Economy & Budget

Moderate Democrats Make a Pitch for CAFTA

A split has formed within the Democratic Party over the Central American Free Trade Agreement (CAFTA), which has attracted the support of moderates in the party but faces stiff resistance from their liberal colleagues.

The Senate passed CAFTA on June 30 by a vote of 54 to 45, despite having only 10 Democrats supporting the measure. The legislation faces an even stiffer test in the House, where even Republicans have been slow to support President Bush on the bill.

Making the case for Democrats is the moderate Democratic Leadership Council. Rep. William Jefferson (D.-La.) has been one of the most outspoken advocates for CAFTA.

“I’m supporting CAFTA because I believe it’s in the best interests of our country,” Jefferson said during a DLC-sponsored teleconference last week.

“We at (DLC) believe that the House should pass CAFTA, first because it’s a good economic deal for the U.S. as well as for Central America,” said Bruce Reed, the DLC’s president. “Second, we believe that the labor and environmental provisions in CAFTA are similar to previous trade agreements and have been significantly strengthened with recent negotiations. …The passage of CAFTA is important to send a clear signal that we want democratization to continue in Latin America.”

CAFTA would create a “trade free” zone with the United States and five Central American countries–Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua–as well as the Dominican Republic.

The nations make up about $32 billion in goods and services a year–or just 1% of total U.S. trade. The agreement’s supporters claim it would benefit U.S. manufacturers by eliminating import quotas and tariffs imposed by CAFTA countries on U.S. products and services.

In 1994 the House passed the North American Free Trade Agreement (NAFTA), which included 102 Democratic votes. However, Democrats’ support for free trade has waned significantly recently.

But as a result of opposing CAFTA–liberals claim the agreement is a step backward on labor and environmental standards–Democrats run the risk of alienating pro-business supporters.

“It’s difficult for Democrats to get through a message that we’re pro-trade when we’re voting no,” Rep. Benjamin Cardin (D.-Md.) recently in the Washington Post. “They [Democratic opponents] want to see Bush lose a major legislative initiative.”

Contradicting his party’s opposition is Jefferson–a Louisiana congressman who is one of only five Democrat supporters in the House.

“CAFTA countries bring in nearly 80% of the goods that enter our markets without any significant tariffs or duties,” Jefferson said. “On the other hand we pay very high custom charges to get into their markets. This would level the playing field. And, unlike NAFTA, things like job displacement don’t apply here whatsoever.”

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