Future of the Central American Free Trade Agreement Unclear in Washington

Future of the Central American Free Trade Agreement Unclear in Washington
Written by Mario Ritter

I’m Gwen Outen with the VOA Special English Agriculture Report.

President Bush is urging Congress to pass the Central American Free Trade Agreement, or CAFTA. Under CAFTA the United States would join the Dominican Republic and five Central American countries. The five are Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador.

The agreement deals with agriculture and all other trade. It requires the nations to reduce or end import taxes on most products. It also requires them to enforce their own labor and environmental laws.

Support among lawmakers in Washington is mixed. Democrats mostly oppose the agreement. So do a number of Republicans, who control Congress. But the president says Congress needs to pass the agreement to create jobs and strengthen democracy in the Americas.

The Bush administration says the United States has about thirty-two thousand million dollars a year in trade with CAFTA nations. The Office of the Trade Representative in Washington says United States farmers will gain new markets for their goods. And it says many Central American agricultural products like coffee and tropical fruit do not compete with American products.

In two thousand three, CAFTA nations imported about forty-one percent of their agricultural products from the United States. But that was down from fifty-four percent ten years ago.

CAFTA will immediately remove import taxes on grapefruit, apples, almonds and many other fruits and nuts. Other tariffs will be reduced over five, ten or fifteen years.

But CAFTA will not remove all tariffs. Sugar will remain protected in the United States. The agreement establishes sugar export limits for each country. The Trade Representative’s Office says the new limits represent less than two percent of United States sugar production.

The United States sugar industry opposes CAFTA. Other opponents include textile industry groups that worry about the risk of job losses. Labor groups say the free trade agreement does not protect American jobs or labor rights. And environmental groups say the agreement is weak on protecting the environment.
Agriculture Secretary Mike Johanns praises CAFTA as good for American farmers. He says CAFTA nations can now place high tariffs on goods from the United States, yet escape duties on most of their own products.

This VOA Special English Agriculture Report was written by Mario Ritter. I'm Gwen Outen.