As vote nears, CAFTA lobbying intensifies

Lobbyists for technology and broader business groups are stepping up their efforts to win support for the Central America Free Trade Agreement (CAFTA) as critics of the pact counterattack that it would add to the trade deficit and hurt manufacturers.

Though the free-trade deal is likely to have a relatively minor impact on the U.S. economy, it is seen by both sides as precedent-setting: Either it marks a turn in how Congress views free-trade pacts or it is yet another step in the inexorable push toward ever larger free-trade measures.

“The level of engagement is increasing as we are getting closer to a vote,” said Adam Kovacevich, a spokesman for the Information Technology Industry Council (ITIC), a leading backer of CAFTA.

Lobbyists said they expected a vote shortly before or after the July 4 recess. President Bush was expected to send Congress implementing language this week. After lawmakers receive it, they will have 90 days to vote on the measure.

Under so-called fast-track trade authority, Congress cannot amend the pact, only approve or reject it outright.

Lobbying efforts included a fly-in today sponsored by the U.S. Chamber of Commerce, whose outspoken president, Tom Donohue, has reportedly warned lawmakers against voting no on the deal.

In hopes of combating a common view that big business is the biggest beneficiary of trade deals, the Chamber effort was limited to what it defines as small businesses. About 50 American and 20 Central American small businesses were expected to meet with lawmakers as well as Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Rob Portman.

Small businesses are the “big winners, and they are often not the ones who people consider to be big winners in free-trade agreements,” said Chamber senior trade adviser Leslie Schweitzer.

Business representatives will present lawmakers with a state-by-state breakdown of what the Chamber estimates the benefit of the pact will be. Alabama, for example, would see its exports rise by $190 million during CAFTA’s first year, Schweitzer said. Similar estimates have been formulated for each congressional office.

Critics of the deal, meanwhile, held a press conference yesterday during which a letter signed by 23 manufacturing, textile and business groups opposing the deal was released. Groups that signed the letter, including the National Textile Association and various local and regional groups, attended the press conference.

Past deals have led to huge trade deficits and closed factories here as companies sought cheaper foreign labor in countries that don’t face tariff barriers to the U.S. market, the letter, addressed to Bush, stated.

“CAFTA is simply the latest in this series of outsourcing deals that are gutting our domestic manufacturing base,” wrote Kevin Kearns, president of the U.S. Business and Industry Council, a group long opposed to trade pacts.

Rep. Sherrod Brown, an Ohio Democrat, called CAFTA a “failed agreement” at the press conference.

Brown has said supporters don’t have the votes to pass CAFTA, but supporters expressed optimism that the deal would pass. One estimate holds that at least 20 Democrats would have to vote yes in the House for CAFTA to pass. So far, five have said they support the trade deal, but as many as 70 lawmakers have said they remain undecided.

Hoping to peel off a few more Democrats, pro-CAFTA forces have lobbied members of the Congressional Black Caucus, a group whose members tend to be more liberal but one nevertheless that may yield a handful of yes votes, according to one CAFTA lobbyist.

Mike McKay, a spokesman for Rep. Gregory Meeks (D-N.Y.), said his boss has several meetings a day with lobbyists on CAFTA when he is in town. Meeks is an attractive target for pro-trade groups because he voted for trade-promotion authority, which established the fast-track vote.

Among the industry sectors supporting CAFTA, technology companies have been particularly active in pushing the measure on Capitol Hill, and a side issue in the debate is that it may show how effective technology companies have become in their lobbying efforts.

“This vote is an important signal that technology and the broader business community are committed to free trade,” said Kovacevich, of ITIC.

His group holds weekly whip meetings, usually attended by 15 to 20 tech companies. The association has also told members it will include CAFTA on its vote score.

Intel and Microsoft have led lobbying for CAFTA. Microsoft CEO Steve Ballmer, for example, met with several senators last week to urge passage of the trade deal.

Ballmer argued that CAFTA approval will reaffirm the United States’ commitment to free trade, which will in turn strengthen this country’s efforts to pressure China to reduce its growing trade imbalance with the U.S., one source said. Ballmer was among a group of tech CEOs brought to town by the Business Software Alliance.

ITIC, Microsoft and Intel are paying for advertisements in area publications in support of CAFTA, along with Dell, IBM and Oracle.

The ads, which start running today, estimate that CAFTA will increase high-tech imports to Central American countries and the Dominican Republic by 11 percent, eliminate barriers to e-commerce and protect intellectual property.

CAFTA opponents have been equally active and include some powerful political lobbies. Chief among them is the sugar industry, which opposes the additional sugar imports that CAFTA would allow.