A Spoon Full of Sugar: Sugar Producers May Help CAFTA to go Down

On June 30, 2005, the Senate passed the Central American Free Trade Agreement (CAFTA), and the controversial measure now faces a tough battle in the House.

Although the trade agreement with Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, and the Dominican Republic was completed a year ago, it has been stalled due to opposition from the sugar industry and labor unions.

Supporters say that the pact is a positive model for larger trade agreements to come. But the opposition argues that CAFTA merely continues failed trade policies that have resulted in a historically large trade deficit and the exportation of millions of American jobs.

The purpose of CAFTA

The pact would remove most restrictions on about $32 billion in annual trade with Central America.

Passing CAFTA is essential to White House negotiations on similar trade agreements with other countries. If Congress fails to pass the measure, it could cause other nations to doubt America’s leadership role in trade. The White House also claims that CAFTA is helping to secure democracy in Central America, which is economically unstable.

But lawmakers on both sides of the aisle are questioning CAFTA. Many say the agreement will hurt American industry and workers.

Sugar fight

Sugar producers oppose CAFTA because it would loosen import quotas that work to keep American sugar prices higher than world prices.

Although House members from sugar-producing states are poised to vote against the bill, they may switch sides. To win over concerned Senators, the White House offered to limit sugar imports for two more years by paying Central American producers not to export to the U.S. This deal won over Republican Senators Norm Coleman of Minnesota and Mel Martinez of Florida.

The sugar industry donates large sums to both the Republican and Democratic Parties.

Labor fight

Most Democrats voted against the bill -- they feel that the trade pact will cause more American workers to lose their jobs.

Further, CAFTA does little to improve labor laws in Central America, where laborers are paid just dollars a day and are subjected to poor working conditions.

To win over Jeff Bingaman (D- New Mexico) and James M. Jeffords (I- Vermont), The White House offered $300 million over the next five years to improve enforcement of Central American labor laws. Democrat Christopher Dodd of Connecticut was not convinced. He said the funding was a step in the right direction, but not enough to truly protect labor rights.

Moving to the House

The House Ways and Means Committee already approved the bill, but the legislation faces an uphill battle on the House floor.

Despite concessions by the Bush administration, many lawmakers are still concerned about damages to American industry and job losses for American workers.

Dissenters, especially Republican ones, are likely to be heavily lobbied over the week-long July Fourth recess. The administration is set up to apply extra pressure now that both the Senate and the House Ways and Means Committee have approved the plan.

But ultimately, Representatives will have to answer to their districts, especially districts that include sugar producers and workers who could lose their jobs because of CAFTA.

Should the federal government use tax dollars to pay other countries to treat their workers fairly?

Should the federal government continue to limit sugar imports into this country in order to keep sugar prices higher for American consumption?

In the trade-off between losing jobs to poorer nations and creating jobs through businesses that can export, where do you stand?

What do you think?

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Article Posted on: 7/7/2005