of a heated debate on Capitol Hill. The political stakes are high in the administration's efforts to win approval for the Central American Free Trade Agreement, or CAFTA.

But there's not only conflict in the political arena. There also is disagreement within the industries that would be most affected by the trade deal.

CAFTA Creates Rifts in Politics, Industry President Bush continues to promote his support of the Central American Free Trade Agreement, or CAFTA. The pact, signed by Bush last May, still needs the approval of Congress. That may be a problem, especially in the House, as Republican lawmakers from sugar and textile-producing regions are joining Democratic opponents of CAFTA.

According to the Associated Press, CAFTA opponents are claiming they have enough votes to kill the proposal. One reason why the debate is so heated is that many national organizations are split on the issue. For example, the American Farm Bureau Federation supports the free-trade agreement, while some state affiliates do not. Other groups like the National Association of Wheat Growers, the National Corn Growers Association and the National Potato Council are facing similar divisions.

In addition, two major textile groups have come out on opposite sides of CAFTA. The National Council of Textile Organizations is supporting the proposed pact. It argues CAFTA will help ensure that the U.S. textile industry remains competitive with China. Meanwhile, the American Manufacturing Trade Action Coalition opposes it The Coalition points out that since the North American Free Trade Agreement was enacted 10 years ago, textile and apparel manufacturing jobs in the U.S. have been cut by more than half.

Critics further argue that more free-trade pacts are not a good idea in times of soaring trade deficits. U.S. groups like labor unions and sugar farmers especially are upset with the more than 3 million lost manufacturing jobs over the past five years.

The president defends CAFTA, saying the agreement would open a market of 44 million consumers for U.S. farm products and manufactured goods.

Tags: agriculture industry Latin America news trade