U.S. business groups are pushing members of Congress and the Bush administration for a vote on the treaty in the first half of this year, according to Reuters. Proctor & Gamble and the National Pork Producers Council—a trade group based in Urbandale, Iowa—are among the U.S. corporations lobbying congressmen to pass the treaty.

The accord is a regional version of the Free Trade Agreement of the Americas (FTAA), which Washington has been pushing to establish throughout Latin America. It would immediately end duties on up to 80 percent of the $15 billion in U.S. goods exported to six countries in Central America and the Caribbean, according to the Bloomberg news agency. The affected countries are Nicaragua, El Salvador, Honduras, Costa Rica, Guatemala and the Dominican Republic. Caterpillar Inc., based in Peoria, Illinois, is looking forward to using the newly relaxed trade terms to sell more earthmoving equipment in Central America. Proctor & Gamble, which has an administrative office in Costa Rica, expects the treaty to help protect and extend the company’s extensive share of the market in household goods there.

A study by the International Trade Commission estimates that CAFTA would increase U.S. exports to the six affected countries by as much as $2.7 billion.

The Grocery Manufacturers of America is also eager to expand marketing in the region. The group estimates that when the tariffs set by the participating nations are eliminated, exports to the region of snack foods, candies, soups, and other food items produced in the United States could nearly double from $359 million to $662 million.

Top leaders of the AFL-CIO, many Democratic party politicians, and some Republicans from textile and sugar producing regions in the South have said they will oppose the treaty unless the Central American countries are required to adhere to stricter environmental regulations and strengthened labor laws. The Bush administration declined to send the treaty to Congress last year, Bloomberg reported, because it didn’t feel it had the votes to pass it.

“This is going to be an extremely difficult vote with the huge, monstrous trade deficit,” said Congressman Donald Manzullo. In 2004, the value of U.S. imports was $500.5 billion higher than exports as of October, surpassing the record $496.5 billion gap in 2003. When the value of imports is higher than exports in a given country, this is referred to as a trade deficit.

Another part of the building spat over trade policy will be a possible congressional vote to extend Bush’s “fast track” trade negotiating authority. It requires Congress to vote on trade agreements within 90 days after the administration has negotiated them without making amendments.

Two recent cases show how “free” the trade outlined in the treaty will be for the Central American nations. Washington is pressuring the Guatemalan government to repeal a regulation approved last month as part of the drive to establish CAFTA. The law allowed low-cost drug producers in that country to quickly produce generic copies of drugs produced by powerful U.S. pharmaceutical giants, instead of waiting five years to get the drug’s test data as had been the case under previous rules.

Richard Mills, a spokesman for the U.S. Trade Representative’s office, said the U.S. government was, “very disappointed” by the Guatemalan government’s action but was confident it would be corrected. Guatemalan president Oscar Berger has promised to review the law when that country’s Congress reconvenes in mid-January, the Los Angeles Times reported.

The government of the Dominican Republic acceded to U.S. pressure to repeal a tax on beverages containing imported high-fructose corn syrup December 23. The tax was aimed at protecting the Dominican sugar industry from low-cost imports. The country’s legislative Chamber of Deputies took the action after Washington threatened to remove the Dominican Republic from CAFTA, the Times said. “That was really the issue for including the Dominican Republic in CAFTA,” said Leon Corzine, president of the U.S. National Corn Growers Association.
 
 
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