Ninth Round of Trade Talks Begin
Negotiators have launched what they hope will be the final round of talks aimed at creating a new Central American trade pact, if a spat over sugar doesn't sour the mood.

Working against a Dec. 16 deadline, trade representatives from the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are trying to hammer out the final, toughest issues on a trade deal covering everything from pork products to telephone service.

Negotiators fear that if this ninth round doesn't produce a Central American Free Trade Agreement by next week, the opportunity to push a free-trade bill through Congress will be lost, at least until after the presidential election.

Regina Vargo, assistant U.S. trade representative for the Americas and the Bush administration's lead negotiator in the talks, struck an optimistic tone Monday: "I feel good," she said.

Negotiators are hoping to build on some of the progress made during the last round of talks in Houston in October.

"Our accomplishments have been impressive," Vargo said, "but so is the work that remains." The United States is hoping that if it can reach a deal with these five Central American nations, it will be able to persuade the Dominican Republic, which is keen on signing its own trade pact with Washington, to join the new free-trade zone.

A Central American Free Trade Agreement, or CAFTA for short, is not viewed as an end unto itself but as a prelude to a larger Free Trade Agreement of the Americas stretching from Alaska to Argentina.

This year, U.S. trade with Central America could top $25 billion.

"That's not a symbolic exercise," argued Daniel Christman, the U.S. Chamber of Commerce's senior vice president for international affairs.

As a chief gateway to Latin America, Houston could be a major beneficiary of increased trade south of the border. Already, an estimated one-third of all jobs in Harris County are tied to trade.

As in many trade talks, agricultural tariffs are proving to be some of the thorniest issues to resolve, even though negotiators are talking about phasing out subsidies slowly over a 15-year period.

The United States is on the defensive over its own tariffs protecting American sugar growers.

The American Sugar Alliance argues the industry will be devastated if sugar is included in the free trade pact. But candy makers, soft drink companies and other large sugar users complain the trade barriers push up domestic sugar prices to two or even three times international levels.

The sugar issue has caused bitter divisions in the American farm industry.

Pork producers, for example, fear that if U.S. negotiators insist sugar be excluded from the free trade agreement, the Central American countries will want to protect their hog farms.

If that happens, "pork producers will actively oppose this agreement," warned Nick Giordano with the National Pork Producers Association. And without support from the farm states, no trade bill can pass.

The negotiators also must overcome disagreements over textiles, intellectual property rights, financial services and telecommunications.

Administration officials know that even a well-negotiated trade pact will have a tough time on Capitol Hill. Labor leaders and their allies in Congress, for instance, already have been criticizing the worker protections in the Central American countries.

"Common wisdom is that CAFTA will be determined by the margin of one vote," Vargo said.

Lawmakers, however, did hand President Bush a special trade promotion authority, which allows the administration to negotiate trade deals without fear Congress will later try to tinker with the terms. Instead, lawmakers have the authority only to approve or reject a trade deal as a complete package.