Showdown looms as hearings on CAFTA begin in the House

Commerce Secretary Carlos Gutierrez told the Emergency Committee for American Trade yesterday that the Central American Free Trade Agreement (CAFTA) is “the trade priority right now” and questioned why anyone would oppose it.

“What would it say about the prospects for global free trade if we didn’t meet the challenge of our own hemisphere?” he asked. “How can we do anything but support our friends and neighbors in Central America?”

But congressional leaders with jurisdiction on trade matters are having difficulty retaining support from their own members on the agreement, while leading Democrats are lining up opposition.

“I think it’s in serious trouble,” Sen. Byron Dorgan (D-N.D.), told The Hill in an interview in his office. “There’s growing opposition in the Senate. They’re clearly not confident, or they wouldn’t have waited a year to bring it up.”

Dorgan said the agreement, which also includes the Dominican Republic, would destroy the ability of his state’s sugar-beet growers and Southern sugar-cane growers to compete. Dorgan has formed an anti-CAFTA caucus, which also includes Republican Sens. Lindsey Graham (S.C.), Larry Craig (Idaho) and Norm Coleman (Minn.).

Several Southern Republicans in the Senate, including Saxby Chambliss of Georgia, also have criticized the agreement. “It has a level of resistance that I have not seen before,” Graham said.

Graham helped engineer a recent Senate vote on China’s trade and currency practices that won support from two-thirds of the Senate. “If CAFTA goes down, it will be the strongest signal since the vote we just had that the Senate wants better policing of trade practices,” he said.

House Majority Leader Tom DeLay (R-Texas) plans to bring CAFTA to a vote in May, but opponents have begun questioning whether he will be able call it up without finding more support. Only three House Democrats, Reps. William Jefferson (La.), Henry Cuellar (Texas) and Jim Moran (Va.), have backed the agreement, and a House Democratic leadership aide estimated GOP defections were in the high double digits. Some put the number as high as 30, while Rep. Sherrod Brown (D-Ohio) said 60 Republicans are against CAFTA.

“It’s in a lot of trouble,” the Democratic aide said. “I don’t see how they can bring it to the floor. I don’t think there’s anywhere near the situation where they could balance Republican defections with Democratic pickups.”

So far, Democratic leaders haven’t been actively working against the agreement — although labor and outside groups have been on Capitol Hill meeting with members this week. Business groups also have been stepping up their efforts in support of it.

“I assume there will be significant leadership opposition, and significant communication on this bill from leadership,” the aide said. “That hasn’t happened yet.”

Supporters have been hurt by the retirement of Rep. Cal Dooley (D-Calif.) and the death of Rep. Robert Matsui (D-Calif.), who were both leaders on trade. Rep. Sander Levin (D-Mich.), the ranking Democrat on the Trade Subcommittee on Ways and Means, has come out against the pact. The Ways and Means Committee holds its first hearing on CAFTA today.

Sugar and textile interests, meanwhile, have been working hard to convince individual members that CAFTA isn’t a good deal for U.S. producers.

Sen. Richard Burr (R-N.C.) said yesterday that he was still concerned with the deal’s textile provisions. He said talks continue with the Commerce Department on possible modifications to the agreement. Asked if he thought CAFTA could pass the normally free-trade-leaning Senate, Burr replied, “I don’t think so.” But he said that if the administration solves the textile and sugar problems “it passes easily.”

Dorgan, though, warned members not to put faith in side agreements reached with the administration in the days leading up to a vote. “They’re not worth the paper they’re printed on,” he said. “They don’t mean a thing.” Under laws governing trade-promotion authority, Congress cannot change the substance of the agreement itself.

In his speech yesterday, Gutierrez pointed to substantial growth in the U.S. economy and cited a Chamber of Commerce prediction that U.S. sales to Central America could expand by $3 billion in the first year after the agreement takes effect.

But asked whether President Bush would begin to speak out on the agreement, Gutierrez would only say that he expected the discussion to increase in intensity. Asked why more Democrats weren’t supporting the deal, and what the administration is doing about it, he responded, “I have a hard time explaining it.” He added that after dealing with CAFTA the administration would be able to turn to a Free Trade Area of the Americas being negotiated with Brazil, and to the Doha round of trade talks.

Some observers predict that CAFTA will provoke the biggest trade fight in years.

“There will come a time when Congress will just make a stand,” Dorgan said. “I think CAFTA is where Congress will take a stand.”

“People want to put this all on sugar, textiles and labor,” said Thea Lee, chief international economist for the AFL-CIO. “Maybe people feel like they’ve been burned on some of the trade votes they’ve cast in the past.”