The ups and downs of a multi-trillion dollar economy rattled financial markets this week. The Dow Jones industrial average fell to its lowest level since last October. That's driven a lot of money back into commodities again.
The impetus for the investment shift was a series of negative economic reports. *Inflation at both the retail and wholesale level surged last month, thanks largely to the skyrocketing cost of gasoline and energy products. *Even excluding the volatile food and energy sectors, the core inflation rate saw its biggest one-month increase in 31 months. *Add in a larger-than-expected drop in the index of leading indicators, and you have a recipe for a rocky economic week.
Trade issues are part and parcel of the overall economic outlook. And FREE trade issues are at the heart of the debate over just about any form of global commerce. That's certainly the case these days in Washington, where the gloves are off in the dispute over the Central American Free Trade Agreement, or CAFTA
Rep. Sherrod Brown, D-Ohio: "It will harm our constituents, our farmers, our industry, our workers, our small businesses, our families."
Sen. Byron Dorgan, D-North Dakota: "You'd have to be brain-dead in this country not to see the bankruptcy of our current trade strategy...Let me just say this trade agreement, like all other trade agreements before it, pulls the rug out from under America's workers, pulls the rug out from under America's farmers, and I predict, would dramatically increase our trade deficit and I think it ought to be defeated."
Sen. Larry Craig, R-Ohio: "...when we negotiate trade agreements and selectively trade one segment of our economy off against another in the hopes that the economies that we are hurting are lesser or smaller then we are doing it the wrong way."
Using North American Free Trade Agreement as an example, Ohio Democratic Congresswoman Marcy Kaptor made it clear why she believed CAFTA is a recipe for disaster.
Rep. Marcy Kaptor, D-Ohio: "And if you look back to what happened, and the Florida delegation believed that the tomato agreement would save them, the tomato industry in Florida is literally dead."
Despite the bi-partisan call for defeat of CAFTA, the Bush administration has garnered support from various groups including the American Farm Bureau Federation.
Bob Stallman, President, American Farm Bureau Federation: "Well it's very clear that it's positive for our farmers. You take beef, pork, poultry, rice, wheat, dairy and the list can go on. This agreement is clearly positive for those commodities. It increases our exports and it's very important to increase our exports in this country if we are going to maintain a viable U.S. agriculture."
At later testimony before the House Ways and Means Committee, various groups on both sides of the issue were allowed to make statements, but no Congressional members were allowed to testify.
Peter F. Allgeier, acting U.S. Trade Representative: "But today we have neighbors in Central American and the Dominican Republic who want to trade goods, not guns, across their borders. Who want to replace chaos with commerce, and to use CAFTA as an important tool of reform that will help deepen and strengthen democracies."
Leaders in Congress project the vote on the controversial trade issue will reach the House by mid-May and the Senate just before the August recess. Congressman Brown says he has gathered enough votes in both bodies to defeat the measure.