Some senators say they’re wary of free-trade deal

Graham has long been known to harbor concerns about the U.S. trade deficit and already has worked with Sen. Charles Schumer (D-N.Y.) to try to force China to change its currency policy so as not to hamper U.S. exports.

But his decision to work against the trade deal, called the Central American Free Trade Agreement, or CAFTA, underscores the serious problems Republican leaders face in lining up support within their own party to move the agreement through the Senate.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) yesterday acknowledged the challenge in advance of a scheduled hearing on the agreement today.

“This is the toughest bilateral agreement that we’ve had to get through the Senate,” Grassley said, adding that there was a misconception that countries were failing to enforce labor laws as part of existing trade agreements. He said he was working on textile issues to bring opponents on board but acknowledged, “The jury’s still out.”

Dorgan said that he and Graham had formed what he termed the “Anti-CAFTA Caucus” and said the two were sending joint letters to their colleagues urging opposition to the agreement. “CAFTA is just one more chapter in the book of failure with trade agreements,” Dorgan said.

A range of Republicans has voiced concerns with the agreement, which lowers trade barriers between the United States and five Central American nations — Honduras, El Salvador, Guatemala, Costa Rica and Nicaragua — as well as the Dominican Republic.

“I think the trade deficit is becoming so high and so alarming that any trade legislation is in jeopardy now, irrespective of its merits,” said Sen. Gordon Smith (R-Ore.). “That has to be overcome before anything is done. Otherwise, it will fail.”

Although Smith, a Finance Committee member, generally has supported free-trade legislation — including a recent trade agreement with Australia — he said he was “truly undecided” on the CAFTA measure.

The sugar lobby has been engaged in intensive lobbying against the bill, as several senators acknowledged. Sen. Conrad Burns (R-Mont.), who is up for reelection, said he was worried about the trade bill. Asked why, Burns replied simply, “Sugar.” Sen. Ben Nelson (D-Neb.) also has expressed concerns, citing the impact that changing sugar quotas might have on sugar-beet growers in his state.

Sen. Saxby Chambliss (R-Ga.) sent a jolt of fear down K Street a few weeks ago when he announced his concerns about the trade deal, in part because of his influence on the Agriculture Committee. “I’ve been a free-trader, and I’d like to support this,” Chambliss said yesterday. “Right now, I’m not in a position to.”

Chambliss said there were “some discussions going on” to try to deal with the effects of the agreement, saying negotiators were working hard to reach an accommodation on textile and sugar provisions.

But under Trade Promotion Authority rules, Congress cannot amend the substance of the trade agreement itself. The Finance Committee holds what is known as a mock markup of the deal, which the administration then officially transmits to Congress.

One thing the administration could do is to issue new safeguards for textiles and other industries through regulatory procedures. Supporters also hope to use the hearing process to persuade colleagues that more open trade can bring jobs to their states.

An administration official, asked about widespread concern about the bill, said it was too early to ensure support because the agreement hadn’t even been officially submitted yet. Senate Minority Leader Harry Reid (D-Nev.), asked whether the votes were there to pass CAFTA, said he hadn’t spent “one minute” thinking about the issue.

Meanwhile, Sen. Evan Bayh (D-Ind.) announced yesterday that he had placed a hold on the nomination of Rep. Rob Portman (R-Ohio) to be U.S. trade representative and would not allow the nomination to come to a vote until Senate Majority Leader Bill Frist (R-Tenn.) agrees to bring up legislation on enforcement of anti-subsidy laws.

On CAFTA, several members have referred to the 2-to-1 vote for an amendment by Schumer and Graham on a State Department authorization bill last week calling for trade actions against China if it does not stop manipulating its currency. The amendment, they said, signals a growing concern among members about the costs of free-trade deals.

Graham said he is basing his opposition to CAFTA on China — a signal that he is not interested in negotiations on small steps to mitigate the agreement’s effects. “I don’t want any new expansion of trade agreements until we enforce the ones we got,” Graham told The Hill.

“What I think we need to do is slow down and get China under control before we expand trade agreements that they can abuse.” He said he was concerned that CAFTA would become a “vehicle” that would allow China to dump products in the United States below costs. South Carolina’s textile industry has been devastated in recent years by low-cost imports from China.

“China presents a great threat to the present because they cheat,” Graham added.

But even as Grassley acknowledged difficulties in getting CAFTA legislation through the normally free-trading Finance Committee, several Republicans expressed their general support for trade agreements.

“I’ve always felt the sugar subsidy was an atrocity,” said Sen. Judd Gregg (R-N.H.). “It costs the American taxpayer about $2 billion a year. It funds special interests who are at the margin of the American agriculture industry.”

And Sen. Orrin Hatch (R-Utah), a Finance member, said CAFTA presented “one of the few ways we can stop the hordes of people coming into this country by helping them become part of the free-trade agreement.”

GOP leaders also will have their hands full trying to get CAFTA through the House. Rep. Collin Peterson (D-Minn.), the ranking Democrat on the Agriculture Committee, released an issue brief on the agreement yesterday and said, “So-called free trade agreements are clearly not delivering as expected for America’s farmers.”